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      Volume 9 Issue 50| December 31, 2010 |

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Wired and Connected

Smartphones have transformed people's lives in Asia in a dramatic fashion


By February 2012, Singaporeans will not have to necessarily carry cash or credit cards while going for grocery shopping or taking the subways. They just have to tap their cell phones on sensors and payments will be automatically made.

This new payment system based on the wireless standard known as near field communication (NFC) is going to be rolled out with the help of telecom companies and financial institutions. The government has already requested for proposals from interested parties to create and manage the communication infrastructure that all banks, transport operators and other service providers can use to deliver services.

Singapore had first tried to introduce mobile payment system as early as 2003. At that time it had tried to use cellphones as a device to make payments at parking bays. But the service could not be launched commercially, as the entire process was not efficient: users had to get a personal identification number from their bank, an SMS code, or call a certain telephone number for transactions to be approved.

Then in 2007, tests were conducted to use mobile phones to pay for food bills and train rides. Again, the services received lukewarm response because users and service providers on different payment platforms could not transact with each other.

There was another big problem as well. A very big one indeed: shortage of mobile handsets that supported contactless payment. Now, with the rise of smartphones, which have the ability to perform various tasks, this problem is going to be solved as well.

Google, Nokia, Samsung and reportedly Apple are rolling out new models of their smartphones with built-in NFC capabilities. This will make smartphones even smarter while making people's lives easier.

Smartphones have transformed people's lives in a dramatic fashion over the years. Nowadays, you don't need to sit in front of these desktop computers or even laptop–which have suddenly started looking huge and ugly to some people–to browse the Internet or manage personal and office documents. All you need to do is take the little gadget out of your pocket and do almost anything–from tracking stock market trends and playing online games to reading news or updating Facebook status–on the move. These conveniences are helping smartphones outsmart PCs.

A 2009 report by RBC Capital Markets has predicted smartphone sales to surpass worldwide PC sales by the end of 2011, with shipments of both approaching 400 million a year.

Market research firm IDC's latest report shows total smartphone sales of around 81.1 million units worldwide in the third quarter of this year alone, which accounts for close to 20 per cent of global cell phone sales. This rise in smartphone sales represents a increment of almost 90 per cent from last year.

This, many analysts say, is largely because of soaring demand for smartphones in Asia, which is expected to become the largest region for smartphones shipment in the world by 2012. Canalys consultancy estimates that smartphones will account for around 22 per cent of the overall mobile phone market in Asia by 2012 from around 11 per cent in 2009.

Developed Asian countries like Singapore have already reported smartphone penetration of 40 per cent compared to around 27 per cent in the US (as of June) and 23 per cent globally. In South Korea, around 4,000 people sign deals to purchase Apple's iPhones every day. And in other markets like Thailand, smartphones are expected to account for 50 per cent of the total mobile phone sales by 2012.

The proliferation of smartphones is increasing people's access to the Internet, especially in countries where penetration of fixed broadband lines is low. Take Indonesia for instance, where Twitter usage has skyrocketed.

It is said around nine million people in the country have that micro-blog account and one in five Internet users there uses Twitter. This puts Indonesia just behind the United States–and ahead of many developed countries–in terms of sheer user numbers.

It's the same in the Philippines. The country now has three million Twitter users, making it fourth largest country in Asia in terms of people using Twitter. And in Facebook usage, the country moved to sixth position from the seventh in the span of last three months alone.

Now suddenly, the appetite for mobile games and application has also increased in Asia due to rise in the popularity of smartphones. Nowadays, 51 per cent of Chinese phone users download games or applications on their mobile phones. That's 29 per cent more than what the Western Europeans do.

Nielsen has said that China, along with Indonesia and the Philippines, are the world's top three markets for mobile video consumption. People in these countries watch more than three times as much video as mobile phone users in the US and Europe. Singapore falls in fifth position. And Viet Nam and Thailand are both on top 10 list.

Because of growth in data usage on the phone, Asia-Pacific is likely to consume 36 per cent of monthly global mobile data traffic by 2014, up from virtually nothing in 2009, according to Cisco.

By now you must be thinking Asians are using smartphones only for the purpose of entertainment. But hold on. Last November, South Korea's top steelmaker, POSCO, distributed 1,200 smartphones to employees serving in sales and customer support departments to implement the new mobile office system.

This allowed employees to use their mobile phones to carry out activities like processing shipping orders or checking shipping costs and other orders, even whey they were away from their offices.

A survey conducted by Samsung Economic Research Institute showed that 8 out of 10 CEOs now believe the business environment will gradually shift to virtual office environment in three years as it provides flexible working conditions to employees and remote access to corporate data and other services. This will increase the market size of mobile office systems in South Korea to $5.28 billion by 2014 from $2.5 billion last year. Isn't that smart?



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