Benefits of a Smartphone

According to a recent International Telecommunications Union (ITU) report, Kenya mobile telephony industry now accounts for 7% of mobile phone subscribers in sub-Saharan Africa. Kenya had 17.4 million mobile phone subscribers by end of June 2009, translating to 45.7% penetration. The report also indicates that Kenya has the third highest number of subscribers, after Nigeria and South Africa that respectively account for 26% and 19% of mobile cellular subscriptions in sub-Saharan Africa. This presents an apt environment to market value added services that run on mobile phone devices, the evidence being the introduction of money transfers, short codes, news alerts, SMS voting and other services introduced by various service providers in Kenya. However, a field that is lagging behind in the market is the deployment of services that run on high-end mobile devices, also know as smart phones. Despite the fact that they are pricy, the value proposition of smart phones way surpasses its price tag. Which begs the question; what are smart phones and what can they do for different market segments?

Generally, a smartphone is a mobile phone offering advanced capabilities, often with PC-like functionality (PC-mobile handset convergence). In other words, it is a miniature computer that runs on an Operating System (OS) and has phone capability. Operating systems that can be found on smartphones include Symbian OS, iPhone OS, Palm WebOS, BlackBerry OS, Samsung bada, Windows Mobile, Android and Maemo. WebOS, Android and Maemo are built on top of Linux, and the iPhone OS is derived from the BSD and NeXTSTEP operating systems, which all are related to Unix. The first smartphone was designed by IBM in 1992 and released to the market by 1993. The phone had integrated the functions of a mobile phone, calendar, address book, world clock, calculator, note pad, e-mail, send and receive fax, and games. This was a phenomenon in the mobile telephony industry, moving from individual devices for various functions to a single multifunctional high speed and robust device. It had no physical buttons but rather a touch-screen to select phone numbers with a finger or create facsimiles and memos with an optional stylus. A pop up keyboard would appear when the user wanted to type a message. By the year 2002, various mobile phone manufacturers had released their versions of smartphones, utilizing a full keyboard that combined wireless web browsing, email, calendar and contact organizer, with mobile third-party applications that could be downloaded or synced with a computer.

The essence of the smart phone is that it’s a versatile business tool, a phone having the latest business apps - mobile email, salesforce automation and supply chain management, for instance - and the ability for those apps to sync with the software at corporate intranet. It takes advantage of the skills, energy and innovation of numerous companies from a vast range of industries - means that smart phones extend the phenomenal track record of mobile phones by improving constantly and rapidly, year by year. Distinguishing most smart phones from a feature phone are their open operating systems and the ability to freely add and remove applications. Consider a scenario of a company with a distribution or collection chain, for example the Kenya Co-operative Creameries for collection or the East African Breweries Limited for distribution. Traditionally, a Point-of-Sale system (comprising of a computer installed with enterprise software - mostly proprietary software) and a local loop link to the head office or an Internet connection will be installed. This setup requires complex Wide Area Network (WAN) designs, a Service provider with national coverage, IT support staff at depots and expensive hardware like routers, wireless transceivers and satellite dishes.

In comparison to the traditional setup, provision of a smartphone to the depot manager at a remote location would serve the same purpose. The smartphone can run enterprise software and connect securely to the database at the head office for record entries. If the records are bulky or may require more than one person for entry, one or more computers can be used during business hours. At the close of business, the computers can be synchronized with the smartphone and the data sent to the head office. For some workers a smartphone may address all their communications, connectivity and applications requirements. At the scarcely populated such as North Eastern Kenya, one user can visit several depots and record the summary entries from the day’s sales or collection. In terms of infrastructure, all the user needs is national cell phone network coverage, which is available in Kenya at the moment. The smartphone can be configured and tested by an IT expert at the head office and sent to the user. This setup is not only for Cooperate companies, with the advent of e-banking, e-commerce, e-money transfer and so on, it can also be used by Small Scale Enterprises (SMEs) who wish to trade on-line and use applications such as worksheets to store business records. Additional functions important to a business person include; personal organisers, electronic diaries, contact lists, and automatic reminders. On some platforms such as 3G, smartphones can be used for video conferencing and document sharing.

The most fundamental challenge for using smartphones is security. A key danger with is that users do not bother to enter a password when using the phone. Smartphones should not be given access to company networks without extra security, even though the phones are individually owned by users. Smart phones are conspicuous and have become "easy pickings" for any opportunists trying to steal them or access information. They can also be accessed and synced by hackers on public networks, such as Wifi networks in a coffee shop, if proper security measures are not put in place. The other important challenge for smartphones is to show the market how their can provide a superior return on investment. Decision makers in cooperate companies may view a smartphone as a pricy fashionable device and not a business tool. IT managers need to convince them that smart phones are indispensable rather than indulgent. Possibly look at them as price-competitive replacements for laptops. Manufacturers may need to argue the case for their products not just with operators, but also the end users. Manufacturers should work closely with operators to create easy-to-use services based on specific functionality that users’ value.

Mobile operators in Kenya should increase smartphone discounts to improve their profit margins. Operators need data traffic growth to offset declining margins for voice and SMS services, bearing in mind that smart phones generate over 25 percent of mobile data traffic. They should work with handset makers to ensure that feature phones do not compromise data usage and probably customize the applications to the local market. The high price of smartphones, relative to average selling prices (ASPs), mean that many contracts for higher end phones are based on 18-month periods or longer. This makes them unaffordable to the majority of the population. Operators may take a different approach and stimulate the uptake of these devices, especially in the SME market.