Yankee Group News Release

Forty-One Percent of Consumers Will Make Smart Phones Their Next Mobile Device

OEM-Operator Power Dynamics Tested Further with Release of the Palm® Pre™ phone

Boston, MA, June 10, 2009 — Yankee Group research reveals that trends within the smartphone ecosystem are profoundly impacting the power dynamics between original equipment manufacturers (OEMs) and operators.

The new Yankee Group report "Latest Palm Device "Pre" –views Future OEM-Operator Relationships" shows the smartphone category is emerging as the most important competitive battleground in wireless today:

  • Forty-one percent of consumers are likely to choose an advanced OS phone as their next mobile phone purchase.
  • Smartphone volumes will grow to 38 percent of all handsets by 2013, representing the largest growth opportunity within mobile devices.
  • The average U.S. consumer has had 4 mobile devices, increasing his or her appetite for enhanced features and more sophisticated designs when he or she purchases a fifth device.

Traditionally, operators have had the upper hand when working with device manufacturers to bring a new device to market, but the power dynamics are shifting. With more competitive entrants, tighter budgets and increased consumer expectations, OEMs and operators need to work together, on equal ground, to thrive.

"The release of the Palm Pre spotlights the changes in the OEM-operator dynamic," says Chris Collins, Yankee Group senior analyst. "Sprint and Palm, Inc. are two companies desperate for a blockbuster hit. And as such, they are either the perfect—or worst possible—partners for one another. The fate of both companies relies on the success of their alliance around the Pre."

Yankee Group (www.yankeegroup.com)
The people of Yankee Group are the global connectivity experts-the leading source of insight and counsel trusted by builders, operators and users of connectivity solutions for nearly 40 years. We are uniquely focused on the evolution of Anywhere connectivity, and chart the pace of technology change and its effect on networks, consumers and enterprises. Headquartered in Boston, Yankee Group has a global presence, including operations in North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific. Visit www.yankeegroup.com.