2010 To See Android Flood And iPhone Price Cuts

Next year will see a flood of Android phones, but eventually the number of smartphones will reduce as phone makers try to differentiate themselves, an analyst has told a conference dedicated to netbooks and smartphones.

“Next year we are going to be swimming in Android products,” said Canalys analyst Peter Cunningham, speaking at the Canalys Mobility Forum, but he pointed out that Symbian would still hold the greatest market share for smartphones for several years at least.

Within the smartphone market, vendors are working hard to create different environments that justify the high price and high margin of their products, said Canalys president Steve Brazier. “The number of phone platforms is growing, but they are absolutely right to differentiate around platforms, as common platforms would kill their margins.” Brazier earlier told eWEEK Europe that new operating systems will keep appearing.

“The smartphone industry should think very carefully before creating a PC-style value chain around Android,” he said. “Any rush to standards would be foolish.”

Not everyone at the conference agreed: “The margins in smartphones are unsustainable,” said Aymar de Lencqesaing, senior corporate vice president at Acer, “When there is a £100 smartphone, people won’t pay £500.”

One vendor whose margins are well overdue for cutting is Apple. “Apple must lower its prices to succeed,” said Brazier, arguing that its success at the high end of the market won’t translate into a big market share of the eventual smartphone market – which will include lower cost devices – unless it produces an iPhone equivalent of the cheaper iPods, such as the Touch or Shuffle. “If Apple doesn’t cut, there is a huge opportunity for others.”