Mobile: with devices sales falling, operators and manufacturers turn to apps and services

[computerworld] Mobile-phone sales continue to be hurt by the faltering economy, so vendors are increasingly looking to software and services to lure buyers of new devices.

The challenges continue for Motorola and Sony Ericsson. Motorola, which announced its result on Thursday, sold 14.7 million phones, compared to 19.2 million phones during the fourth quarter last year.

The drop was expected and there may now be some light at the end of the tunnel for Motorola. The company has probably hit the bottom of its mobile-phone sales curve and won't go much lower, according to Shaun Collins, analyst at CCS Insight. Whether the company's upward slope is steep enough to carry it through remains to be seen, he said.

But Apple isn't the only company focusing on software. Operators and competing phone vendors are focusing more on software and services in what has become one of the big trends this year, witnessed by the introduction of a number of application stores, and we'll see more and more of that, according to Milanesi.

For instance, in some countries, Nokia is selling the 5800 XpressMusic phone using its Comes With Music service and not focusing on the fact that it's the company's first touch device. It is also gearing up to launch its OVI store, and earlier this week it said it will work closer with third-party developers.

But the move to a more software- and services-oriented mobile-phone market can prove to be a challenge for Samsung and LG, because they're pure hardware companies, according to Milanesi. At the moment, they're lucky because the shift from hardware to services and software has so far only affected the high end of the market. "It might not become an immediate problem, but it's something they have to think about," said Milanesi.

Mobile-phone vendors focus on software as sales drop