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The market for smart-phones is expected to grow so quickly in part because they are changing. Expensive pocket computers such as the iPhone and BlackBerry, which let users watch videos and download whatever applications they want, are giving way to new models that come with popular services built in, but are less versatile or run on open-source operating systems, and are often cheaper. All this reflects a broader trend in the industry, where value is migrating from firms that run networks and make hardware to those that make software and offer service
New handsets from Motorola, an industry veteran, and INQ, a rising star, illustrate these changes. They both feature built-in support for online services, including popular social-networking sites such as Facebook and Twitter. On the iPhone, in contrast, the necessary software has to be downloaded and installed. What is more, both phones can automatically add contacts from such sites to their address books.
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- Technical specifications are not important provided customers can use their favourite online services with ease.
- INQ and Motorola are also both betting on Android, an open-source operating system developed by Google. Although the internet giant’s operating system only has a small piece of the market, it is clearly gaining momentum. According to Google, as many as 20 handsets based on the software will be available by the end of the year.
- Prices are now on a downward spiral, says Ben Wood of CCS Insight, a research firm. Several other handset-makers are already offering cheap smart-phone-like devices. Android allows cut-price Chinese firms such as Huawei and ZTE to enter the smart-phone market, which they had previously stayed out of for lack of the necessary software. Last month T-Mobile, a mobile operator, gave a taste of things to come. Its British subsidiary started selling the Pulse, an Android-powered smart-phone made by Huawei, for only £180. (The cheapest iPhone model sells for £340 in Britain if bought without a contract.)

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One example of an educational company on the cutting edge of this kind of collaboration is eduFire. Founders Jon Bischke and Kareem Mayan want to empower both the educator and the learner by removing geographic boundaries. They feel anyone with knowledge to share has the right to become an “educational entrepreneur,” and anyone who desires to learn should have access to the tutor just right for him or her.
Online textbook startups such as Flat World Knowledge — which lets you customize textbooks online and is about to make a splash on campuses across America — also promise to increase the customizability and affordability of education
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- Chinesepod is a great example of an early mover in this space. Looking at the huge population of China, and that country’s equally huge desire to learn English, founder Ken Carrol quickly realized that classrooms could never scale to meet demand, but that teachers could scale via podcasting (pictured right).
- Numerous other online language learning communities are building out as well — sites such as Livemocha, nciku, and Lang-8.