MOBILE PHONES are hot. As a result, so is the Seattle area, home of four major wireless carriers: AT&T Wireless Services, T-Mobile USA, Nextel Partners, and Western Wireless (which, in a throwback to the early days of cell phones, is in the process of re-branding itself Cellular One).
But being hot today doesn't mean being on sound financial footing forever, as investors in CB radio discovered. So wireless carrierswho now have phones in the hands of 50 percent of the U.S. population but, as market research firm IDC projects, face a subscriber growth rate dwindling from 7.6 percent this year to 0.3 percent by 2007are trying to get more money out of each consumer. To do that, they're turning from commodity-priced voice calls to potentially lucrative data services.
Some of the latest services were rolled out this month at WSA's "The Age of Wireless" conference in Seattle. Finally getting used to the idea of SNDNG TXT MSGS 2UTHRS and terrifying fellow health-club members with camera phones, subscribers are about to be barraged with more wireless-data options.
Games. Though the graphic sophistication of most games struggles to match that of Pong, a new generation is bouncing back. Seattle-based Dwango Wireless, for example, recently launched Star Diversion, a five-level, top-down space shooter vaguely reminiscent of the classic Space Invaders. While game play might be familiar, the features are unusual in a mobile-phone game: layered graphics, polyphonic sound, and vibrations when your ship explodes. Cool stuff for $8.99 per month.
Media. If you've got a color screen and decent sound, why waste it on just voice calls? That's what Seattle's RealNetworks is hoping by bringing its RealOne service to Sprint. For $4.95 a month, RealOne provides four hours of daily programming such as audio NPR newscasts and video entertainment and sports "slide shows" from ABC and Fox. At least Real is being, well, real about not trying to cram TV-quality video onto phones yet.
Forms. Companies from Bellevue-based Pocket PC stalwart BSquare to Kirkland startup Wildseed are hoping data will redefine what a wireless phone is. BSquare is going for the business person who needs something smaller than a laptop but more functional than most PDAs with its Power Handheld, a roughly $600 device due in Europe this fall with a slide-out keyboard, ability to view e-mail attachments, and, oh, make phone calls, too.
Wildseed is going for the one growth market nearly everyone agrees onyouth. Its Smart Skins, coming out early in 2004, are like changeable mobile-phone faceplates. The difference is these colorful, taco-shaped shells snap around a phone front and back. A chip in the shell uploads games, ring tones, screen wallpaper, and other features to change the phone's personality. Wildseed is pricing the Smart Skins as a $25 to $40 fashion accessory, though they require a special Smart Skin-capable phone.
STILL, NOT EVERY consumer data foray will succeed. Nokia, the 800-pound cellular gorilla, is trying to sell its vision of what a game-enabled phone should be with the N-Gage, set to launch worldwide Oct. 7. However, lukewarm reviews have slammed the $300 N-Gage's mushy keypad (anathema to hard-core gamers) and the awkward way the phone has to be held on its edge to make a call.
Nokia's woes highlight the challenges facing local players in consumer wireless-data services. In many cases, being able to use a new service requires a new, cutting edge phone: Dwango's Star Diversion is currently only available on the NEC 515, sold by AT&T Wireless, and RealOne works only on eight Java- enabled, full-color models of Sprint PCS Vision phones.
Second, consumer demand for many of these services is iffy. While a recent survey by wireless analysts the Zelos Group put cameras as the top feature wanted by 50 percent of subscribers, and more than a quarter said they had sent a text message, few seemed willing to pay to play games.
FINALLY, SPECIALIZED wireless devices are starting to encroach on territory phones covet. TrafficGauge, developed and built by a company by the same name here in metro Seattle, wirelessly displays congestion information for freeways between Tukwila and Edmonds on a mobile screen the size of a pack of cards. The $50 single-purpose device (plus $5 a month) already has many adherents among commuters and gridlocked businesspeople trying to get to meetings.
Mass-market saturation isn't always mass-market opportunity. Many consumers frustrated with dropped calls and confusing bills might, for the time being, choose to hold off while more phones and mobile networks catch up with what the latest ideas can deliver. After all, to paraphrase Sigmund Freud: Sometimes a phone is just a phone.
Frank Catalano is a tech-industry analyst, consultant and author safely situated on the trailing edge of mobile technology. He can be reached via www.catalanoconsulting.com.