Business

Analysis: Smartphones for
a smarter people

What a difference a year can make. Especially in the handset business. With new technology leading the transformation, change is coming to us at warp-speed. Before you know it, new is old.

Just five years ago, only 25 percent of all Indonesians 14 years of age and over had a mobile phone. They were all dumb phones, or feature phones as they are politely called. Now, over 80 percent has a handset and the smartphone-set among that big and still-growing universe already hit 26 percent. In fact, of all the handsets bought in the last 12 months, 35 percent were smartphones. The double-digit growth of smartphone users we are now witnessing every 90 days means more than 50 percent of the population will have gone “smart” in less than five years.

That trajectory could have a much steeper rate of climb if competition drives the price of smartphones down significantly. Predictably, the big cities are leading the way into this smarter world. Greater Jakarta or Jabotabek as it is affectionately called, currently contributes 42 percent of all converts. But that will change as new takers emerge from other cities and towns in Java and beyond. The race is on, in all five major islands.

The changing landscape is taking its toll too in this extremely competitive business. For almost a decade, Nokia ruled the international market as the unchallenged leader. Today, Samsung has raced to the top globally and Apple is the rage particularly in the Western world. With web-entrepreneurs responding to handset development with equal gusto, there’s very little you can’t do with that gadget in your pocket. I have a Samsung Note and I am discovering new features every day. What next? I feel sorry for the big Mac sitting on my desk at home, its days are numbered. The big plasma screen I bought just two years ago is already a dinosaur. They should be putting “use by” dates on all new gadgets so we have a better understanding of shelf-life.

With over 50 million users and growing by about 3 million new entrants each week, Indonesia is currently Facebook country No. 4 in the world, after the United States, Brazil and India. Nothing like a good chat and Indonesians are second to none. As the apps get better in industry after industry, old habits and traditional ways of doing things will change even more rapidly. Banking and bill payment are already at the tip of our fingers.

Airline and hotel reservations, street directions to security applications, nothing is beyond imagination. That day has dawned. If we can imagine it today, it can become a reality tomorrow.

While Indonesians are among the early adapters of the digital universe, a key issue for the country’s economic future is being overlooked. Indonesians are taking to new developments quickly, but they are not making those developments happen. Not nearly enough, not quickly enough. A leisurely trawl through Indonesian ecommerce websites will reveal the true state of affairs.

There is nothing resembling a commodities exchange, very little that is useful in the realms of agriculture, science or medicine. Even retail looks like its still stuck in the 20th century. There is some gloss, some glitz, but very little to be really proud of. We would all struggle to name an Indonesian website that is making a major contribution to society in any tangible way. Nothing really noteworthy, outside of news and gossip.

 By itself, access and exposure to the digital world and all its wonders are good stimulants for young Indonesians. Emulation of the world’s best and brightest will foster new entrepreneurs. Leaving the young to find their own way forward is one way to look at Indonesia’s digital future. Surely, there are others. Any thoughts on encouraging, fostering and incentivising a whole new generation of e-entrepreneurs would be a worthwhile contribution to Indonesia’s future. We need to recognise the fact that quality education is available to a tiny fraction of society. Education helps ignite imagination. The economic future is going to be increasingly influenced by the worldwide web. Without imagination, technology alone cannot shape tomorrow.

Anybody who believes that the United States of America is in economic decline needs to take a reality check. Who are the giants of today’s digital universe? Google, Facebook, eBay, Amazon to name but a few are all American-owned. There are hundreds more, many thousands still in the pipeline. On a different scale but punching way beyond its size is the tiny nation of Israel. Unsung, rarely heard of, its “Silicon Wadi” is designing new chips for the likes of Intel, setting up web-based security systems, as well as parts for our handsets. If the first step is to recognize the problem the second is to talk about it. If an industry seminar is what it takes, will the leaders of the nation’s telecom sector please stand up?

My opinions are influenced by Roy Morgan Single Source, the country’s largest syndicated survey. More than 26,000 respondents are interviewed every year. Every quarter, the data is projected to reflect 87 percent of the population 14 years of age and over.

The writer can be contacted at debnath.guharoy@roymorgan.com

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