Mobile phones play vital role in developing world
Growing nascent markets are growing in part with the rising number of mobile phone subscriptions.
Research shows that greater cell phone use can drive economic growth in emerging economies. Based on market research in China, India and the Philippines, consulting firm McKinsey & Co. found that raising wireless penetration by 10 percentage points can lead to an increase in gross domestic product of about 0.5 percent, or around $12 billion for an economy the size of China.
These emerging countries have leapfrogged ahead in technology. The key here is they are not handicapped by an existing legacy infrastructure (fixed wire-line phone) to hang on to. Mobile phones are the primary choice of communications just as they fulfilled, "much the same role as fixed-line phone networks did in facilitating growth in the United States and Europe after World War II."
The jumping out in front does not end there, the mobile phone can become the means for millions of users to have access to financial services. Particularly for those who have no bank accounts and transferring money can be difficult.
- The Phillipines has become a leader in mobile commerce using e-wallets for banking transactions even though subscribers are not required to have a bank account
- Wizzit, a South African-based company has been offering mobile phone-based financial services since 2005
- Vodafone with Kenyan affiliate Safaricom and partner Commercial Bank of Africa will be launching M-Pesa, a mobile-based financial service that enables users to send/receive cash and perform other transactions
The wireless penetration is being driven mostly by the GSM wireless standard. In comparison to Qualcomm’s CDMA, it is costlier in terms of deploying network infrastructure, however the mobile phones are cheaper. A GSM mobile with a below-$30 price point can be achieved with the lower bill of materials — all of this thanks to a heterogeneous pack of component makers and suppliers. Expect to see this trend continue: ultra-low cost phones will be led by Nokia and Motorola.
It’ll be far reaching for CDMA to follow suit; Qualcomm is anti-competitive and strong-arms its customers (network and terminal makers) with high-cost and excessive royalty terms. Qualcomm does have an answer to all the qualms surrounding these markets. Its CDMA 450MHz is a great match which offers greater coverage area than GSM, offers low-cost network deployment and low tariffs. The sticking point is relative high price point for the phones. But the biggest obstacle is the stigma surrounding the CDMA 450MHz image. With exception to LG Electronics, none of the other global players have entered this niche market. There have been rumors that Samsung would enter, but these are unsubstantiated. Anyway, without major brands the existing complacent brands (Kyocera, Zakang, Ubiquam) are not raising the bar on product integrity/quality or user experience. Thus what you have is a poorly designed or engineered product. The U-520 was developed with the sole purpose of knocking the status quo (more on this later). Users from the developing markets may not have the fiscal capacity to buy a $300 smart phone, but they are consumers who aspire for economic mobility and a product that reflects their aspirational status. In understanding their behavior, its only agreeable they select a GSM mobile. Particularly coming from global brands such as Nokia or Motorola. Why settle for a cheap-feeling phone when you can get a cheaper phone with great design and engineering?
Just as I mentioned before, developing countries are afforded to advance in technology as they are not legacy-dependent. Look to seeing dual mode GSM and WiFi, or standalone WiFi making a splash for the mobile or fixed-wireless (WLL). Other variations in the near future could have WiMax/WiBro playing into the fold. It’s high tide for these markets: more technology choices and options will increase the coverage area and lower the tariffs all around.
The conceptual U-520 product design was promising until wrecked because a couple of the key design elements were perceived to be, "too weird", by the project manager. Thus what you have is a navigation keypad and front ear speaker conveniently ripped off from Sony Ericsson.
Link: Cell phones play vital role in developing world - CNN.com.
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