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10/13/2009 Report: Let the VoIP Wars Begin

Market research firm In-Stat says the coming smartphone battle royal will be heavily influenced by VoIP and have major consequences for the wireless industry.

The market research firm believes that four major announcements on Oct. 6 from AT&T, Verizon Wireless, Palm and Microsoft signaled the beginning of a major fight for market share.

"With Android on the upswing, Palm's Web OS starting to expand, and Apple's iPhone not showing signs of slowing down, the battleground, and subsequent weeding-out phase of the smartphone OS war, has started," wrote In-Stat analyst Allen Nogee in a press release.

At the CTIA conference last week, AT&T announced that it would now allow VoIP applications that run over its cellular network to be installed on iPhones. 

In-Stat concludes that AT&T's move was in anticipation of net-neutrality rules coming from the FCC. According to the report, the AT&T announcement will have long-term implications for the current U.S. cell phone billing model, indicating that as voice prices dwindle, data prices may rise.

Verizon said it was adopting phones with Android that allow the Google Voice application on its phones. In-Stat believes Verizon has given up on the prospect of selling the iPhone anytime soon, and it's likely that AT&T and Apple will extend their exclusive iPhone agreement at least another year. In-Stat concludes that Verizon needs to "get its ducks in a row not next year but now."

Additionally, Microsoft announced that Windows Mobile 6.5 was finally ready.  Microsoft has been slowly bleeding market share over the years. In-Stat believes WinMo 6.5, which has received tepid reviews, is Microsoft's best hope of slowing the defectors.

However, many believe it's already too late. While users may wait for Microsoft for a PC OS update, In-Stat believes that is not the case in mobile. Even for a giant like Microsoft, it will be difficult to rebound as the smartphone OS market heats up, the research firm says.

Finally, Palm said it was opening up its WebOS to its developer program, with developers getting a 70 percent cut of profits similar to the Apple model. In contrast to Apple or Google, Palm promises minimal oversight or rejection of legitimate applications, which could include a Google Voice or Skype application. Palm will provide the developer with a link in return for submissions so that users can install the application on their phone. 

Undoubtedly, Android's recent coming of age has led to increased competition in the smartphone market. And while carriers and OEMs rush to integrate some form of VoIP on their handsets, it appears that pricing will increasingly center around data, leaving the most versatile, data-driving operating systems to the spoils.

 
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