TI exec: Emerging markets set the stage for the ‘next billion’

DALLAS-The next paradigm shift in the mobile handset market is enabling mobile multimedia for the masses in emerging markets, a massive opportunity about to materialize, according to Remi El-Ouazzane, worldwide director for Texas Instruments Inc.’s 2.5G technologies. And a “collision” of developments in high-end smart phones and low-cost handsets will drive innovation to achieve this, principally through single-chip solutions for both ends of the market that reduce the necessary cost, power draw and space requirements.
Although the concepts are nothing earth-shattering, the details provided by El-Ouazzane paint a more granular picture of the nature of emerging markets and the mobile industry’s opportunities therein, at least in GSM.
While voice remains the application of choice for the majority of mobile subscribers in emerging markets, the growing middle class in India, for example, seeks status and functionality in wireless handsets, El-Ouazzane told listeners in a TI Webinar today.
That means multimedia uptake will grow. In India, as in emerging markets elsewhere, many subscribers will listen to their first recorded music in an MP3 format on a mobile phone; indeed, music is the leading data-based application after voice, El-Ouazzane said. Sought-after non-voice applications are often market-specific; in India they include movie-based ringtones and wallpaper.
With penetration rates in emerging markets still relatively low-less than 10 percent in India, 20 percent in Latin America and perhaps 30 percent in China-rapid growth will fuel the proverbial “next billion” mobile subscribers globally, while broadening the installed base for a wave of replacement handset business to follow.
Roughly 60 percent of mobile phones sold in these markets will come from multi-national corporations and 40 percent from domestic vendors, according to TI. The governments of emerging markets are looking at reducing import taxes to spur market growth, El-Ouazzane said.
For Texas Instruments, much of the current innovation to meet this demand will be in GSM, GPRS and EDGE, as 3G will slowly roll out in emerging markets beginning next year. Uptake of 3G will be slow as a large proportion of the “next billion” typically earn between $5 and $20 per month and higher-end devices and data-intensive services are likely to remain beyond their financial reach, El-Ouazzane said.