Brands square up in smartphone wars

Media coverage of Monday's iPhone 3G launch focused on the device's faster download speeds, its new £99 affordability, and its incorporation of GPS location recognition. It missed the big story.

Apple's revamped iPhone finally ends the Blackberry's effective monopoly in the business sector. The new iPhone will feature Blackberry-style 'push' email and be fully compatible with Microsoft's ubiquitous Exchange system. In a stroke, Apple CEO Steve Jobs has robbed the Blackberry of its unique selling point, and set up shop in Blackberry manufacturer RIM's own backyard.

The device he introduced, in 2007, as "the best iPod ever' is now a powerful and business-capable smartphone, providing secure email communication and compatibility with Microsoft Office documents.

The prize is potentially a big one. In under a year, Apple has won 19 per cent

of the American smartphone market, establishing itself as the second biggest player. But the RIM Blackberry continues to squat over the sector with a 45 per cent market share and first-mover advantage.

Meanwhile, RIM appears to be preparing to take the fight right back to Apple. With analysts predicting annual sector growth of 50 per cent, RIM is reluctant to allow Apple free rein with the consumer end of the smartphone action. Its new Blackberry Bold ­ due this summer ­ promises compatibility with Apple's iTunes music service, a clear strike into Apple territory. And even as the all-new iPhone came blinking into the light, rumours were surfacing of a touch-screen, iPhone lookalike Blackberry, codenamed 'Thunder', and scheduled for launch in the autumn.

The iPhone's new price-point will possibly make competition tougher than RIM expected but, with the stakes so high, the company can't afford to back off. Consumers can expect plenty of choice, and perhaps a bargain or two, during the smartphone wars of late 2008.