The smartphone is rapidly accelerating the convergence of computing and telephony and taking the phone as a converged music player, gaming device, camera, GPS navigator, web browser and wallet to another level.

It is also beginning to disrupt some cosy legacy marketing value chains, for example, in the traditional retail space savvy smartphone owners are increasingly engaging in in-store price comparison behaviour.

Operating systems from Microsoft, RIM (Blackberry), Apple, Nokia (Symbian), Palm and now Android (driven by Google) combined with some pretty sexy hardware from a range of vendors are radically changing the way that people work, play, consume and create information.

Being within arm’s reach of most of the information you need and desire 24/7 creates a level of stickiness which is almost addictive and probably also makes us pretty lazy.

For example, a well-known ‘ad man’ told me recently over lunch that he almost never uses Facebook on his PC anymore because the Facebook application for his Blackberry is so great and never more than a few seconds away. In addition, he gets to create and upload content in a seamless way using only one small device.

Talk about personal media.

It is, however, the recent emergence of the Apple iPhone, which has truly transformed the way we think about the mobile ‘phone’ and has forced competitors in the hardware, software and mobile operator space to raise their game. It has also forced a wave of innovation (and reverse engineering!) which has made a lot of very powerful products available at increasingly affordable prices.

Add to this the Apple application store which, on 23 April 2009, saw its billionth application download – ranging from utilities like weather, navigators and song identifiers to games and information resources – there are over 35 000 applications available in the App Store.

The success of the Apple application store has driven a range of competitors like Blackberry, Nokia and Google to follow suit and the recently announced Vodafone application store clearly signals the determination of mobile operators not to be marginalised by the Internet and handset brands.

Although the browsing of the regular Web is a far better experience on most high-end smartphones than on a regular cellphone, the application stores with their massive diversity are causing the creation of an ‘application-based Internet’ for mobile, which implies a very user-friendly mobile Internet experience as well as more often than not an aesthetically pleasing ‘rich media’ experience – all of which is driving dramatically increased mobile Internet session frequency, session time and page impressions.

It is interesting to see how once advertisers have been seduced by the marketing possibilities in smartphones, they soon become converts to the broader mobile media opportunity and start to seek much larger reach than currently offered by the smartphone population, even at the expense of dazzling creative executions.

Brands have opportunities to engage the typically high-end smartphone audience in a variety of ways some of which are classic display advertising, brand sponsorship of applications and utilities and, most interestingly, brand applications, where brands are able to create their own applications allowing customers to engage with the brand in a meaningful way.

A radical and successful example of a brand application is an iPhone application from Kraft where rather than merely ‘sponsoring’ an application Kraft has had the temerity to develop and brand an ‘iFood Assistant’ application featuring recipes and tips, and place it in the App Store charged out at a price of US$0.99! This application is among the top 100 App Store applications by download.

It is worth mentioning a few other interesting (and this time free) recent brand applications: Audi A4 Driving Challenge (370 000 downloads in first two weeks!) and Zippo Virtual Lighter application – yes, now non-smokers no longer need to feel left out when the lights go out at rock concerts (number one free application in the lifestyle category).

Current smartphone offerings clearly show the future of mobile advertising but it will be some years before smartphones have a sufficiently deep penetration in developing markets to allow for mobile campaigns with the kind of reach required by most mass market brands.

Meanwhile, I would recommend that brands look for opportunities to include the capabilities offered by smartphones within their mobile strategy – particularly brands serving primarily affluent market segments – but not at the expense of the more ubiquitous mobile media which today provides meaningful and large-scale mobile engagement opportunities with the mass consumer population.

Note: the above piece was written for Marketing Mix magazine and is published in the June 2009 edition