AT&T Inc. and Verizon Wireless might be exploring netbooks lately, but the next wrinkle in the device wars will be a new category of connected device — call it the smartbook, or the netphone. Regardless of nomenclature, the coming smart-net-phone-book will embed broadband — 4G and HSPA, most likely — and be sold with open source operating systems and a consumer electronics retail model – a defining moment for carrier-handset relations.
Handset exclusivity for high-end smartphones has been a successful model for the carriers involved — AT&T has reaped a raft of new subscriptions, higher data ARPU and less churn thanks to the iPhone, and Sprint-Nextel Corp. has essentially bet the farm that the Palm Pre will stem the hemorrhaging in its customer base. And in turn, device-makers have gotten the benefit of carrier subsidies, which enable the devices to be better priced for mass-market uptake. But as the world moves from operating system fragmentation to more open source initiatives, this could demand a new business model where exclusivity becomes irrelevant.
The Open Source Factor
One bellwether for moving beyond exclusivity is the recent agreement between Nokia, the No. 1 phone-maker, and PC processor giant Intel Corp.. The two have agreed to work together to create a breed of new connected devices that analysts like Caroline Gabriel at Rethink Research have pegged for arrival in the 2011 or 2012 timeframe. The companies themselves are saying they will "define a new mobile platform beyond today's smartphones, notebooks and netbooks."
And that platform, significantly, will be based on open source. The two will work to make their Linux-based operating systems, Intel’s Moblin and Nokia’s Maemo, more compatible, with “common technologies for use in the Moblin and Maemo platform projects.”
“This is good for Nokia as its platform will become more suited for the growing segment of mobile Internet devices and netbooks; good for Intel as its platform will become more suited for smaller mobile devices, and good news for developers as it will, to an extent, reduce fragmentation in Linux-based devices,” said Adam Leach, device principal analyst at advisory and consulting firm Ovum Ltd. “However, the real opportunity here is for Nokia and Intel to combine their efforts and back a single Linux-based platform for mobile devices. This could provide device vendors with a credible open alternative to existing smartphone and netbook platforms.”
