Emerging Trends: From a technology point of view, the merger of Wi-Fi with VoIP is something that shows promise. VoWi-Fi or Voice over Wi-Fi simply means a Wi-Fi based VoIP service. Put in another way, a wireless VoIP system. Whereas VoIP consists of the hardware and software that enables people to use the Internet as a transmission medium to make calls, VoWi-Fi is the wireless version of this technology that is designed to work on wireless devices such as a laptop or PDA. Along with the added benefits that it brings to businesses and to those with a need for wireless communication, VoWi-Fi opens up the door for a whole new market of consumer products such as a standalone VoWi-Fi handheld.

Getting Hot on Hotspots: While initially the response to public Wi-Fi services was tepid owing to QoS issues, in recent past there has been an increase in usage. The service providers have evolved business models and view this as a potential lucrative service option. The early 2005 announcements by the government to delicense the 2.4 GHz and 5.1 GHz bands, on which the Wi-Fi platform works and with incumbents like BSNL and MTNL looking at this space actively, the adoption is set to grow. The VSNL and GFA India tie-up is a case in point. Dishnet Wireless also launched its Wi-Fi services last year through its brand Dishnet- Red Broadband Wi-Fi. The company has ambitious plans to create 6,000 Wi-Fi hotspots across the country over a period of one year.

Outlook: Security and quality of service are still the areas of concern with WLAN, though this issue is continuously being worked upon and features are being enhanced to take care of these issues. With the 802.1x authentication security challenges have been mitigated to a large extent and more enterprises are going for WLAN deployment.

Applications
With over 100 mn mobile devices in India, it is estimated that the market will see 0.2% of the phones picking up mobility application. In rupee terms this can be estimated at Rs 300 per consumer and Rs 3,000 per enterprise user. This results in about Rs 60 crore of revenue for mobile applications for each of the segments, enterprise and consumer. Apart from applications on the handheld itself there are applications like RFID, which made their visibility more prominent during the year. The market for mobility applications is certainly looking up.

The growing competitiveness in the industry is leading to a large mobile work force, cost cutting and turnaround time reduction that enhances customer responsiveness. The growth in converged smart mobile devices and mobility applications is being driven by two different categories of customer. Individual buyers are simply upgrade to the latest high specification phone, which often happens to be a smart phone. On the other hand, the rapidly rising interest in mobile e-mail solutions is driving shipments into enterprises.

Future growth drivers will be convergence and multimedia in the consumer space. In the enterprise space productivity applications are expected to drive proliferation of next-generation mobile devices and applications. Though security concerns are still one of the obstacles in the way of widespread adoption of mobility applications among the enterprises, the market will continue to witness a growth momentum.

The Chosen Few: If global trends are considered, on the enterprise front e-mail is one of the most widespread applications followed closely by sales force automation, dealer management and Customer Relationship Management (CRM). In India too, the trend is following in similar steps. Productivity applications are primarily aimed at marketing. These allow sales people to spend more time interfacing directly with customers as they are always mobile and spend less time sitting on the desk.

Apart from the B2B applications, a huge market emerged on the B2C front as well. Some of the popular applications herein include mBanking to end users, mobile marketing and short code SMS services like mobile contests, alerts, caller ring back tome, etc.

In FY 2005-06, mobile marketing saw the beginning of some big brands using mobile advertising. Banking and Insurance sectors have been the fore runners in terms of adoption of this technology for B2C applications. Large enterprises have also started using mobile as an effective media to reach to their customers, as it is cost effective, with small and medium enterprises also following in.

Some of the applications that are likely to find their foothold in the Indian market over the next few years include Location Based Services and RFID on the enterprise front and interactive gaming with two-way response and m-commerce on the consumer front.

The driving factors in the next 1-2 years will be increased availability, easy to integrate applications and competitive advantage to enterprises to have a better around time and quick and improved decision-making. Among the trends, enterprises are increasingly seeing Internet to be the backbone of mobile applications rather than packing intelligence into smartphone/PDA etc. The trend will be to provide applications on centralised locations, which will be accessed with the mobile device.

Smart Handheld: Gone are the days when laptops were considered synonymous with mobile computing. The past two years have seen the emergence of smart handheld devices that have found their way both in the enterprise and consumer markets. In 2005-06, the market for smart handheld started its movement towards becoming mainstream driven by the boost from the consumer segment.

According to IDC, the total market for smart handheld touched 1,181,397 units in 2005-06 as compared to 296,009 units in the previous year. The market size in terms of value stood at Rs 1,694 crore up from Rs 641 crore in FY 2004-05. Thereby, clocking 299.1% growth in volume terms and 164.4% growth in value terms. As per IDC, the smart handheld market is basically categorized into pen-based handheld and the converged handheld. The converged handheld is further classified into data-centric and voice-centric devices. The voice-centric converged handheld presently account for the bulk of the market and will continue to do so at least for the next 2-3 years.

The whopping growth rates were driven to a great extent by the drive from the consumer market. The increasing disposable income at hand as well as the southward moving price trends attributed to the growing demand in the consumer segment. In FY 2005-06, many of the smart phones got into the mainstream with the falling prices. For instance, a voice-centric handheld priced at around Rs 25,000 in 2004 was available at around Rs 8,000 - 9,000 price points in 2005. Further, a data-centric handheld starts at around Rs 16,000-17,000. With the smart handheld becoming more affordable their penetration grew further into the market.

A highlight of 2005-06 was the fall in the pen-based device market, from 14,213 units in 04-05 to 7,682 units in 05-06. This was largely due to the fact that this market is highly applications driven. While on one hand the application developers on these devices are few, there is also the challenge of long gestation period for these applications in the Indian market. However, these devices are finding their way into niche categories like the FMCG sector as well as verticals driven by retail sales.

Visualizing a better growth opportunity in other markets, many of the players in the pen-based market have started focusing on the converged handheld markets.

While the smart handheld market was driven more by the consumer demand, a huge portion of this demand came from the corporate executives. As a result, the market was driven by both the need to make style statement and as productivity enhancement tools. The latter was more prevalent in the data centric market.

Nokia continued its lead over its competitors by a very huge margin. With 10,99,160 units sold out of the total market of 11,81,397, Nokia made up for the bulk of the market. Thereby, it emerged as the undisputed No 1 vendor. It was followed by O2 and RIM, which also made the most out of the burgeoning market growth and enjoyed good growth numbers. But they failed to keep up with Nokia's market share. 

The future certainly points towards the converged devices as the pen-based handheld market is expected to further de-grow over the next two years.

Shipra Arora
shipraa@cybermedia.co.in

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