Collaboration key for handset sector

The boss of chipset manufacturer Qualcomm's Middle East and North Africa division has called for the mobile handset industry to pull together and use this year's GITEX Technology Week to take advantage of a rise in spending on mobile devices in the UAE.

The handset industry has suffered as a result of the global economic crisis, with manufacturers issuing profit warnings amid declining shipments of devices.

Qualcomm's Vice President for the Middle East and North Africa, Jay Srage, comments: "On average, since April, spending in the UAE across all segments of the handset market has increased by about 5-7%, and we need to take advantage of that increased spending among consumers."

Srage also warns that if new products and innovative designs and routes to market are not introduced spending could tail off.

He points to the low-cost own-brand device launched by Etisalat earlier this week at GITEX Technology Week as an example of an innovative way to tap into consumer demand.

"We would like to see the same in mid-range handsets and smartphones. But as you move up the chain, it is less about price and more about features, such as instant messaging, easy access to social networking sites like Facebook and mobile broadband bundles," he says.

With handset manufacturers, distributors, retailers and consumers in attendance at this year's GITEX could provide the perfect opportunity for important players to stimulate the market.

"It's an opportunity to get the ecosystem working together again to deliver to customers," says Srage.

One of the most positive developments in the handset industry over the past 18-months has been the boom in sales of smartphones, which Srage defines as devices that use a high-end operating system.

"We are adjusting the roadmap to reflect the increased smartphone penetration and decrease in the mid-range, which is being squeezed by growth in sales of smartphones and of ultra low-end devices," the Qualcomm MENA boss says.

According to Qualcomm, of all handsets sold in the Middle East and North Africa region, 15% are smartphones, with the UAE and Kingdom of Saudi Arabia among the countries with the highest smartphone penetration.

The average penetration of smartphones in the region is 15%, with high-income countries averaging 25% and lower income countries in the region averaging 5%. Among higher spending countries over the next year this is expected to rise to 30-33%, while the lower end will increase to 8-10%.

Two factors are expected to influence the adoption of smartphones in the region, one of which is the roll-out of 3G networks, which Srage says dominates the smartphone market.

The second factor is services, with operators pushing more advanced solutions in the realm of media, such as video and music downloads, and location-based services.

US-based Qualcomm plays a central role in the rapid adoption and growth of 3G and next-generation wireless services around the world. The company's current intellectual property portfolio includes more than 10,100 United States patents for wireless technologies, with more than 165 telecommunications equipment manufacturers licensing them worldwide.

The company is exhibiting as part of the Dubai Internet City pavilion, and is meeting with key industry partners at GITEX Technology Week.