It is clear that the mobile market is no longer dictated by the leading-edge devices. The growth of handset sales in less developed countries has meant that manufacturers need to look at their lower priced models and see how they can differentiate them from the competition while still being to sell them at affordable prices to the huge potential markets that countries like India, China, and Indonesia offer. This sector has now reached a level of maturity that it isn't simply about the technology, but also about what you can get for your budget.A second trend is the growing importance of GPRS and EDGE mobile-phone markets. Between now and 2010, experts believe this market will remain the world's largest. All expectations in the development of 3G mobile solutions are real, but the number of handsets sold and the life-span of the GPRS and EDGE markets mean such solutions will remain extremely large and important for the next four years at least.Another evolution is the integration of Wi-Fi or Wi-MAX capabilities into mobiles. This market is becoming increasingly attractive because such phones can transfer data at rates up to 10 times faster than those of 3G phones and can do so in a far more cost-effective manner.

Getting more for your R&D money

The vital role that design-application engineers will play as these market dynamics unfold will centre on making chips that are the most efficient and economical at handling the various voice, data, and video services pumped through the next generations of mobile phones. Engineers will continue their pursuit of integrating different chip technologies when it makes sense, but won't integrate just for the sake of integrating. These kinds of decisions will be based on the amount of benefit gained from integration versus the cost of doing so. For example, a key integration issue in mobile-phone design now is whether or not to integrate the applications and communications processor onto a single chip. In many cases, there are actually more benefits to be gained from not doing so because leaving these processors as separate chips frees them up to specialise in handling certain types of traffic or applications without having to tax and sacrifice their horsepower. It is a matter of keeping these functions doing what they do best without overburdening them with additional tasks that they can't handle and without compromising overall processing performance. The same holds true for the other extreme. Under-use of systems may result in unnecessary reduction of battery lifetime because of a design that is too power-hungry.A key part of future mobile-phone designs will be the stability and robustness of protocol-stack software, and how the latter integrates and coexists with the silicon. The truth is that the software inside a mobile phone is very much the brains of the system, and it has to be able to handle upgrades in features and standards as seamlessly as possible. This means that as more 3G phones enter the market, the mobiles that have versatile 2.5G software will be more attractive to use. It won't be efficient or economical to write entirely new software-code programs for 3G. The ideal will be to use as much of the 2.5G mobile code as possible as this wilill save time and money in bringing the 3G phone to market.

Emerging markets

For the past five years or so, it has become increasingly apparent that China is a huge mobile-phone-market opportunity. But during the last eighteen months, India has also emerged as a promising market. This is because of India's huge population and its lack of wire-line infrastructure, which makes it more economically and logistically appealing to just go straight to wireless technology.The key issue to understand about emerging markets is that they are primarily going to want low-cost, entry-level mobile phones with as many features as can be included without boosting the price outside the range customers can afford. That generally means mobile phones priced in the 20- to 30-Euro range. To put this in perspective, the average price of a mobile phone in the West in 2006 was in the 120- to 170-Euro range.These mobiles for emerging markets will be initially 2G and 2.5G devices that adhere to the GPRS and EDGE standards. There won't be a strong demand for 3G phones for a while in these regions because these devices would cost too much for the average customer.In summary, the evolution of the mobile-phone market is taking several important twists and turns, with phones combining Wi-Fi or Wi-MAX with traditional mobile technology being among the most provocative and potentially market-changing. The reason for this is that these handsets are becoming increasingly attractive, competing with 3G solutions in data rate and cost-effectiveness. A few years ago such a dynamic would not have been possible, but that's the nature of the mobile business these days. Until quite recently the low-cost, entry-level mobile market using GPRS technology would not have seemed as attractive as it does now. One reason is because these sorts of markets are going to remain large for much longer than was forecasted three or five years ago, when the belief was generally that 3G would by now be a much greater part of the overall market.