It's a Mobile Phone

The gadget 25 lakh Indians are buying every month has evolved into a digital Swiss Army knife—it handles photos, videos, music, e-mail and more. The future devices will have even more features.

Sunil Mehra is confused as hell. Nearly a dozen visits to the market in three weeks and he still cannot find a replacement for his two-year-old Nokia 3310-a phone that now looks like a cellular relic to him. Mehra's problem is not a lack of options, but an excess of them. The confusion isn't so much about which cell phone to choose, but what features to have in his phone.

IMAGING: Two years ago, a basic CIF camera in a mobile (352 x 288 resolution max) was a show-off item. Today, VGA camera is giving way to 2 mega-pixel camera with 8x digital zoom and Carl Zeiss lens. Record up to one hour of video and play directly on TV without a PC interface. In 2004, 21.5 crore camera phones were bought. ENTERTAINMENT The melody in mobile began with monotonic ring tones. Today, phones can store up to 3,000 stereo tracks of quality music. FM radio is a standard fare, so are short video clips. Coming next: live TV, two-way 3-D gaming, visual radio and Bollywood flicks on rich 262k colour screen. CONNECTIVITY Phone calls and SMS are still the biggest uses of the mobile. E-mail on the move is becoming popular. Add a wireless keypad and the daring might leave laptops behind. Come 3G (broadband in mobile) in 2006 and you can make mobile video calls.

Mehra was happy when his 3310 made his calculator, bulky phone diary and alarm clock redundant. That meant fewer things to carry for the Delhi-based sales executive. Now, by picking the "right" phone he hopes to get rid of the pocket radio, voice recorder, camera and Walkman from his travel gear. That's not all. Mehra is also wondering if his future phone can minimise the need to lug his laptop around. The dilemma is as much over the phone's functions as about its form-the handset should combine style, substance and affordability.

Genuine as Mehra's indecision may sound, there is no way he can escape the dilemma. No matter which phone he buys, a more sophisticated and feature-packed handset will be out the very next week of his purchase. It will probably be cheaper than the one he bought. Ask over 20 lakh Indians who are buying mobile phones every month-or the 6.3 crore people doing so worldwide. Roughly five mobile phones are bought every minute in India. No other product in history has held the fancy of so many Indians-from house maids to managing directors-for so long.

Yet, this is just the beginning. By 2010, India is likely to have 35 crore mobile phone users-up from about seven crore by the end of 2005. This five-fold growth in five years is expected to come by adding about 50 lakh new subscribers every month for the next five years. What will drive this growth? And what will the future mobile phones do for us?

So far, the twin triggers for the cellular phone expansion have been falling prices and rising utility. "Increasing affordability and availability of mobile phones and services on the one hand and convergence and miniaturisation of multiple devices on the other are driving the demand for mobile phones," says Sanjeev Sharma, managing director, Nokia India. According to a CSFB estimate, the average cost of mobile services fell by 73 per cent between 2002 and 2005. The price of handsets has fallen by 15-20 per cent a year since 2002. The number of cell-phone subscribers increased from about one crore to over six crore during the same period.

NEW USAGES: Be it for entertainment or commerce, mobile phone's uses are    multiplying
HOME SECURITY Open the electronic lock on your door with your mobile. An IC chip in the handset enables this. A similar application can be used to secure a car. Unauthorised entry will trigger a phone ring.	MOBILE MONEY Make your wallet slimmer. The IC card can replace not only cash but also credit cards by enabling direct, secure and on-the-spot payment from your bank or through credit cards.	NAVIGATOR AND MEMBERSHIP ID Access local maps and city guides while on the move. The IC chip doubles as your unique identity card. Trading in equity shares through mobile also been test launched.
MONITOR KIDS, ELDERS Get an SMS when your kids enter home, without their knowing. An SMS from your phone can trigger webcam in your house from where you can receive an MMS of elders and kids at home.	KNOW STATUS OF CALLED PARTY Wondering if the person you are calling on the mobile is busy, asleep or out of town? It will soon be possible to know the availability status of the person you are calling.	COUCH POTATO ON THE GO Live TV news, soaps, sports telecast streamed directly on to your mobile phone. Ditto for film trailers and songs. Also, play games in real time with anyone across the world.
DOCTOR AT HAND Ambulance crew capture images of accident victim and e-mail them to hospital. This helps doctors prepare the equipment for incoming patients. Applications have been developed to let doctors access patients' medical records, test reports on mobile phone.	VIDEO CHATS AND VISUAL RADIO Do video conferencing or chat with friends (even more than one at a time) while on the move. Visual radio allows listeners to interact with radio stations, participate in contests.

This growth has come when only one-fourth of Indians (about 25 crore) have access to mobile phone services. The rest-some 75 crore people-can't have mobiles even if they can pay for it, because cellular networks haven't yet reached their towns or villages. Once they too join the mobile bandwagon, the demand could explode. A year ago, only about 2,000 urban centres were covered by mobile networks. Today, the figure is over 4,500. However, the reach in rural interiors, where mobile services are probably needed more, will require both a policy and a corporate push.

VOICES

"India's young and tech-ready population makes for a very attractive market for mobile phones." SANJEEV SHARMA, MANAGING DIRECTOR, NOKIA INDIA "We plan to have a global launch of at least one mobile phone model in India." LLOYD MATHIAS, DIRECTOR (MKTG), MOBILES, MOTOROLA INDIA "The mobile phone is no longer only a talking device. It is also an entertainment device." SUDHIN MATHUR, GM SALES, SONY ERICSSON MOBILE COMMUNICATIONS "We have plans to manufacture two crore mobile handsets in India by 2010." H.S. BHATIA, PRODUCT GROUP HEAD, GSM PHONES, LG ELECTRONICS "India is a critical market for entry-level phones. What works here will work in other countries." ASIM WARSI, AGM, MARKETING, TELECOM DIVISION, SAMSUNG INDIA

The demand will also depend on how much and how fast the total cost of ownership (TCO) of mobile phones falls. TCO includes the price of the mobile handset and the first year of service cost. Even though mobile tariffs in India are already among the lowest in the world, they are set to fall even lower. Reason: Indians are also one of the heaviest users of cell phones (see chart: Volume Driven Market). "Even at such low tariffs, the Indian mobile industry is viable and poised for faster growth," says T.R. Ramachandran, director-general of the Cellular Operators Association of India (COAI).

Though cost and availability are the prime drivers of demand, there are other factors making mobile phones a rage. The most obvious is the convergence of different gadgets, turning the cell phone into a digital Swiss Army knife of sorts. While falling prices are driving the demand for handsets and services among first-time buyers, the ever-expanding usage of the device is luring mobile users into replacing their handsets. Of all the consumer electronic products in the market, cellular phones have the shortest shelf-life. About 20 per cent of the current demand for handsets is replacement demand and CSFB estimates that the figure could touch 60 per cent by 2010-by that year six out of every 10 buyers would be those who are upgrading their handsets.

That isn't as optimistic as it sounds. According to Sudhin Mathur, general manager, Sony Ericsson, at the beginning of 2005 about 80 per cent of handsets in India had black-and-white screens. Ten months on, 60 per cent of the handsets have coloured displays. A year ago, having a camera phone was a matter of pride and most cell-phone cameras could not take pictures of a resolution higher than 352 x 288 pixels. Then came VGA cameras (maximum resolution 640 x 480 pixels or 0.5 mega pixel), which are already being phased out for cameras as advanced as 2 mega pixels with an 8x digital zoom and a top-of-the-line Carl Zeiss lens. By upgrading the quality of a handset's add-on features, companies are turning accessories into necessities. In 2004, 21.3 crore camera phones were sold worldwide and the projection for this year is close to 39.5 crore. The day is not far when the world's largest camera-maker will be a mobile-phone manufacturer.

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