SINGAPORE: Hoang Anh Tuan, a self-confessed "handphone freak" in Viet Nam, calls his Sony Ericsson smartphone his pride and joy.

The 28-year-old producer for a television station organizes his schedule, reads Word documents and views e-mail using his P900 mobile, which combines phone functions with features similar to those of a personal digital assistant (PDA).

"I can't live without technology," said Hoang.

"I love using high technology applications in my phone, and this phone has been indispensable to my work."

Early technology adopters, such as Hoang, have boosted sales of smartphones across Asia, and are driving expectations the region's demand for the pricey devices will outpace those of Europe and the United States over the next few years, analysts said.

The trend is being watched closely by phone makers, such as the joint venture between Sony Corp and Ericsson, because smartphones carry higher profit margins.

Strong sales of the Treo 600 smartphone helped US handheld computer maker palmOne Inc post a quarterly profit last month that was more than twice Wall Street estimates.

The uptake of smartphones is also key for telecoms operators looking to raise revenues from data services, such as mobile Internet and e-mail, as voice tariffs fall under competitive pressure.

Strategy Analytics predicts Asia-Pacific will buy one-third of all smartphones in 2004, outstripping North America's 27-per-cent share of sales and Western Europe's 28 per cent.

Asia's share of smartphone sales is expected to rise to 36 per cent by 2008, far exceeding the 23 per cent expected for North America and 24 per cent in Western Europe.

Disposable income

"The percentage of disposable income that is spent on mobile devices in these markets is much higher compared with Western Europe and the United States," said Strategy analyst Neil Mawston.

That's certainly true of Hoang, who changes handsets every six months. He said he is willing to shell out at least US$300 to US$400 for a new phone, almost half his monthly income.

South Korea and Japan will lead demand in Asia, Mawston added. "Users are keen on the latest gadgets and more willing to spend on premium business-centric devices," he said.

So far, smartphones have been a niche market. A total of 11.2 million phones were shipped worldwide in 2003, just 2.1 per cent of total handphone sales.

But the figure is seen growing to 109.9 million units by 2008, about 14 per cent of the total, indicate data from Strategy.

Nokia, the world's biggest mobile phone maker, said smartphone demand in Asia was "very promising."

"There continues to be an accelerating trend because the Internet penetration has not been that high in many parts of Asia, and people are getting acquainted with the Internet over the mobile device instead," Nokia Executive Vice-President Anssi Vanjoki said.

The Finnish firm has forecast the industry this year will ship 20 million smartphones globally, almost double last year's sales.

Motorola Inc, the second-largest phone maker, also expects Asia to adopt smartphones more aggressively.

"Consumers in the Asia-Pacific region are more ready to adopt the latest and greatest as there's a more experimental mindset," Scott Durchslag, Motorola's corporate vice-president said.

"There's also the prestige factor in owning the latest gadget with the most powerful set of features."

Businesses in Asia are also expected to introduce smartphones into the workplace faster because it will be easier for them to adapt their computer infrastructure to provide wireless data services to employees.

"A lot of Asian companies started deploying IT (information technology) late, so they have fewer legacy architectures to contend with," Durchslag said.

"For example, a bank in the United States would have systems cobbled together over decades, and would face heavy integration costs, but for an Asian bank, it would be cheaper and faster to put a mobile platform under their infrastructure."

Agencies via Xinhua

(Business Weekly 07/20/2004 page14)