The world is in your palm.  Laptops have become passé, as smartphones are the lightweight champions of the world.
Smartphones went mostly unnoticed until Apple's iPhone was launched in 2007. Suddenly, everyone wanted a smartphone. The iPhone embodies the dreams of its consumers: responsive high-resolution touch screens, apps and games, and most importantly, instant web access on the go. It ushered in the era of 3G mobile services, with smartphones making the most of fast internet access. Converging technologies and services have propelled each other since. Google and Microsoft are making huge investments in the sector.

Nepal was lauded as the first in South Asia to offer 3G services, back in 2007, but progress has since been slow. Nepal Telecom has only 2,100 3G clients, all within the Kathmandu Valley. 

"3G hasn't really caught on here as the network coverage was limited, and the rates were considered expensive," says Kabindra Shrestha at the Nepal Telecommunication Authority (NTA).  "A lot of improvements have to be made to the basic infrastructure so it can meet consumer' needs."

But 3G is showing signs of a revival, with subscriber numbers tripling since February in response to more competitive rates and better coverage. Pokhara is undergoing tests for 3G coverage. With NCell poised to enter the 3G market soon, speculation is rife about competition benefiting subscribers. A boost in 3G subscription is likely to complement the smartphone market, too.

Smartphone sales are already gaining momentum. "More Nepalis are switching from basic handsets to smartphones," says Mansur Khamidov, chief commercial officer of NCell. People from all walks of life have found their personal equilibrium in the use of smartphones .

Alas, the industry is under attack from a threat close to home. Sales of imitation smartphones, mainly from China, are stealing a large portion of the market share. NTA's Shrestha estimates that roughly 30 per cent of smartphone users have Chinese imitations with near-identical forms and functions. "Without regulation, copies will continue to be popular with Nepalis, especially the low and middle income groups," says Shrestha.

NTA is currently looking into ways to curb piracy, and is assessing the Equipment Identity Register (EIR) that assigns unique International Mobile Equipment Identities (IMEI) to each branded phone and bars calls to or from pirated models. "As it is relatively easy to clone the IMEI, there are still doubts about its reliability," says NTA's Arjun Ghimire. India recently required mobile users to register their IMEI numbers, shutting out 20 million imitation phones.

For now, distributors and retailers can only voice their frustration. "It's not fair," says Ramesh Shrestha, a general manager of the electronics division of Chaudhary Group, a distributor of LG phones. "While companies like us are paying duties and taxes, these pirates get away with it," he says.

It may be time to connect with the industry players again.

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Smartphone smarts - FROM ISSUE #499 (23 APRIL 2010 - 29 APRIL 2010)