Competition in smartphone market getting fiercer

Burhanuddin Abe, Contributor, Jakarta

Many people can't live without a mobile phone. With the wide range of features incorporated, apart from being a versatile tool of communication, it is also regarded by some as a fashion item, as evidenced in the trendy designs on offer.

The rapid pace of development in telecommunications technology, especially in cellular phones, has benefited consumers, as many carry low price tags.

A certain segment, however, goes for the most advanced type -- generally referred to as the smartphone -- that contain almost every feature needed for all sorts of telecommunications. Naturally, they cost more.

One example is Motorola's latest product: the RAZR V3. The super slim, clamshell cell phone with an attractive metal casing and an array of features is believed by the manufacturer to have a competitive edge and yet another stylish fashion item for Indonesia's trendsetters.

Inside the small-sized gadget are various features to match the segment's demands, such as a camera, speakerphone, Internet access, MP3 ring tones, games (Java-based), a 2.2 high-resolution screen, 3D graphics engine, bluetooth and a keypad with cool blue electroluminescent backlighting.

Motorola also offers other hi-end products: the MPx with a 1.2 megapixel capacity and huge display that can be opened in two directions, either for portrait or landscape; the V535 clamshell with changeable covers (or "skins" as the producer refers); the A768 Linux-based Personal Digital Assistant (PDA); and the E680 that provides more entertainment features. With its innovative products, Motorola is aiming to regain its previous position as the pioneer in the cell phone industry.

Other big players, including Nokia, Sony Ericsson, Samsung, Siemens and Philips, have also launched their high-end products, each with its own unique features. They are marketed partly in answer to a number of latest needs, such as Multimedia Message Service (MMS) that is also gaining popularity next to the already established Short Message Service (SMS).

One of the premium gadgets (some brands sell for US$600) is the smartphone that combines all the capabilities of a cell phone and the functions of a PDA. Given the wide range of features, it is comparatively heavier and bulkier.

Recently Finland-based Nokia has launched a number of cell phones to match its market segment. For Indonesian high-end customers, it has introduced the Nokia 9500 Communicator, which was on display at a telecommunications exhibition in Cebit, Hannover, Germany.

The 9500 Communicator incorporates a huge array of high-tech features that fits its name, including a digital camera, WiFi and EDGE/GPRS capabilities. It has easy access to computers using the Universal Serial Bus (USB) wire as well as bluetooth. With a price tag of Rp 9.5 million (about US$ 1,000) here it is much slimmer than its predecessor, the Communicator that was launched some eight years ago.

The company plans to launch early next year an extended version, the 9300, and claims that data and voice communications featured are superior than other PDAs currently available. For Nokia, the 3G (third generation) communications is the target.

Meanwhile, Sony Ericsson has marketed the P800 that belongs to the same class. The market of smart digital communications gadgets is indeed becoming more competitive with another PDA, a non-cellular type, on offer: the XDA IIs made by O2, which is a stylish head turner. It also has a huge memory capacity -- 128 MB -- with an operating system of Microsoft Windows Mobile 2003 (Pocket PC edition) and equipped with a 802.11b WiFi, bluetooth and infrared connections via USB.

From Hewlett Packard comes the Ipaq 6365, a US$ 649 pocket computer that can be used for making phone calls, writing notes, presentations and wireless connections. Different from other PDAs that use the Xsale processor made by Intel Corporation, the Ipaq 6365 uses the OMAP1510 processor made by Texas Instrument.

A recent survey by International Data Corporation (IDC) reveals the growth of this year's cell phone sales globally at about 30 percent compared to last year's sales of about 160 million handsets.

The smartphone segment, those with combined capabilities of cell phones and PDAs, meanwhile, enjoys a larger percentage of growth: 85.8 percent, with sales estimated at about 20 million by the end of the year. The largest market share is also estimated to be grabbed by those with software having the Symbian, Microsoft as well as the PalmSource system.

According to IDC, five manufacturers dominate the 2004 market, with Nokia having 29.3 percent share, Motorola 16.6 percent, Samsung 13.1 percent, Siemens 8.4 percent, Sony Ericsson 5.8 percent, while other brands are fighting it out with a "share of the pie", 26.9 percent.

In Indonesia, Nokia with a 32 percent market share, is still the market leader. Motorola has improved its ranking, from its previous fifth to this year's number three, with a nine percent share, which is below Sony Ericsson's 17 percent.

Scott Durchlag, the vice president and general manager for Personal Communications Sector (PCS) for Motorola Inc. Southeast Asia operations, said that the company's recent achievement in the region, including here in Indonesia, was the result of implementing key strategies to win the market. "In the United States, Canada and China, Motorola still leads the markets," he said.

Cell phone and other sophisticated communications producers agree that aside from being lucrative, the market is becoming fiercely competitive, and only those with products that accurately match consumers' demands, use the right marketing strategies and sold at affordable price, will ultimately turn out as the winners.