Mobile industry gears up for big show after tough times

(GSMC Limited, a subsidiary of the GSMA)

The mobile phone industry has begun to emerge from the economic crisis as it heads into its biggest annual gathering next week with the sector's newest big gun, Google, making its presence felt.

The four-day Mobile World Congress opens in Barcelona, Spain, on Monday with the usual guessing game about potential announcements on the latest innovations that promise to revolutionise the way people communicate.

Attendance is expected to be about the same as last year but lower than the 55,000 people who attended the event in February 2008, prior to the crisis, according to GSMA, the industry group that organises the congress.

More than 47,000 people and 1,300 exhibitors are expected to attend the congress this year, it said.

The World Mobile Congress comes as the industry begins to navigate away from a difficult period for the sector.

Global shipments of handsets had been falling every quarter since the third quarter of 2008, when the global financial crisis erupted, according to market research firm Strategy Analytics.

But shipments surged by 10 percent in the last three months of 2009, "signaling an end to the industry's year-long recession," Strategy Analytics said in a January 29 report.

While handsets have grabbed the headlines in Barcelona in the past, analysts say this year's event might focus more on operating systems such as Google's Android and applications that can be downloaded into smartphones.

"I think it's probably going to be a slightly different show in terms of the focus, as far as historically it has been a lot about hardware," said Carolina Milanesi, an analyst at information technology research firm Gartner.

"In the last couple of years you started to see more around services and definitely this year applications will have a huge part in the theme," she said.

Nonetheless, handset makers are expected to unveil new smartphones that allow users to surf the Internet, listen to music, watch videos and download applications to read news, update their social network profiles and play games.

The world's top mobile phone maker, Nokia, and South Korean rival LG decided to stay away from the exhibition floor this year, preferring instead to host journalists and clients at a building nearby.

"We prefer to have more personal events rather than to have agenda imposed on us by the organisers," a Nokia spokesperson said. "Our strategy is to have our own events.... There is also the cost (of having a stand at the congress)."

But South Korea's Samsung will be there as well as the maker of the Blackberry smartphone, Canada's Research in Motion (RIM).

The newest, and less traditional, members of the mobile phone industry are also expected to make big headlines.

Microsoft chief executive Steve Ballmer will host a press conference on Monday amid speculation that the software giant will unveil the latest version of its mobile platform.

Signalling Google's ambitions of becoming a leading player in the industry, its chief executive Eric Schmidt will attend the conference for the first time and deliver an address Tuesday that will be broadcast live online.

The Internet giant has made a splash in the mobile phone industry with its Android operating system, launched in 2007 in a direct challenge to Microsoft.

Google also entered the hardware business last month when it launched its own smartphone, Nexus One, in a challenge against another big rival, Apple, which never attends the congress but whose iPhone casts a big shadow.

Wireless operators have been worried about being muscled out of the application and content business by software and Internet firms, and Google has raised the stakes, analysts say.

"They'll scare the living daylights out of the operators basically," said Jeremy Green, mobile operator expert at research firm Ovum.

"What mobile operators have been frightened of for a long time is the fear that they will be turned into a bit pipe, and Google is basically getting them used to the idea."