AS THE UNDERLYING mobile communications technology moves beyond the third generation (3G) with talk in the Asia-Pacific region of 3.5G, the key element critical to the successful deployment of any technology - the handset - continues to undergo constant reinvention. 'We are seeing continuous improvement in handsets. The first generation of 3G handsets focused on functionality. Now they're focused more on design and style,' said Mary Lamb, corporate communications and public affairs, Motorola Asia-Pacific. 'That's because handsets are becoming smaller, more feature-rich and with increased battery life, which is making them more attractive to consumers.' With users already accustomed to using their mobile phones to play music and games, browse the internet or take pictures, the question is what will be the next step in the evolution of a device that has all but reached the holy grail of 3C (communication, consumer electronics, computing) convergence. Indications are that mobile entertainment in general, and mobile TV in particular, could be the next major application mobile phones are used for. 'We are fully upbeat about the significant growth potential of mobile entertainment in Asia as consumers continue to demand compelling and entertaining mobile content,' said Mobile Media Asia-Pacific general manager David Wong. Stefan Rust, interim chair of Mobile Entertainment Forum Asia, said mobile TV was one of the most talked about applications. 'Mobile TV will develop into a new medium with its own niche in the years to come.' Daniel Kirwin, managing director of the 3G World Congress and Exhibition, said: 'Mobile TV is much more than movies on the move. As most consumers spend significantly more time watching TV than using their phone, the potential of mobile TV is enormous. Hong Kong, for example, is a prime market for mobile TV as broadcasters will be able to reach subscribers while [they are] commuting. High-quality broadcasting in a mobile environment has recently become a viable proposition, enabled by technological advances in digital broadcasting, cellular networks and multimedia handsets.' One media group on the mainland has already made a start on a limited technological scale by launching a romantic soap opera for mainland cellphone users called The Appointment. Each episode lasts five minutes and is available for download only to a mobile phone. Another important trend is the growth of smartphones, which are eating into the market share of handheld personal devices. A recent study by consultants Canalys estimates that worldwide shipments of smartphones grew more than 105 per cent in the second quarter of this year, year on year. Industry watchers projected that all mobile phones (except disposable phones) sold in the near future could be categorised as 'smartphones'. Market research firm Yankee Group estimates that 1.26 billion mobile phones will be sold in Asia Pacific between this year and 2009. Mainland China would account for the bulk of the region's sales with 557 million units, followed by Japan with 252 million and India with 138 million. Despite the huge potential in the region, the limited buying power of major constituent markets such as China and India means there is still demand for cheap handsets and a heavy onus on handset makers to continue to cut production costs if they are to achieve greater penetration in the region. In some cases, entry-level handset prices have fallen to US$40, while recently Motorola was awarded a contract by the GSM Association to supply US$30 handsets in emerging markets.