Latest trend: Smart and beautiful

Eddy P. Kasdiono, Jakarta

Undeniably, mobile telephones are now part of our lifestyle. At least according to the Siemens Mobile Lifestyle Survey, which revealed that a mobile phone is an inseparable part of the owner's life.

Similar surveys conducted in India, Thailand, Malaysia, the Philippines, Singapore and Indonesia have also show that there is a special bond between a mobile telephone and its user.

Understandably, therefore, the number of mobile telephones in the world continues to increase. As the number of subscribers to wireless operators' services rises, the international mobile telephone market will also be boosted. According to the International Data Corp. (IDC), the year 2004 saw over 590 million mobile phones in the market, a figure that is expected to jump to over 800 million by 2008.

Research conducted by IDC shows that the five mobile phone makers that dominated the market in 2004 will maintain their market dominance throughout 2005. They are Nokia, Motorola, Samsung, Siemens and Sony Ericsson. Other makers will have to be content fighting over the remaining 25 percent market share.

There is a special note, however, in a report presented in Worldwide Mobile Phone Review, 2004-2008 Forecast and Analysis, which predicts that the sales of 2.5-G mobile telephones will rise in the next few years before they are eventually replaced by 3-G (third-generation) phones. It is expected that as many as 100 million mobile phones of this transitional generation type will be sold in 2007.

"The smart-phone market tends to record higher sales both at the corporate and consumer levels," said David Linsalata, an analyst at Mobile Devices program, IDC.

The premium mobile telephone market is indeed lucrative owing to higher demand for sophisticated gadgets. Globally, as the research shows, there has been an uptrend in the mobile telephone market.

Growth has averaged about 30 percent annually with total sales as of the end of 2004 standing at 160 million units. Meanwhile, despite being fewer in number, mobile phone-PDA convergence products, better known as smart phones, have registered a higher growth rate of about 85.8 percent a year.

Mobile phone makers agree that the mobile phone industry has been developing extraordinarily over the past decade. "Today, a mobile phone is part of most people's lifestyle. That's why new products must show greater innovation," said Hasan Aula, country manager of Nokia Indonesia.

At present, most mobile phone makers have phones with the capability of taking or storing pictures, a feature that is normally used in 3-G based mobile phones.

Besides the use of SMS (short message service)-based technology, MMS (multimedia message service) technology has also become part of the inevitable development of mobile phones.

Rapid development in mobile phone technology has now been followed by the all-out competition among operators in providing superior services to maintain their subscribers.

Indosat, for example, has introduced i-say, a voice-based SMS service specially devised for users of Matrix and IM3 cards. Using this service, the sender only has to spend 20 seconds speaking his message, which will be instantly conveyed to its recipient. When the message arrives, the recipient will be notified and can listen to it after dialing 989.

Operators earn quite a large income from their SMS services. In the case of Indosat, for example, its earnings from the SMS service account for 27 percent of its total income, although its voice-based services are still dominant.

Telkomsel, meanwhile, has seen its earnings from SMS services grow by 66 percent, reaching a total of Rp 3.62 trillion or a quarter of its total earnings.

It is expected that voice-based SMS services like Indosat's i- say will gain greater popularity among cell phone users in Southeast Asia, an estimate confirmed by the result of last year's survey conducted by Ericsson, a provider of telecommunications networks and involving 5,000 cell phone users in Singapore, Malaysia, the Philippines and Indonesia. About 20 percent of the respondents say they would like to use this new service.

This survey has also found that mobile phone users have been eagerly awaiting the advent of the 3-G, a technological standard that improves the performance of a cellular network.

This new technology will allow faster Internet browsing and more advanced data dispatching, as well as giving clearer voice quality. This 3-G service will apply to GSM and CDMA operators. The 3-G coming from a GSM (global system for mobile communications) network is called WCDMA (wideband code division multiple access), while the 3G for CDMA is called CDMA200-1xEVDO (evolution data only).

Earlier this year, 125 operators in 56 countries made use of the 3-G technology. In Indonesia, the operators of CDMA Mobile-8, Telkom Flexi, Telkomsel and Cyber Access Communications have experimented with the use of 3-G technology but the results have not yet been satisfactory.

It is at this juncture that the existing operators put their future at stake. In this context, a regulation conducive to the use of this new technology is needed so that the services provided by these operators will be as excellent as those enjoyed by cell phone users abroad.

Cell phone producers will be challenged in particular to translate their handset concepts into reality. The realization of these concepts must not only reinforce their favorable image but also be accepted broadly in the market as a trendsetter among mobile phone users. -- The writer is the head of Jakarta-based Initiative Research Group.