The magic touch
Updated: 07/01/08 6:59 AM
With Apple Inc. (AAPL) releasing an updated iPhone in July and Sprint Nextel Corp. (S) selling Samsung’s similarly styled Instinct, touch-screen smart phones are making ones with full keypads seem almost old-fashioned.
But just as the QWERTY keypad –so named for the order of the first few letter keys – did not signal the demise of the numeric keypad, analysts think QWERTY keypads and touch screens will coexist for years. If industry growth continues, this could benefit smart phone veterans Research In Motion Ltd. (RIMM) and Palm Inc. (PALM) and handset makers like Nokia Corp. (NOK) and Motorola Inc. (MOT). RIM, for example, added 2.3 million subscribers in its fiscal first quarter, 6 percent more than the prior quarter.
While touch screens are good for consuming content, keyboards tend to be better for writing e-mails, analysts say. “If you’re sending tons of text messages and e-mails ... you’re probably going to migrate to a QWERTY keyboard handset,” says Piper Jaffray analyst Mike Walkley.
In the end, though, keypads and touch screens may not determine a smart phone maker’s success. Deutsche Bank analyst Jonathan Goldberg says the operating system behind the device is more important, noting investors should look to RIM, Apple Inc. and Nokia Corp.
