At this month's 3GSM World Congress in Barcelona, Spain, cellular phone manufacturers displayed their latest wireless wares, ranging from high-end music-enabled wireless 3G handsets and smart phones that are designed to appeal to sophisticated users in developed countries to ultralow-cost handsets (ULCHs) that are targeted at low-income users in the developing world. The phone manufacturers and service providers are aiming to maintain growth in mobile phone hardware and service revenues as subscriber slowdown continues. After rising by an average of 25% in 2004, 2005 and 2006, global mobile phone subscriber growth will decelerate to 12.8% in 2007, according to iSuppli's Wireless Systems Service. The slowdown will continue during the following years, with subscriber growth dropping to 9.6% in 2008, to 7% in 2009 and to 5.7% in 2010, reports market research firm iSuppli.

This is for the simple reason that developed countries have reached near saturation of mobile-phone subscribers. In 2006, North America achieved 93.2% wireless subscriber penetration, while South Korea was at 83.2% and Japan at 74.2%. To counter that trend, wireless carriers have begun to offer services like Internet access, mobile television and music playback to 3G subscribers in the developed world. By contrast, the world's developing nations and regions have much lower wireless penetration rates. For instance, Latin America is at 48.3%; China at 24.4%; Africa and the Middle East at 23.6% and India at a mere 13.5%. However, efforts are being made to change this situation by 2010.

With pressure to build ULCH phones that cost less than $40, semiconductor suppliers have begun to offer single-chip solutions that dramatically cut BoM for such phones. Besides leveraging these developments, wireless carriers are also adopting strategies that meet the needs of the regions. As a result, the research firm expects a rise in wireless subscription to 65.5% in Latin America; to 36.6% in China; to 34.8% in Africa and the Middle East, and to 31.5% in India by 2010.

Thus, as the Western nations, Japan and Korea slowly adopt 3G handsets and services, developers are exploring the fourth-generation (4G) wireless communications to further drive this sector to new heights in a few years. In reality, proponents have been setting the stage for migration to the 4G for a couple of years now. Many analysts believe that the 4G mobile phone technology will roll out sometime in 2010. Although 4G specifications have yet to be finalized, experts suggest that data rates of 100 Mbps for mobile applications and 1 Gbps for nomadic applications should be achievable by the year 2010. But, Japan's NTT Docomo is ahead in this data rate race for 4G phone development. In a field trial, the company has doubled the maximum packet transmission rate to 5 Gbps by increasing the number of multi-input, multi-output (MIMO) transmitting and receiving antennas from six to 12 by using proprietary received signal processing technology. Last year, it demonstrated 2.5 Gbps packet transmission in a down-link. Details of the experiment were presented at the 3GSM World Congress.

In order to avoid delays as experienced with 3G devices and networks, instrumentation suppliers have also begun to introduce testing gear to support both network and mobile device testing at the earliest development stages of 4G products. Experience has shown that the earlier the problems are detected, the lower the cost of correcting them. Toward that end, suppliers like Agilent Technologies, Aeroflex and others have started to address the test challenges of 4G products and networks.

Consequently, as 4G specs are being readied developers are exploring killer applications. Music and video telephony are on the top of the list. Eyeing the success of iPod, handset developers and service providers are exploring the possibility of down-loading full-length songs or music pieces in next-generation cell phones, as well as adding the ability to handle video. Time will tell if convergence of music and video will be the killer application. Anyway, 4G is the new buzzword at 3GSM.