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Feature phone is a term typically used as a retronym to describe mobile phones which are limited in capabilities in contrast to a modern smartphone. Feature phones typically provide voice calling and text messaging functionality, in addition to basic multimedia and Internet capabilities, and other services offered by the user's wireless service provider. A feature phone has additional functions over and above a basic mobile phone which is only capable of voice calling and text messaging. Feature phones and basic mobile phones tend to use a proprietary, custom-designed software and user interface. By contrast, smartphones generally use a mobile operating system that often shares common traits across devices.
Feature phones were the top-selling devices in a wireless carrier's lineup from 2000 to 2010 due to their assortment of features for retail customers, when smartphones were meant primarily for enterprise users. However, in 2006-07, the advent of the iPhone and Android ushered in the consumer-focused smartphone with major encouragement for app development, plus the iPhone and Android devices were considerably more powerful than existing feature phones and smartphones on the market. Since mid-2012, in reference to the literal opposite of the term "smartphone" the term dumbphone has been increasingly used in order to refer to any mobile phone other than smartphone and applies today to most of feature phones that do not offer touch screen, wireless internet and/or mobile OS support. Nowadays, feature phones are primarily specific to niche markets or have become merely a preference; for instance, in the United States some people favor feature phones over smartphones for the reason of simplicity.
The first cellular phone, the Motorola DynaTAC released in 1984, is considered a basic mobile phone due to its inability to do anything more than making voice calls.
Despite the introduction of smartphones in the mid-1990s, ignited with the August 1994 release of the IBM Simon and made popular by the release of the BlackBerry line of handheld personal digital assistants from Research in Motion, feature phones enjoyed unchallenged popularity into the early 2000s. The best-selling feature phones includes those by Nokia, the Motorola Razr, multimedia Sony Ericsson W580i, and the LG Black Label Series that targeted retail customers, while smartphones such as Palm and BlackBerry were still considered a niche category for enterprise use. Feature phones were typically mid-range devices, between basic phones on the low end (few or no features beyond basic dialing and messaging) and enterprise-oriented smart phones on the high end. Prior to the popularity of smart phones, the term feature phone was often used on high-end phones with assorted features for retail customers, developed around the advent of with 3G networks, which allowed sufficient bandwidth for these features. 
In Japan, mobile phones developed a wide array of features prior to the development of smart phones. The introduction of smart phones has largely displaced these at the high end, though smart phones for the Japanese market often include features first developed on feature phones. Many of these features were and remain specific to Japan, often requiring network support, and the resulting phones, while dominant in Japan, proved unsuccessful abroad. This led to the term "Galápagos syndrome" - specialized development dominant on an island, but not found abroad - and then the term is Gala-phone (???? gara-kei?), blending with "mobile phone" (?? keitai?), to refer to Japanese feature phones, by contrast with newer smart phones.
The tide began to turn in January 2007, when Apple Inc., a company then known for its production of the iPod media player and the iMac personal computer, introduced the iPhone, featuring an all-touch user interface closely based on that of the iPod Touch. The first iPhone had a much more powerful hardware and operating system than contemporary feature phones and smartphones (the hardware/software was derived from the Macintosh personal computer, in contrast to the existing phones which had slow processors and limited applications/firmware to conserve battery life) and also being much more bandwidth-intensive which would strain existing wireless networks. Featuring access to millions of mobile apps from Apple's iTunes Store (now the App Store), it was considered to be among the first retail/consumer-oriented smartphones. At the event, Steve Jobs proclaimed that "the phone was not just a communication tool but a way of life". The iPhone immediately became a smash hit among consumers, selling over 6 million units, and since then Apple has released newer, updated models on an annual basis.
At around the same time, Google was developing its Android operating system as a direct competitor to Nokia's Symbian and Microsoft's Windows Mobile operating systems. The iPhone's success lead to the company, lead by Larry Page, turning its methodology around, and Android as an open-source software platform for mobile phones was announced in November 2007 together with the founding of the Open Handset Alliance, and the first Android smartphone, the HTC Dream, was released in October 2008 in the US. Google would go on to launch its Nexus line of smart devices and collaborate with various original equipment manufacturers, including popular feature phone manufacturers Samsung, LG, Sony, and Motorola, to adapt Android for devices of varying form factors and computing platforms. Nokia and Blackberry's attempts to implement some of the iPhone's new capabilities to their existing proprietary firmware platforms was mixed, as these earlier operating systems were designed in mind to handle these intensive applications.
By the turn of the decade, iOS and Android, together with less-common platforms such as BlackBerry 10 and Windows Phone, had shifted the smartphone focus from being a niche to mass market consumers. Feature phones were primarily designed as communication devices, and manufacturers had, up to that point, been enjoying record sales of cell phones based more on fashion and brand, rather than technological innovation. Though smartphones cost more to produce, they were delivering higher profit margins than feature phones, leading to manufacturers and wireless carriers shifting towards smartphones. As a result, smartphones now have the largest selection and advertising among carriers, which devoted less and less store space and marketing to feature phones. In 2013, smartphones outsold feature phones for the first time, accounting for 51.8% of mobile phone sales in the second quarter of that year.
In an effort to provide parity with smartphones, modern feature phones have also incorporated support for 3G and even 4G connectivity, multi-touch screens of varying sizes, various sensors ranging from proximity sensors and GPS to Bluetooth and NFC, plus access to popular social networking services. However, their functionality and support for third-party apps purchased or downloaded via an app store or other online distribution platform are still relatively limited in comparison to smartphones. Despite these drawbacks, feature phones had accounted for 70% of mobile phones sold worldwide in 2011.
During the mid-2000s, best-selling feature phones such as the fashionable flip-phone Motorola Razr, multimedia Sony Ericsson W580i, and the LG Black Label Series not only occupied the mid-range pricing in a wireless provider's lineup, they made up the bulk of retail sales as smartphones from BlackBerry and Palm were still considered a niche category for business use. Even as late as 2009, smartphone penetration in North America was low.
In 2007, Apple introduced the groundbreaking iPhone and by 2009, the iPhone and Google Android shifted the smartphone focus from the enterprise to mass market consumers (at the expense of business-oriented operating systems such as Windows Mobile and BlackBerry). As a result, smartphones have enjoyed the largest selection and advertising among carriers, who are devoting less and less store space and marketing to feature phones and dumbphones.
In 2011, feature phones accounted for 60 percent of the mobile telephones in the United States and 70 percent of mobile phones sold worldwide. It is predicted that by 2013 feature phones' share will drop as smartphones become more popular, as half of all mobile phones will be smartphones. For the first time ever, in 2013, smartphones outsold feature phones in the second quarter, according to research firm Gartner. Smartphones accounted for 51.8 percent of mobile phone sales in the second quarter of 2013, resulting in smartphone sales surpassing feature phone sales for the first time.
A survey of 4,001 Canadians by Media Technology Monitor in fall 2012 suggested about 83 per cent of the anglophone population owned a cellphone, up from 80 per cent in 2011 and 74 per cent in 2010. About two thirds of the mobile phone owners polled said they had a smartphone and the other third had feature phones or non-smartphones. According to MTM, non-smartphone users are more likely to be female, older, have a lower income, live in a small community and have less education. The survey found that smartphone owners tend to be male, younger, live in a high-income household with children in the home, and residents of a community of one million or more people. Students also ranked high among smartphone owners.
According to Gartner in Q2 2013, 225 million smartphones were sold which represented a 46.5 percent gain over the same period in 2012, while 201 million feature phones were sold which was a decrease of 21 percent year over year, the first time that smartphones have outsold feature phones.
Feature phones, despite their additional functions over and above a basic mobile phone or "dumb phone", are still primarily designed as communication devices. Back in the mid-2000s, feature phone makers such as Nokia and Motorola enjoyed record sales of cell phones based more on fashion and brand rather than technological innovation.
However, consumer-oriented smartphones such as the iPhone and those running Android fundamentally changed the industry, with Steve Jobs proclaiming in 2007 that "the phone was not just a communication tool but a way of life". Existing feature phone operating systems at the time such as Symbian were not designed to handle additional tasks beyond communication and basic functions, did not emphasis application developers much, and due to infighting among manufacturers as well as the complex bureaucracy and bloatness of the OS, they never developed a thriving ecosystem like Apple's App Store or Android's Google Play. By contrast, iPhone OS (renamed iOS in 2010) and Android were designed as a robust OS, embracing third-party apps, and having capabilities such as multitasking and graphics in order to meet future consumer demands.
There has been an industry shift from feature phones (including low-end smartphones), which rely mainly on volume, to high-end flagship smartphones which also enjoy higher margins, thus high-end smartphones are much more lucrative for manufacturers than feature phones. For instance Apple Inc.'s operating margins from the iPhone remain high since these devices have always been sold to carriers at a high enough cost which compels carriers to get wireless customers to sign multiyear contracts. The shift away from feature phones has forced wireless carriers to increase subsidies of handsets, and the high selling prices of flagship smartphones have had a negative effect on the wireless carriers (AT&T Mobility, Verizon, and Sprint) who have seen their EBITDA service margins drop as they sold more smartphones and fewer feature phones. Trends have shown that consumers are willing to pay more for smartphones that deliver more features/applications such as 4G LTE and touchscreens, and smartphones have become a part of North American pop culture (while feature phones are no longer "cool"). Though smartphones cost more to produce they deliver high profit margins than feature phones, thus device makers and wireless carriers have shifted towards smartphones.
That being said, as of Q1 2012, only Apple and Samsung have been successful in the high-end smartphone market while all other manufacturers have broke even or lost money. Attempts by manufacturers to produce midrange or low-end Android smartphones in 2011-12 meant significant sacrifices to performance and usability, since the current iteration of Android is often too intensive for cheaper past-generation phone CPUs, such as Android 4.0 "Ice Cream Sandwich" on the LG Optimus L7).Nokia's turnaround effort with the Lumia Windows Phone devices was led by the inexpensive but fully featured smartphones that support the same OS as the flagship smartphones) that will sell in volumes to reasonably support the company's smartphone business as well as raise brand awareness, whereas high-end flagship smartphones will generate the profits but not be the main focus as Apple's iPhone (which does not compete in the feature phone category). At the moment, most of the focus is on high-end flagship smartphones, however Nokia has been trying to create feature phones with "smartphone functionality". An analyst noted Windows Phone has been successfully able to attract first-time smartphone buyers upgrading from a feature phone (52% of Windows Phone users had previously owned a feature phone), and as of 2013 over half of the US population still used feature phones. While this strategy was successful for Nokia and Windows Phone from 2012 to 2013, from 2014 onward saw the introduction of low-cost yet capable Android phones such as the Moto E and Moto G.
In contrast to smartphones which run rich-featured operating systems that can rival that of personal computers and have widespread support for third-party apps, feature phones run on proprietary firmware with third-party software support through platforms such as Java ME or BREW. The proprietary operating systems were not designed in mind to develop nor handle the intensive applications found on iPhone and Android, the latter which specifically catered to third-party application development which became increasingly important.
Otherwise, there is no standard way of distinguishing between them. Smartphone and feature phone are not mutually exclusive categories. A complication in distinguishing between smartphones and feature phones is that over time the capabilities of new models of feature phones can increase to exceed those of phones that had been promoted as smartphones in the past. Because technology changes rapidly, what was a smartphone ten years ago may be considered only a feature phone today. For example, today's feature phones typically also serve as a personal digital assistant (PDA) and portable media player and have capabilities such as cameras, touchscreen, GPS navigation, Wi-Fi and mobile broadband internet access, and even mobile gaming.
Typically a feature phone is a midrange or low-end device and a smartphone a high-end one. However the lines have blurred in recent years with low-cost but fully featured smartphones such as the Nokia Lumia 520 and Moto E, undercutting all but the most inexpensive dumbphones in pricing while running the same operating system as flagship smartphones.
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Feature phones are often kept in phone manufacturers' lineups for several reasons:
From the point of view of markets and consumers, there are several situations for which basic and feature phones are beneficial:
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