Business has never been better for the global mobile phone industry. Handset manufacturers, in particular, had a lot to celebrate with high volume sales across most markets in 2006.
According to IDC's Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 1.019 billion mobile phones in 2006, or 22.5 per cent more than the 832.8 million mobile phones shipped in 2005.
Analysts from IDC, a leading global provider of market intelligence and advisory services for the IT, telecom and consumer technology markets, attributed this unprecedented figure to a strong demand in emerging economies in Asia, Central and Eastern Europe, the Middle East and Latin America.
According to analysts, mobile phone shipments to these markets crossed those to mature markets such as Japan, North America and Western Europe.
Similar to markets across the region, the UAE is also experiencing benefits of this windfall. "The UAE is among the most vibrant markets in the Middle East, Africa and Eastern Europe, says Naser Shashaa, Research Manager, IHD Group MEA, IDC.
"Besides higher purchasing power over its neighbours, the UAE also plays a vital role in serving the region as a whole, be it through its retail outlets or a dedicated channel. The replacement cycle and multiple-mobile ownership (a personal and a company mobile in some instances) are unique features of this market," he says.
Mobile penetration in the UAE
Another important factor that reflects the importance of the UAE for the mobile phone segment is the growing number of mobile subscribers year-on-year.
According to Mohammad Hassan Omran, Chairman, Etisalat, the company has added 280,000 mobile subscribers in the first quarter of 2007. Since the first quarter of 2006, there have been more than a million additional mobile subscribers with the total reaching 5.78 million subscriptions by the end of March 2007.
This increase has resulted in a mobile service penetration of 135 per cent of the UAE population. Several developments in the telecom sector, including a second operator Du launching services in February has also helped the mobile telephony sector.
This has led to the introduction of competitive tariffs and services such as mobile TV and video calls, by both Etisalat and Du.
Etisalat, which extends 3G and 3.5G-network coverage to 97 per cent of the UAE's population, says the number of 3G subscribers in the UAE has now exceeded the one million mark.
Etisalat also offers mobile TV, Blackberry Pearl, location-based services such as ‘Mobile Map' and ‘Nearest', MobileCam surveillance services, MMS and voice mail.
Du also offers 3.5G mobile broadband services, including 3G mobile TV, discounts for calling selected friends or family and payments by mobile phone, among other services.
Shorter shelf-lives
As mobile services have become more competitive and technologically advanced, consumers in the region are also looking for handsets that support them.
"Operators are launching new services that generate additional revenue in addition to voice revenues. For instance, in 2006, there was a 50 per cent increase in network support of Enhanced Data rates for GSM Evolution (EDGE) data, which means it's become more available to users, and phones that don't support that will become a liability to the end user and operator.
"Phones need to be able to clearly support these services and operators' initiatives," says Raed Hafez, Director of Product and Technology, Motorola (MENATPAK).
Hafez says that consumer tastes change continuously and technology tends to be short-lived. "It's not just about functionality anymore - the mobile phone is now the number one accessory and has to look the part as well," he says.
Andrew Song, Head - Mobile Communications, LGE Middle East and Africa Operations, agrees that UAE consumers are style conscious and need their phones to look good in addition to having good features.
Additionally, many consumers prefer to have their handsets bluetooth-enabled apart from having a good camera resolution, an MP3 player and FM radio.
Cutting-edge phones
What consumers want can be linked to different segments such as multimedia and messaging devices, feature packed fashion phones, and everyday communication devices.
"From a feature point of view, those in the multimedia segment want seamless integration of content at high speed. They want fantastic wireless music experience using state-of-the-art accessories, and they want video capture and playback capability that allow them to capture and share memorable moments.
"The messaging segment is looking for a device that converges both their work and personal e-mails. They also want to stay connected with their friends via constant messaging, SMS and MMS. They want it all in one device and in one single view.
"The everyday communication segment is looking for a cost-effective, well featured and stylish phone. Shopping on a budget doesn't have to mean sacrificing functionality or style," says Hafez.
Handset manufacturers are also meeting the requirements of consumers with a wave of new launches. For instance, LG recently launched its latest phone - the LG Prada.
"The phone is a collaborative design effort by both LG and Prada. We have also launched the LG Shine. Popular Arab diva, Nawal Al Zoghbi is the brand ambassador for LG Shine," says Song.
New products on the block
Sony Ericsson also has new phones to suit different segments. "We have announced the T650. With a scratchproof, crystal glass display, brushed aluminium, and special lighting effects, the new cool and stylish design will appeal to fashion and tech savvy users.
"Our new K810 Cyber shot camera phone has features such as a built-in xenon flash, photo blogging and photo-fix. We also have the W880, a sleek 9.4mm thin 3G, Walkman phone with a capacity to store 900 tracks, and video call capabilities," says Husni El-Assi, General Manager, Sony Ericsson Mobile Communications International AB, Middle East and Northern Africa. Samsung recently launched the F 300 music phone.
"Its unique feature is its double-face design that houses two displays embedded in the front and rear, respectively. Samsung phones now come with mobile trackers and auto time set-up for frequent travellers," says Sandeep Saihgal, Senior Manager, HHP Division, Samsung Gulf electronics.
Motorola recently launched the next-generation RAZR2. To be made available regionally from July, this device has cutting-edge features such as CrystalTalk1 technology, up to two GB on-board memory, web browsing3, real-time point-to-point video3 and ultra-fast menu navigation; all packed into a slimmer and sleeker design.
In keeping with the trend of convergence, there is also a growing preference for wireless handhelds and smart phones, especially among business users.
"The reason," says Jack Craine, General Manager of i-mate, "is that businesses need to stay connected 24/7 in today's technology-driven society. Instant messaging, internet and technological advancements mean that there is no excuse for someone to be unreachable.
Smart phones are the answer to the increased demands on business users. Enterprises need mobility solutions such as push e-mail to allow their employees the freedom to move around as their business dictates and access critical information at their fingertips".
Over the past five years, i-mate has launched 20 cutting-edge devices, which cater to those needs and have led i-mate to become one of the industry's leading wireless smart hand-held vendors, with a UAE market share of 73 per cent (source: Canalys), says Craine.
The company also recently launched JAMA, its latest Pocket PC, for people who want to be mobile instantly without having to carry around a large device.
Nokia also has an impressive line-up of phones in this segment. "The Nokia N95 is the ultimate multimedia computer and a fantastic example of what Nokia Nseries devices can deliver," says Neil Gordon, General Manager, Multimedia, Nokia Middle East and Africa.
"It easily replaces a number of single purpose devices with a well designed package." The new Nokia Eseries phones also support increased mobility among business customers and operators. Raed Hafez, Director, Product and Technology, Motorola, (MENATPAK), says that phones such as the MOTO Q are in high demand for their combined functionality in one attractive package.
Vishnu Taimni, Category Manager, Notebooks and Handhelds, HP (ME), says that HP is also witnessing growth in its handheld business, especially in the converged space with the launch of the rw6815 and HP514 platforms.
Sony has also launched the Sony Ericsson P1 - which Assi calls a new chapter in smart phones. "This multimedia phone has a touch screen, 3.2 megapixel camera with zoom, music player with track-ID, push e-mail, business card scanner, wi-fi, internet support, etc. The Sony Ericsson P1 will build on the success of its predecessor P-series family," he says.
It's a rage
The market for smart phones is slated for further growth. "Smart phones will continue to be a high growth segment within the Middle East and the UAE as customers here are early adopters of technology, and quickly understand the benefits to their business," says Craine.
"Mobility solutions," says Shashaa (quoting the IDC Predictions 2007 Middle East and telecommunications Markets report), "will also gain traction among large and medium enterprises. Many operators across the region launched mobile push e-mail solutions during 2006, while vendors such as RIM, Nokia Enterprise Solutions, Symbol Technologies (acquired by Motorola) and Visto strengthened their sales and marketing efforts in the region."
The report also predicts that 2007 will be the year of 3G and 3.5G and WiMaX deployments.
Shashaa says there is a continuously increasing interest in 3G services, such as video calls and mobile TV.
"As the range of handsets is expanding now and once the content barrier is overcome by partnering with local-content providers and having a customer-focused marketing strategy, those services will gain momentum to take off," he says.
