Phone Systems: Smaller Smartphones: A Market Ready to Explode

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Lot is still missing from an iPhone-sized device

But a lot is still missing from an iPhone-sized device, as big as they all are. And the market might be primed for an explosion in compact smartphones. (Palm (HPQ) owners: can I get an amen?)

The answer, of course, is that the fuss isn't about the Siri app. It's about the artificial-intelligence insights behind it: the chain of machine-learning, natural-language processing, and Web search algorithms that swing into action with every Siri query. When you can access these algorithms from a mobile device like the iPhone, and prime them with a bit of contextual awareness such as a GPS location reading or an understanding of the user's preferences, you have a powerful personal tool that Norman Winarsky, SRI's vice president of ventures, licensing, and strategic programs, likes to describe as a “do engine” rather than a search engine.

The number of screen-taps it takes to get things done

Voice power may reduce the number of screen-taps it takes to get things done, but it also raises another issue: the relative importance of voice calls. With data caps, the long-awaited dream of data-network VOIP is virtually dead in the water — meaning we’ll still be using our phones by burning up minutes, as we always have. This also puts a damper on the explosion of video calls, despite the fact that more and more phones (including iPhone 4) sport front-facing cameras.

Of course, the promise of ubiquitous video calling would have made the big, clumsy smartphone form-factor a reasonable compromise; if you’re “watching” calls as often as you’re listening to them, it makes sense to have a bigger screen and a bigger phone. But if data caps force users to stick to WiFi for video calls, then most people will stick to voice. And when it’s held to your ear, a smaller, candybar phone feels much better than the heavy glass expanse of a smartphone.

Using WiFi to consume content isn’t ideal on a smartphone; it’s much better on a tablet. And since Starbucks is a destination (at least in most of this car-reliant country) that means that users can plan ahead and bring their tablet instead of relying on their phones to spontaneously pull in WiFi-delivered music and film. If tablets popularize as quickly as Apple’s sales figures suggest, hot-spot browsing will be only one example of the way that tablets may change the duties of the smartphone. If bigger-screen content is shunted to an iPad or Android tablet, that means there’s less of a need for screen real estate on the phone.

For some, a smaller smartphone will feel like a retreat. And yes, a slighter smartphone might be less of a multi-tool than today’s iPhones and Android beasts. But sometimes going backwards in terms of features is the best way forward: witness the netbook phenomenon.

The winner in all this might oddly be Nokia (NOK)

The winner in all this might oddly be Nokia (NOK), which has pretty much missed the entire super-smartphone revolution ignited in 2007 when Apple released the first iPhone. The Finnish phone maker has been muddling along with its dumpy smartphone offerings ever since, and has no army of app developers to compare to Apple and Android.

Chris Dannen is a freelance writer specializing in tech and innovation. His work has appeared in print and online at FastCompany, Discover, Inc, and RollingStone. He's also written two books about iPhone app design and Google Voice. He lives in Brooklyn, NY.

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