Asus Attacks the iPhone With Its Own Smartphone

The iPhone might be top of the heap in the smartphone market right now, but netbook maker Asustek plans to take a swipe at the device’s hegemony in the second half of the year with a touchscreen smartphone that doubles as a location-based personal navigation device.

To create the “nuviphone” line, Asus is partnering with GPS device maker Garmin for the core location functionality. The first fruit of the marriage will be a nuviphone preloaded with location-y goodness, like maps, directions, points of interest and integration with directory information.

It’ll also come preloaded with the “Ciao!” social networking application, which can aggregate other location-based applications for friend-tracking and so on into a single portal on the device.

Can Asus and Garmin knock the iPhone off of its perch? Working against them is the fact that the iPhone is supported by the App Store, which offers thousands and thousands of third-party applications.

But in their favor is the fact that Asus is already challenging the iPhone — and the entire smartphone category, for that matter — with netbooks: those small, Web services-oriented mini-laptops that are getting a lot of attention lately. And it appears the nuviphone is building on that expertise, being somewhat of a hybrid between its existing netbook business and handsets.

“This is going to become a question for mobile Internet device vendors and consumers alike,” says Philip Solis, principal analyst at ABI Research. “There will be little difference between a smartphone such as the Palm Pre which uses an OMAP 3 processor and a MID with cellular voice, except for screen size. Understanding what consumers want from stand-alone MIDs without cellular voice will be important.”

ABI Research believes that some people will value a separate device with a bigger screen for the Web browsing, that they can choose when to carry. The more interesting promise offered by MIDs without cellular voice will be their repackaging in the form of specialized Internet-connected CE devices such as media players or personal navigation devices, Solis said.

ABI recently found in a survey that nearly half of respondents view netbooks and MIDs as phone replacements, while only 34 percent said they would continue to use a cellular handset.

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