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Smartphones have conquered PCs

chart_smartphone_pc.top.gif By David Goldman, staff writer

NEW YORK (CNNMoney) -- A long-anticipated milestone was hit late last year: Smartphone shipments overtook PCs.

Manufacturers shipped 100.9 million smartphones to stores around the globe in the final three months of 2010, compared to 92.1 million personal computers, according to a study released this week by IDC.

Over the past two years, smartphone shipments have tripled, while PC shipments grew a comparatively measly 45%.

Of course, comparing smartphones to PCs isn't exactly fair. Americans, which make up the largest chunk of the smartphone market, tend to buy new devices every two years after their wireless contracts expire. PCs not only last longer, they are also more expensive.

There's also the issue of saturation: Though there's room for growth in much of the world, 80% of Americans own a PC, compared to just 17% who own smartphones, according to Forrester Research.

But the trend is also indicative of a sea change in the kinds of devices people are using for their everyday computing needs.

Smartphones now come with multi-core microchips and are getting closer to matching the processor speeds of some PCs. But they also do a whole lot more: Smartphones have cameras, 3G connectivity, the ability to download apps and Web content from anywhere, and access to location-based services through GPS.

The devices have just one user, so they are intimately personalized. And since they follow their users around all day, they can handle tasks like monitoring your health or starting the engine of your car.

Smartphones have become cheaper, more functional and offer more bang for the buck than PCs. That's helped the developing world become the fastest-growing smartphone market. Amazingly, there are 48 million people in the world who have mobile phones, even though they do not have electricity at home, according to Cisco (CSCO, Fortune 500).

The trend is taking hold at home too: Smartphone penetration in the United States is expected to match that of PCs by 2015, Frost & Sullivan forecasts. By 2013, more people in the world will access the Internet on a mobile device than on a PC, research firm Gartner expects.

Some doubt that PCs will ever completely disappear (who wants to do productive tasks like word processing on a mobile phone?). Others argue that PCs aren't going away, they're just taking on a new form: Some consider the 18 million tablet sales in 2010 to be PC sales, since the devices are more PC-like than smartphones. Of course, others maintain that tablets are just smartphones with a bigger screen.

Regardless, envisioning a world without traditional PCs seems less far-fetched every time a new innovation in the smartphone space unveils a previously unheard-of use for the mobile devices.

For instance, Motorola's (MMI) new Atrix 4G smartphone, which will be sold on AT&T's (T, Fortune 500) network in early March, has the ability to become a quasi-PC. The smartphone can be purchased alongside a separate screen and keyboard, which are powered by the phone. When the phone is inserted into the dock, the screen and keyboard come to life, and possess the computing capabilities of a low-end netbook.

Imagine what smartphones will be able to do just a few years. Perhaps we'll all be plugging them into docks at work, using them for business applications and productivity, taking them with us on the road, and plugging them back into our home docks. To top of page

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