In the last few years, phones have typically been categorized as either “smartphones” or “feature phones.” Smartphones are really just better phones. Conversely, the feature phone label is a particularly unfortunate euphemism for “crappy.”

Thankfully, soon the category known as “feature phone” will begin to fade away. This is because most of the basic system features in a phone are the same. Most all phones are expected to have an address book, messaging, a camera, media playback, etc. The difference between phones is primarily the quality of the software that drives the features and ties them together. The difference is between smart and dumb.

Smartphones for everyone!

And yet, feature phones have dominated. Why? No one walks into an AT&T store and says, can I have one of those “dumb phones.” However, the market *is* price sensitive and so, since smartphones sell at a shrinking, but still consequential premium, adoption has been more limited. However, within the next year or two, after one more turn of Moore’s Law, there will be no need to sell phones that don’t have basic smartphone usability. Within this timeframe, even the most basic hardware will support a real operating system.

In short, real soon now, all phones will be “smart,” because anything else will be, well… stupid.

A battle is coming

As the market shifts, and software becomes the primary differentiator, this will trigger radical shifts in the marketplace.

For example, can Symbian compete, from a quality-of-experience or developer platform perspective, with a Google Android based system, let alone Apple OS X? I don’t think so. Over time I don’t even think their user experience can best the much maligned Window’s Mobile, given Microsoft’s Terminator-like indefatigability. And what about RIM? Will they be able to play effectively against the entering titans?

The next 18 months will be a phone OS battle royal. And how the market shakes out in this software battle will really determine who the handset winners and losers are.

Look out Nokia

And so, despite Nokia’s newly attained 40% market share, their total dependence on Symbian suggests that trouble is likely ahead. Weak software has been a significant part of Motorola’s downfall as industrial design ceased to justify a pricing premium. And though Nokia has better software than Motorola, it is still weak. Today Nokia announced it is acquiring Trolltech, a Linux mobile OS platform vendor. This is a tepid, but at least credible response to the obvious problem with their Symbian dependence. However, much more is needed for them to truly be responsive to the tectonic shifts in the market.

In short, no one’s position is safe. Everything is up for grabs. Because I don’t care how many phones you sold last year. As Motorola will surely tell you, suck is suck.