TECH FADS APART, SOME WANT A CORNER TO TALK AND PLAY

An industry study predicts cellphone subscriptions to touch the two billion mark by the end of 2005. In other words, one in every three persons living on this planet will soon have a mobile phone. Since the last couple of years, mobile phones have changed our lives in more ways than one — the way we communicate, the way we do business, the way we spent our spare time.

Mobile phones have changed the way the entire IT and consumer electronics industry operates. Digital imaging has developed in ways that were unimaginable since digital cameras first entered the mainstream only five years ago. The volumes of camera phones reached 90 million in 2003, outnumbering the numbers of digital cameras sold. This has made mobile manufacturers the driving force of the digital imaging industry.

City Times caught up with Mads Winblad, Vice President, Sales and Channel Management (Europe, Middle East and Africa) Multimedia, Nokia to know more on the trends that govern the world of mobile phones. The market leader in mobile phones, the Finland-based phone manufacturer controls over 30 per cent of the global cellphone market.

What are the challenges that a telecom equipment manufacturer like Nokia faces in the Middle East North Africa (MENA) region?

We cover 19 countries from our office in Dubai. In some parts of this region, the mobile penetration rate is as low as two per cent and in others, like the UAE, it is as high as 85 per cent. It is quite a challenge to serve such a region.

We believe that some of the low penetration markets will leapfrog technologies and directly adopt the latest. This market is jumping over a step of the development curve. Most other countries had to go one step at a time in the development curve. Interestingly, we have noticed in the region that there is a demand for high-end phones even in a lower penetration market. For us, high-end phones mean more revenue. High value and more volume means more revenue.

The speed of the development curve here will be much faster than that we had seen in Western Europe, when the mobile phones were introduced in the market in the early 1990s

Do you believe that the service providers in the region are ready to leapfrog technologies?

The biggest challenge in this area will be if service providers subsidise their products like they do in Western Europe. In Western Europe, they buy our devices, add Euros 100 to Euros 200 to it before selling it to the consumer. They then get into a contract with the consumer to use their services for a year’s time. In such a scenario, the value of a phone goes almost unnoticed. The customer is not paying the real value of the phone. In such a scenario, manufacturers are not able to draw up the right price range for their phones.

Multimedia Messaging Service (MMS) has not been as successful as SMS. Do you agree?

MMS has huge potential. The operators need to push MMS the right way for it to be successful. There are two reasons for MMS not being successful. First, there is no interoperability between networks. I am still not able to receive an MMS from my friend who is being serviced by a different operator.

Second, if MMS is positioned as a premium service to SMS, it will not work. For customers, MMS is an evolution of SMS. They don’t care if only 30Kb or 50Kb of data can be send or received. What they want is the picture on the phone.

Are operators the only ones who should be blamed for MMS not taking off the way it should have?

It is in the hands of the operators to ensure that MMS takes off. All technologies to ensure that takeoff is available. They need to chalk out the interoperability between networks within a country or between countries. We see a huge potential for MMS in this region, especially looking at the number of camera phones that are being sold here.

However, it is not the operator alone who should be blamed for it. We, manufacturers, should also take the blame. We should make bigger efforts in ensuring that the service takes off well.

What would drive the mobile phone market in the coming years — gaming or imaging?

We believe mobile phones are voice centric and basic. For Nokia, gaming is part of its multimedia area. It is part of the IP convergence area. We believe that there is a higher growth there than the traditional voice area.

The voice part will also develop with features such as push to talk, voice over IP and so on.

We want to develop a new market in the gaming industry. We want to create a market by utilising the network operator's capabilities to being mobile online. Many people misunderstand our position here. They feel we are competing against a PS2 or a Nintendo. On spending part, yes we are competing with most other gaming devices. From market segmentation point of view, this is not the area where we want to compete. Nokia wants to compete in a corner where you can be mobile and be connected online at the same time.

Does the customer realise the existence of such a market segment?

No, they don't. There are reasons for it. We have not been able to provide more games for the consumers. We have created N-Gage gaming arena — an Internet address hosted by us, where people can download or chat/play with other people who are online, through GPRS. We have not been able to provide enough games for the arena. We did not have a clear picture about positioning the whole concept, when we launched.

A market for mobile phone gaming seems to have been found by accident. Did mobile phone manufacturers like Nokia realise the potential of such a segment earlier?

We did realise it some five years back. The game device that we have today is fantastic. But people want the device with their mobile phone. If you look at it, it is not a real mobile phone, it is optimised for gaming.

In the future, we need to ensure that the gaming facility is more combined with the mobile phone facility.

You mentioned about seeking a corner of the gaming industry. What is the profile of your target consumer in the segment?

It has to be a hardcore gamer. Our devices provide a different gaming experience — it is different sitting in front of a large screen as with PS2 compared to a small screen of the mobile phone. Today, with mobile phones, you can play a game sitting where you are now with a person who is probably travelling in a bus in some other city. What we want to add to the gaming arena is that mobile element. That is the reason for our device being priced higher than other gaming consoles. Today, we have 200,000 frequent N-Gage arena users. And we see it growing. By the second half of 2005, customers will be able to download more multi-player games from the N-Gage arena.

We did make mistakes when we launched gaming. Since early 2004, we have been working to correct them.

How will the features of the next generation smartphone?

From the processing power and functionality point of view, it will take over laptops and desktops. But from the usability point of view, you will still need a laptop.