Consumer spending is showing signs of faltering in some major economies — but no one has told the cellphone industry, which is now flying without wings. In the quarter ending September sales volume rose by 21% compared with a year ago, with ”smart” phones — which have music, video and other functions — rising by well over 50%.
This year, for the first time, more than one billion cellphones will be sold, equivalent to almost one new phone for every sixth person on the planet.
In a few years the cellphone has moved from being a consequence of economic growth, bought only by rich people, to one of its most important causes, particularly in the developing world. A study by the Centre for Economic Policy Research found that a 10% increase in cellphone penetration led to increased economic growth of 0,59%. This is partly because of the huge improvement in communications, vital for productivity improvements, that cellphones bring, enabling parts of Africa that the industrial revolution has passed by to leapfrog into the information age without laying down expensive fixed-line infrastructure.
In the developed world, cellphones are taking over the functions of PCs for business people on the move, and are about to get a big boost from the Web 2.0 phenomenon that enables services and games to be located on a website rather than on your hard disk. This makes sites such as YouTube (videos), Flickr or Photobucket (photos) plus blogs and MySpace accessible from your phone or mobile device.
CMWare, a US company, already offers a service allowing users of smartphones to access the music, photo and video collections on their home computers while they are on the move. How this will affect the iPod can only be guessed at. Although hugely successful, it has been bought by 40-million people compared with a billion in a single year buying cellphones that increasingly have music capabilities. In the end the single device will win, even though lots of people will still have iPods. Maybe one of those single devices will be an iPod phone if Apple can make another of its highly successful technological jumps.
At last week’s smartphone show hosted by Symbian, the UK-based company that claims 70% of the smartphone operating system market, Sling Media and Sony both launched software that will allow users to watch their home TV on their smartphones as long as they have installed a special set-top box. Only 5% of cellphone users actually play games today, but this could be lifted to 20% over time — though it may require more cellphone-specific games rather the PC retreads that are being marketed.
We are clearly at the beginning of the cellphone revolution. The list I keep of functions a phone can perform has now reached 60 (the latest two additions being a heart monitor and a projector). I could make the list even bigger if I recorded games, (Monopoly, chess etc) individually rather than as one category.
Three things are holding up the revolution. First, the development of a mobile device that is light enough and has a big enough screen to make viewing a squint-free pleasure. Some phones such as Nokia’s e61 are nearly there. Second, usability: there is no point in having Google on your phone if you need six clicks to get to its search box. Third, operators have got to tackle data charges since at the moment you can find yourself shelling out up to $18 for one image-rich download.
Small wonder that during the past three years, while SMS messaging has continued to grow, data traffic, despite the huge opportunities open to it, has been static. It is not often you find an industry suffocating its own success at birth, but that it what most cellphone operators are doing. – Guardian Unlimited Â