As a series of high profile swanky, feature rich phones rush to India, they could add a new chapter to the Indian mobile phone boom story. New stars include Apple?s iPhone, Nokia N96, Sony Ericsson?s Xperia, Samsung?s Omnia and HTC Touch Diamond. A big chunk of them carry a price tag of over Rs 25,000 and many more such high-priced phones are on anvil. Vendors including Motorola, Sony Ericsson, Samsung, HTC and LG are promising five to eight models by the end of the year. Analysts like Gartner expect high-end phone sales to grow faster than basic phones this year.

Interestingly, the action till now has been limited to the unglamorous end of the scale ?barebone handsets priced under Rs 5,000. Excitement is now building up in phones with price tags of Rs 25,000 and above. Hottest applications in this space include music, internet access, push mail, maps, and social networking. If you exclude the designer phones, studded with diamonds and sapphires, most vendors seem to be betting big on smartphones with entertainment features in the high-end segment.

Competition is sure to go up. A few weeks before the launch of Apple?s iPhone in the Indian market, Nokia managing director D Sivakumar announced a study to understand the market for touch phones in India. Interestingly by the time iPhone hit the Indian market, Nokia had decided to launch a touch phone. And retailers are taking note too.

?Perhaps Nokia misunderstood the power of touch screen in smartphone category and iPhone has forced them to rethink their strategy,? says Pawan Marodia who runs a mobile retail store, National Radio Products. Analysts believe that the price of the Nokia touch phone would be in high midrange?that should mean Rs15,000-20,000. Most expect it to be much lower than iPhone?s price in the Indian market.

For now, Nokia seems to be betting high on N96, a multimedia smartphone in the Indian market. Priced at Rs 30,000, it is not a touch screen phone but has a widescreen. Nokia is still the leader in the high-end market, despite Blackberry making inroads in its E series segment. Industry analysts say that despite the prohibitive price of the iPhone, Nokia may experience some impact on the sales of its high-end N series phones. Many analysts also expect a revision in pricing of N series phones. In the enterprise market, Nokia?s E series is estimated to sell 10,000 to 15,000 phones per month, compared to 5,500 units sold by Blackberry.

Everyone expects 2008 to be an eventful year for the high-end category of mobile phones. Vendors like Motorola, Sony Ericsson, Samsung, HTC and LG would have a minimum of five to eight new handset models in the second half of 2008.

Majority of the mobile phone bigwigs are lining up some of the best designed high-end feature phones in the next few months. Having launched six new high-end phones, Samsung will launch few more before the year ends. ?We have moved up from number four to two in mobile phone business in the last eight months in India,? says Sunil Dutt, country head, Samsung Telecommunications India. Samsung is also strengthening the touch screen handset portfolio with the launch of Omnia. The Samsung 3G-enabled Omnia will be priced at Rs 40,000. 8GB and 126GB versions wil have features like extendable memory cards, satellite navigation support and will run on Windows mobile 6.0.

?The market has become exciting for us. We expect the growth in the high-end segment to continue, especially with 3G becoming a reality,? says Lloyd Mathias, director marketing India and South West Asia for Motorola mobile devices. ?In the high-end category, we have wide competitive offerings and phones, ranging from ROKR E6 priced at Rs 10,400 to Rs 25,000 of RAZR2 V8.?

Motorola plans to add many more in the next few months. Story is no different at Sony Ericsson, which is planning several new exciting models in the high-end segment. ?Some of these include the much anticipated X1I from our new Xperia series. The Xperia X1 is our first Windows Mobile smartphone that combine slick looks with a powerful multimedia entertainment and Web applications platform,? says Sudhin Mathur, general manager, Sony Ericsson India.

LG is planning to launch five to six more phones in the high-end category. ?In the smartphone category, the consumers are asking for more functionality like high resolution camera, high memory to store music, pictures, and multimedia messages with touch screen facility. All these are driving our mobile business,? says Anil Arora, head, mobile business, LG Electronics India.

Will phones with price tags north of Rs 25,000 make a dent in the Indian market? Ironically, phones priced above Rs 10,000 are classified high-end in Indian market. About 55% of the mobile phones to be sold in the legal channel in Indian market in 2008 are expected to be below Rs 4,500, according to research firm Gartner.

About 95 million mobile phones were sold in India last year and total shipments are expected to go up to 130 million in 2008, according to Gartner. And feature-rich smartphones would account for about 8% this year, up from 4.5% in 2007. ?Growth rate of high-end phones this year will be much more than the basic phones. Overall handset market will grow by 25 to 30%,? says Anshul Gupta, principal analyst, Gartner India.

Selling proposition in the high priced handsets are clearly not the same as basic phones. Memory cards, high mega pixel camera or making it 3G-enabled will not be enough. Ajay Sharma, country head of HTC India thinks that only concentrating on hardware will not provide much leeway for the handset makers and user interface, form factor and applications would be the key differentiating factors.

Till now, Nokia?s simple user interface, iPhone?s touch screen and Blackberry?s push mail excited the consumers. ?We have seen the vendor?s only aim these days is to increase the sale of the handsets. In 2009-10, it will be more of providing cutting edge applications along with good interface and form factor,? predicts Sharma.

Already, one is seeing reduction of the phone size and weight in business phones. Industry seems hungry for good applications. That could be one of the reasons why vendors like Motorola and Samsung have created their own entertainment zones. While Motorola has its own Motomusic zone, Samsung has its fun club. Motorola bought sound buzz to manage their music store. Dutt suggests Samsung could have some kind of an exclusive relationship with music companies for providing best of the music to their consumers. Industry is currently mulling over several new business models. Interesting ones include offering new Bollywood releases to its customers free of cost for few days and the option of keeping it permanently by buying it online from a music store.

With 3G, rich content-based applications may be more common in 2009-10. ?We will see more innovative applications bundled with the handsets in near future. Plain hardware will not drive sales any more then,? sums up Sharma.