Smartphones get smarter

With smartphone devices greatly outnumbering sales of personal computers, are we on the cusp of a paradigm shift?

Rajiv Rao Delhi 

Perhaps no book or movie so cannily predicted the future as much as Arthur C Clarke’s 2001: A Space Odyssey, brought memorably to cinematic life by Stanley Kubrick. The film is neatly bookended by the dawn of two seminal eras. The first, in the opening, happens when our charming Neanderthal ancestors discover the facility of large, heavy bones that they use to bludgeon their way to dominance. The second, in the end, is when a creepy computer named HAL onboard the space station develops its own intelligence and takes over humans.

It is too early to say whether or not we are on our way to becoming slaves of automatons, but what Clarke and Kubrick did so effectively was to presage the future of the machine—especially one with computing powers. Somewhere, the duo, both of whom are dead, is no doubt secretly smiling down upon the cusp of another transformation—the rise of the smartphone and the death of the PC. For the fact is, HAL, the supercomputer with remarkable processing power decades ago, is now neatly tucked into your pocket and has already taken over your life.

No other country is caught so squarely in the vortex of this change as India.

For the first time since the advent of the mobile phone in the country around 15 years ago, sales of feature phones—primarily responsible for igniting the cellphone revolution here—fell by 0.8 per cent to 51.8 million units in the quarter ending September 2013. The cause for this slump? India’s seemingly insatiable appetite for smartphones—defined as mobiles with their own Operating Systems (OS) that can download applications (or ‘apps’), which make them, by and large, identical to computers.

Death of the PC

Which is why the PC is officially now a has-been. According to technology research firm IDC, out of a forecasted 1.7 billion units to be shipped in 2014, more than 1.4 billion units are expected to be smartphones and tablets, which rack up more than $500 billion in value. On the other hand, only 300 million PCs are expected to ship with a value of less than $200 billion. This fall is only going to get steeper as time goes by.

The reason for this tectonic shift in power is simple. Smartphones are increasingly doing as many, if not more things, faster, cheaper and more efficiently and ergonomically than traditional computers. And a country like India—which hasn’t officially experienced a PC revolution, unlike China—is poised to eschew the PC and migrate directly to mobiles, further propelling this trend.

The numbers speak for themselves. Smartphone sales in India skyrocketed by 152.3 per cent to 11.1 million units at the end of the June-September quarter, and now make up 17.6% of the total cellphone sales, according to a report by Cyber Media Research (CMR), The country is currently the third fastest growing smartphone market in the world.

India’s bypassing of the PC era is also being given some jetfuel by the wildly popular ‘Phablet’— a tablet-smartphone hybrid with a screen size between 5 and 6.9 inches, which, according to some reports, has already cornered 30 per cent of total shipments in India.

Next gen drivers

There is a simple explanation for the kind of sizzling smartphone growth happening in India. Smartphones allow you to listen to music, consume videos (voraciously, as is the case in India) while on the move, play games, take pictures, and message your friends with manic frequency. Of the 51 million smartphone users in urban India today—a spike of 89% from 2012—the biggest increase is in the youngest age-group, between 16 and 18 years, according to a recent study. In 2012, 5% of smartphone users were from this group. Today, that has gone up to 22%.

A recent 2012-2013 study by software consultancy TCS offers unique insight into this group. The survey of nearly 17,500 high school students of ages 12-18, across 14 Indian cities revealed that nearly 70 percent of Indian students own a smartphone, with a larger user base in smaller cities than metros. Nearly 20 per cent of this group uses mobile phones to access the Internet (compared to 12 per cent in 2009. Nearly three out of four students cited “Research for School” as the main reason to access the Internet followed by social reasons like chatting/connecting with friends).

This cohort is using the Internet for work and play like never before. That’s why the largest and most lucrative segment for mobile phone makers is not in the premium category, but in the low-priced ones – below $200 (Rs 12,000). Phones in this category comprised over two-thirds of the sales in the country.

Here today, gone tomorrow

The appetite for smartphones has caused a tumult in the manufacturing world. Companies have begun desperately jockeying for positions to tap into this unprecedented opportunity. Yet, possibly no other industry has proven to be so volatile as the shifting sands of technology here can bury one player while crowning another king. Yet, the new leader is more than aware that this crown is ephemeral, and any easing off on any of the levers that lead to supremacy—product design, marketing or distribution—will result in a trip to the cell phone graveyard.

This story is from the print issue of Hardnews: DECEMBER 2013