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Handset Happiness

The mobile phone market has been in frenzy for a year. A look at what's next in its ever-charged evolution.

By Payal Sethi

The mobile telephony frenzy, quite clearly, was the unmissable part of the incredible year that was 2003. At the end of 2002, India had just 10 million people walking about with those handy little gizmos that burst into their carrier's consciousness at the most unexpected of times. By the end of 2003, the figure was over 28 million.

To put that in perspective, that's a jump of "almost 1,500 per cent against 2001", in the words of Pankaj Mohindroo, President, Indian Cellular Association (ICA). Explosive.

The question is: what happens this year? And the short answer is: another 22 million, by the look of it.

Falling prices of handsets is one major reason for that optimism (the service charges crashed in 2002 and 2003, and will not be the dramatic story of 2004). "Internationally, our retail prices were very sharp," elaborates Mohindroo, "but with the recent duty cut, handsets are cheaper in India compared to Singapore, Hong Kong and Dubai."

There will, of course, be upgrades. The upper-end, or at least the gizmo-savvy, will want to trade old phones for new. But expect most of the market's action to come from swarms of new users rushing for their first-time hook-ups. Action is thus likely to be concentrated at the entry-level of the price ladder; the pitches made by phone marketers could also become markedly more 'mass market'. The direction of this market-addressal shift took definitive shape in the Spring of 2003, but the possibility of this arrow whizzing ahead in 2004 is sharp. Expect price-point play in the main, the mobile equivalent of the Rs 5 cola, so to speak.

Would 2004 be the year that CDMA phones outsell GSM phones? That's a big question, and it would be foolhardy to wager anything either way. The trend so far has been in CDMA's favour, what with the might of Reliance Infocomm urging India's teeming millions to get a 'grip' on their 'world'. Arguably, all the noise about 'value-added services' could take the battle from pure cost considerations to something more value oriented. But still, at the end, old-fashioned service competitiveness will probably tilt the scales.

What about hardware brands. Would Nokia's dominance, with its 'human technology', continue?

Ah, that's an interesting one, particularly since the projected volumes for 2004 are large enough for multiple players to make gains. Ericsson, the surprise ego-deflator of the mid-1990s, might spring another big surprise this year. The one-time leader is desperate to make up lost ground, and is making its second major push in alliance with Sony, its partner since 2001. The alliance's game: a handset as a creative statement, a fixation-free device that allows the imagination to expand unhindered in fresh directions. Says Sudhin Mathur, GM, Sony Ericsson, "Flexibility in design of Sony Ericsson phones has allowed consumers to create and modify their phones according to their requirements. It is our way of telling the consumer that the phone is 'Yours to Create'."

LG, that 'health' brand, could get markedly more aggressive too. It entered the picture only in November 2003. "On a conservative estimate," says Pravin Valecha, Country Head (GSM Mobiles), LG India, "we hope to sell 500,000 GSM units by the year-end." He expects the market to get significantly more colourful in 2004, even as the machine transforms itself from just a dull communication tool to an all-in-one convergence platform.

The little gizmos could soon be accessing bank accounts, shooting amateur movies, downloading music videos and a whole lot more. At the end, of course, the value won't be in what all those smartchips can accomplish in the machine, but what it does up there in the consumer's mind. Satisfaction can be vastly more complex once it's more than mere voice transmission the Graham Bell way.

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