Imagine a smartphone. This one knows where you are, what you’re looking at and what you like and don’t like. It can suggest where to have dinner or list the best shopping venues around simply by pointing it at a street. Actually, it’s just like a portable mini-computer with superior sound, video, graphics and GPS.
Offering a sneak peak into the future, Jay Srage, president of MEA and SEA at Qualcomm, the world’s largest supplier of chips for smartphones, believes the devices will evolve into even smarter gadgets that connect users to their environment like never before.
“It should know what you like and what’s around you, and it makes the bridge between that,” says Srage. “We are forecasting that 3 billion smartphones are going to ship in 2015, so the growth of the smartphones market is still going to be double-digit over the next five years.
This is good news for Qualcomm, whose technology is integrated in almost every smartphone manufactured today. In addition to owning the rights to the technology around 3G, which forms the basis for most smartphones, the company was the first to enable internet and data access on mobile phones. It is also the world’s top provider of chips used in LTE, or long-term evolution, wireless connections, an area that Gulf Arab countries, namely the UAE and Saudi Arabia, have been investing in heavily over the past few years. LTE, also referred to as 4G, increases upload and download times for mobile users by around four times, when compared to 3G networks.
From 2000 and 2005, the global market for smartphones grew rapidly. In the years that followed, the Middle East region emerged as the next growth frontier, after installing the first 3G network and driving demand for mobile data. Seeing this uptake, Srage took to setting up a regional office in Dubai in mid-2008, just as the global financial crisis unravelled.
“It was very challenging because companies were going through drastic measures to save costs and we were here starting a new office, but we manoeuvered through that crisis quite well,” said Srage. “When the crisis passed we were part of the regional ecosystem in the Middle East and Africa.”
Now, after the technology company merged its Middle East, Africa and Southeast Asia operations, it is part of Srage’s job to support regional telecoms operators in building their own phone brands – a trend that is gaining momentum with the number of new products coming to market growing.
Dubai-based mobile phone retailer Axiom has developed the Bee phone series, while MTN in Africa and Etisalat in Egypt launched their own brands. Qualcomm, whose regional partners include Mobily, Etisalat, du, Mobinil, MTN and Airtel, provides companies with a reference design that uses its technology and puts them in touch with an original design manufacturer (ODM) in China to build a new customised product.
“That makes it very easy for a new up and coming company to launch its own brand in the market,” Srage says. “Our ultimate goal is to establish device manufacturers and designers in the region, but that doesn’t happen in one step.”
Qualcomm also provides engineering services to telecoms operators in the region and helps them set up their infrastructure to handle new technologies such as LTE. “You can have the best smartphone, but if you don’t have the right network, the user experience is not going to work,” he explains.
“We also work with network operators on the roadmap – on what new technology will come next. Being a technology provider, we typically design what is going to launch two years in advance so we are the crystal ball for the operators,” Srage says.
Srage is not ready to reveal what the next big thing in the world of smartphones will be, but he shares a rosy outlook on the region. Despite reaching a saturation level of 70 percent, the market is still growing.
“The Middle East has been very positive” over the past few years, as infrastructure was developed, enabling new innovations to come to the market and creating demand, Srage explains.
“We have seen 35 to 40 percent growth over the last five years in total market volume and we now see it growing at 25 to 30 percent over the next two to three years. That is quite healthy growth based on the saturation level we have reached.”
This year, the company forecasts in excess of 30 million units of smartphones to be sold in the Middle East, predominantly in the Gulf states. This figure compares with major emerging countries such as Brazil, making the region one of the most competitive markets for suppliers.
Unlike Africa, the Middle East is considered a high-end market for smartphones, with more than 80 percent of devices sold at above $100. To Qualcomm’s benefit, the region’s young and generally wealthy population and social norms have resulted in strong demand for the gadgets that have become a way of life for many.
“We don’t want to push the market below $100 because people can afford those devices. They want to experiment, especially in Saudi Arabia where everything creates momentum and the download of YouTube videos on mobile phones is the highest in the world, averaging some 100 million videos per day. It’s a unique ecosystem where you don’t have movie theatres so social media becomes the main outlet,” Srage says.
Qualcomm already powers some of the most popular smartphones globally, including the HTC One, Samsung Galaxy S4 and Nokia Lumia. However, as customers become more discerning, there is never a limit to improvements in speed and quality. The company recently announced its latest processor, Snapdragon 800, which is 75 percent faster than its predecessor and can “take entertainment to the next level”, as Srage puts it.
“For example, Samsung and LG launched TVs that are ultra HD 84 inch. That same capability is available on this chip,” he explains. “It’s your theatre on the move” and can run audio sound similar to “a theatre experience that you can take with you on the plane or home.”
The chip also enables gaming with a similar, or better, quality than on a console, Xbox or PlayStation. It includes all connectivity features such as Wi-Fi and GPS and allows developers to build different applications.
In this context, Srage is also focusing on helping developers build local applications for mobiles and assisting them in commercializing viable ideas. Over the past six months, the company reached out to some 1,000 developers in the region.
As we enter an era where new innovations aimed at increasing connectivity crop up almost daily, Qualcomm aims to stay on top of its game. The company has been supporting research and development around some of today’s most-talked about innovations such as Google Glass and Apple’s iWatch, according to Srage. Google Glass resembles a pair of optical glasses that can function as a smartphone and is currently in the testing phase.
When asked whether the introduction of such innovations will negatively impact the smartphones market, Srage disagrees.
“These devices help communicate with your surroundings not with people so they won’t replace a smartphone,” he says. “The accessibility to the Internet and the need for consumers to access it through different devices is leading to the creation to what we call the internet of Everything.”
In future, technology will not only enable people to communicate will other people, but will increasingly help the interaction between people and machines and between machines and other machines, he concludes.
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