Are Tablets a longer term threat to Smart Phones than Laptops?

My AT&T bill just finished a billing cycle, I used 650 minutes total on my cell phone plan and 500 MB of data.  Most of my data access is on wifi.  Do I really need a smartphone?  Or will my future Motorola Xoom make the smartphone obsolete?  Some people are addicted to be connected all the time, but is it better to have a dumb cell phone and be connected with a Tablet when you want to?

Businessweek has an article exactly on this idea.

Size Matters: Tablets vs. Smartphones

When consumers weigh buying a tablet, a smartphone, and a basic, no-frills phone for calling, the smartphone looks expendable, contends analyst Eric Chan

By Eric Chan


Smartphones are the products most at risk of cannibalization in the rising tide of tablet sales—not laptops, as some industry analysts are predicting.

Current forecasts for the 'tablet effect' are shortsighted and fail to consider the long-term implications that this phenomenon will have on the mobile electronics industry. While tablets are likely to crimp laptop and netbook sales for the first year or so—until consumers fully understand what a tablet is—the long-term trend is different. Laptop sales will bounce back. Smartphone sales will drop. This long-term trend should be clear just by looking at user surveys, product evolution, the redundancy factor, and basic economics.

Eric Chan sees the change in the younger audience.

I specifically see smartphone sales falling among consumers in the 13-17 and 18-24 year old markets. Young consumers will start buying down on their phones, opting to buy a tablet plus a feature phone, rather than the expensive redundancy of a smartphone and a tablet, or the limited features of just a smartphone. These age groups are particularly vulnerable because they are already adopting tablets and e-readers as book replacements. Changing readership habits provides a strong incentive for moving to a tablet device; these demographics' smaller budgets will necessitate a buy-down on the phone. In the 25-34 market, consumers will still use smartphones when employers provide them. Left to their own devices, a significant proportion will opt instead for a tablet, plus a basic phone.