3GSM marks a move to cheap tech

2/20/2007 12:00 AM EST

This year's 3GSM World Congress is over. As the dust settles, it's clear that the show marked an important turning point in the wireless industry. As usual, the show featured flashy announcements of from the likes of Texas Instruments and Broadcom. However, the industry is no longer focused on high-end technologies that drive up average revenue per user (ARPU). Instead, industry leaders agree that the industry can only grow by adding huge numbers of low-revenue subscribers in emerging markets.

The reasons for this shift are obvious. Existing subscribers in developed markets don't have compelling reasons to increase their spending. Consider the current hot technology, mobile TV. Consumer interest in this technology is lukewarm at best, so carriers can't count on it for a revenue boost. (See my previous blog for more on mobile TV.)

Thus, it's clear that the wireless industry is now driven by cost-cutting, not by cutting-edge features. Not that tomorrow's phones won't be high-tech: Just look at the Chinese market, where sales of low-tech PHS phones are rapidly cooling. It won't be long before this market is taken over by cheap 3G phones.

The moral of the story? Designers must keep pushing technology forward, but cut costs at the same time. It's a tough challenge, but one that must be met in the new wireless world.