Despite a lagging economy that continues to drag down the market, 2010 promises to be an exciting year in mobile, analysts say.
"2010 will be a year of conflict," said David Eller, an analyst with TownHall Investment Research.
Eller and others made a range of predictions for 2010 about subjects including the iPhone's dominance and Palm's likelihood to survive. They don't always agree on what the coming year will bring.
While Eller expects to see the bulk of smartphone sales going to the top four handset manufacturers, making it increasingly challenging for new entrants, others think it's still an open game.
Eller noted that in 2007, the top four smartphone makers sold about 65 percent of the phones, according to Gartner. By next year, TownHall expects the top four will account for nearly 90 percent of smartphone sales, leaving only 10 percent for other manufacturers and new entrants. The top four will be Nokia, Research In Motion, Apple and HTC, TownHall predicts.
But another expert said that recent history shows that new companies have a chance at succeeding in mobile. "One thing we've seen is how quickly things change," said Michael Gartenberg, an analyst with Interpret. "Three years ago if you were talking about companies to watch in mobile, you wouldn't have discussed Apple or Google. Three years later, they're probably two of the most important companies to keep an eye on in 2010."
While Palm has been around for many years, its recent struggles make its position in the top line up of mobile phone makers uncertain. "I think Palm is gone," said Caroline Gabriel, an analyst with Rethink Research. "Palm is living on borrowed time. I see no reason for them to survive long term."
But there's still hope for Palm from some corners. "They're executing in very narrow straits, but they're hitting the mark and staying relevant and capturing, if not significant market share, tremendous mindshare," said Gartenberg.
"Palm's going to have a really good year," predicts Jonathan Goldberg, an analyst at Deutsche Bank who covers Palm.
Android versus Windows Mobile
Google Android and Windows Mobile are wild cards for 2010, with few analysts willing to predict much about either operating system. While Android has good momentum with many new phones hitting the market, onlookers worry about Google's long-term commitment to the platform and about how fragmentation may affect the platform's potential for growth.
Despite its rapid loss of market share, Windows Mobile is a dark horse that could surprise the market with an updated operating system, Gartenberg said. Goldberg agreed: "Don't count them out yet."
Even if new and fledgling competitors have a chance at success in mobile, none has a chance at unseating the iPhone, at least not next year, many of the analysts agreed. "Is somebody going to generate a phone that is so cool that a satisfied Apple user is going to switch? The answer is no," said Tom Huseby, a managing partner at SeaPoint Ventures.
Goldberg agreed that no other phone will threaten the iPhone next year and possibly beyond. Apple managed to corner the market for portable music players with the iPod and for many years has maintained its dominance. It could do the same in mobile phones, he said.
While he doesn't think that the iPhone is necessarily the best phone out there, the apps are what sets it apart and that will continue to be true next year, he said. "People use the iPhone differently than they use other devices. It's hard to challenge them because of that. It's not a great phone but I keep it because I have nine pages of apps on it," Goldberg said.