Will Demand for Smart Phones Boom or Bust?

Cell phones can be loosely categorized as basic phones, “feature” phones, and “smart” phones (with Microsoft using the label “Smartphone” for one of its two entries in the last category, the other being the Pocket PC Phone Edition).

Basic phones may have a few built-in utility programs, such as an address book, but these phones are not designed to synchronize with a PC and cannot access wireless data services. They are inexpensive (often bundled for free with cellular plans) and meet the voice-centric needs of a large percentage of users.

Feature phones support text messaging and wireless data services, have microbrowsers for viewing Web pages, synchronize data with a PC, run more sophisticated programs, may be able to run simple add-on software (such as Java applet-based games), and often have built-in digital cameras.

Smart phones have all of these same features but also use an OS that can run a broad range of third-party programs. Because of their greater processor power, larger memory, and higher resolution displays, smart phones are significantly more expensive than feature phones.