In 2015, half of the world’s “do-everything” mobile phones will be smart. Very smart. Just how they impact our decades-long affair with laptops and related dedicated handheld devices is the question du jour.

Make no mistake. Smartphones, tablets and iPads are causing deep disruptions in the mobile wireless space and beyond, pushing manufacturers, service and content providers to innovate, re-define and re-think traditional handheld device usage strategies and technologies.

“The market for do-everything phones is across the board. It’s hard to NOT get a smartphone in some form. So, almost all mobile phones could be called smart. Now, the technology must be expanded and costs will rise for more glorious devices,” says Bruce Jackson, vice president of technology at Qualcomm.

Expansion is already underway, Jackson adds, with the convergence of smartphones, tablets and an accelerating trend towards the seamless connection of wireless devices, both in and out of the home.

“We can already see where the iPad and video slides across to the tablet,” he says. “We can control the TV with unique levels of communication.”
He sites Skifta, Qualcomm’s cell phone-connected-to-the-home device, as an example. “The handset is always with you. It’s like your phone is a remote control.”

Ross Rubin, executive director of industry analysis for the research and analysis group NPD, breaks the smartphone space into three categories: smartphone, connected electronics (iPads) and emerging products (tablets).

He also sees a more competitive landscape emerging as smartphones literally reach do-everything status. “Smartphones can be augmented by peripherals for functions like keyboards and can be used with the connectivity of smartphones and computers to the notepad. Smartphones also take on the function of Google TV, for example, and over time will become wireless,” he notes.

The result, Jackson concludes, will require some painful decisions by companies scrambling to re-define their roles in the smartphone ecosystem. “We’re not necessarily seeing major shifts in the competitive environment, but there’s lots of pain for companies like Garmin and Kodak who are getting squeezed by smartphones.”

Squeezing more processing power into smartphones is another key driver in their evolution and the impact they’re likely to have on dedicated handheld devices.

Adds Rubin: “There’s been incredible advancement in processing power, like Qualcomm’s Snapdragon, that is creating advantages for smartphones over dedicated handhelds. And smartphones are capable of connecting Wi-Fi and other standards. There will be some difficult decisions for companies in certain categories.”

One of those categories is navigation, where franchise players such as TomTom are feeling the heat. “Yes, there’s pressure, so our impetus is to expand our horizons and clearly set the bar in the navigation ecosystem,” says Tom Murray, senior vice president of market development for TomTom. “We’re entering a market segment where we’ll offer navigation applications on iPhones and smartphones and through our licensing division sell mapping content and services. The demand for navigation is growing and our business will evolve into smartphones and tablets.”

Good idea. Particularly since smartphones represent a fertile U.S. market, reports the research firm In-Stat. “In the U.S., 60 percent of phones are considered not smartphones. Many ‘feature phones’ can offer applications like smartphones. The change is in the software, cloud computing and smartphone features like communications and social networking,” says Allen Nogee, principal analyst for In-Stat.

Another change, he notes, will be with cumbersome data plans and the need for more flexible business models. “The U.S. problem is that operators are forcing data plans on customers who just can’t pay for them. So the operators are trying to get these people into more affordable smartphones,” Nogee says.

Those smartphones may end up being defined as the more traditional dedicated handhelds, which Jackson believes will be around for a while. “There will always be a niche for digital SLR cameras, dedicated music players, handheld navigation devices and other dedicated handhelds,” he says. “So, smartphones are not the death knell for handhelds.”