CTIA conference this week, it's hard to remember a time when a smart phone, the offspring of the personal digital assistant, or PDA, was the tech sector's stodgy librarian. It organized, it performed basic essential functions and it was unwaveringly focused on business at hand. Its creators -- Palm ( PALM), Research in Motion ( RIMM) and Nokia ( NOK) -- wooed early adopters and businessmen, who gave those companies two-thirds of the global market share, according to Gartner. Their original phones were smart but, deep down, they aspired to play with the cool kids. "The smart phone wasn't synonymous with business use because that was its original intention, but because that's the kind of user who had been using those devices prior to the arrival of the Apple ( AAPL) iPhone," says Ian Fogg, mobile analyst for Forrester Research ( FORR). "If you think back to the PDA market of the mid-1990s, they had similar functions and had, weirdly, MP3 players and games." After Apple came along with its Internet-savvy iPhone, touchscreen and apps three years ago, it's been URLs gone wild ever since. The iPhone comprises 14% of the global market, almost double the 8.2% stake in 2008. In the U.S., ComScore says, the iPhone accounts for one of every four phones sold and spawned competitors like the HTC Hero, Motorola ( MOT) Droid, Palm Pre and Google ( GOOG) NexusOne. Forrester's Fogg equates the iPhone to the first ironclad battleship blowing wooden foes to matchsticks. "When the U.S.S. Monitor was built in the mid-19th century, everything that had come before was obsolete overnight," Fogg says. "I would argue that the iPhone was that transformational." As a result, Gartner predicts that global sales of touchscreen mobile devices will double this year, or about 360 million units. With Apple's Apps Store selling more than 100,000 applications, and Samsung, Google, Palm and other manufacturers offering thousands more, Gartner further predicts consumers will spend $6.7 billion on 4.5 billion apps in 2010 after laying out $4.2 billion on 2.5 billion downloads last year.
Those applications may make the phone smarter, but a quick look at the logos for apps featured in the devices' promos and packaging suggest smart phones are mated to slacker owners. Facebook and Twitter apps, which Nielsen telecom chief Roger Entner calls "table legs" of mobile companies' software offerings, are used by 6 million mobile-phone owners in the U.S., ComScore says. The same study found that 31% of smart-phone users access those sites regularly by using their phones. Mobile access to Facebook doubled last year, and quadrupled at Twitter, leaving plenty of room on friend-and-follower lists for new additions on smaller devices like Nokia's Surge, BlackBerry's Pearl and Palm's Pixi. "What you're seeing is a trend to find middle ground between a basic feature phone and a full-fledged smart phone," Entner says. "There are quite a number of people who centered around social networking, texting -- you name it -- who don't want or can't afford a full smart phone but don't want a basic feature phone." As manufacturers scramble to make "smart" features more accessible to the masses, the smart-phone market remains divided into cliques. Devices with a pre-iPhone design still undersell their more fun features while pushing connectivity and productivity: Words that bosses love, but don't appear in status updates too often. The iPhone and its touchscreen competition, meanwhile, hide growing memory and battery life beneath bass-fishing apps and beats. The newbies may seem vapid, but they're no dummies. "Your average smart phone these days is now about as powerful as a computer that ran Windows 95," Entner says. "They brought people to the moon and back on a lot less." --Reported by Jason Notte in Boston.