To counter recent blog reports predicting that its Xperia 1 smartphone would miss that year’s holiday shopping season, Sony Ericsson told media outlets that week that its first-ever Windows Mobile device will be released in the fourth quarter of 2008.

The new multimedia handset, which will feature a three-inch color display, slide-out Qwerty keyboard, Wi-Fi radio and GPS-based navigation, will be available for use on selected high-speed (HSDPA/HSUPA) cellular networks worldwide before the end of that year, the company said.

Sony Ericsson is clearly hoping to benefit from a sales surge that has already been under way for more than two years. “Smartphones are still seeing growth rates hovering around 40 percent year-over-year, while the rest of the industry is growing at roughly 10 percent,” explained Ryan Reith, IDC senior research analyst.

Escalating Competition

However, converged mobile devices such as the Xperia 1 will face an increasingly competitive playing field moving forward, noted Ramon Llamas,

another IDC senior research analyst. “Smartphones have typically been the category of handsets incorporating higher-end features such as GPS and touch screen, but these features are quickly moving onto handsets further down the food chain,” Llamas explained.

These design changes are escalating competition within devices in a new way. “Reception towards these devices has been warm, and as we head into the holiday quarter, demand for these and other devices will no doubt increase,” Llamas said.

The rise of the feature phone is forcing a battle at the high end of the market, with the main difference amidst smartphones and feature phones being the high-level operating system, Reith noted. “The upshot is that handset manufacturers launching new smartphone products will likely face a wider range of competing products going forward,” he said.

Falling Further Behind

Gartner Research Director Carolina Milanesi notes that Sony Ericsson’s global market share in that year’s…

Original post by dhiram