I don't know if anyone posted these articles from last weeks BW but they are rather enlightening. It also shows that the US is behind in making full use of the medium relative to Europe and Japan. For investors willing to do the homework, opportunities exist.
To See What's in the Pipeline, Look Abroad
Rehito Hatoyama and a colleague from the Mitsubishi Corp. trading house have just finished a client meeting in Tokyo's Gotanda district. It's 7 p.m., and everyone wants to unwind over a good meal somewhere new. Is there a great restaurant nearby? Hatoyama, 25, whips out one of his two Internet-capable digital cell phones, clicks on the menu, and several seconds later accesses a 'gourmet guide.' Cradling the palm-size handset in his left hand, he types in with his thumb the phonetic equivalent of 'Gotanda' and is soon scrolling down a list of recommended eateries in the area. He spots one that looks promising and clicks on it to initiate a phone connection. While waiting for the restaurant to answer, he glances at his other cell phone and sees that he has e-mail and voice-mail messages. 'It's just so convenient,' raves Hatoyama. 'I can get information instantly.'
Think every country is lagging behind the U.S. when it comes to Internet mania? Think again. While Japan and Europe are still behind in the PC revolution and overall Internet adoption, they're well ahead of the U.S. on the road to the mobile Internet. 'When we want our people to learn about what's interesting in mobile phones, we send them to Japan or Scandinavia,' says Steve Ballmer, president of Microsoft Corp. European phone companies are rolling out a host of data services for Web-surfing smart phones. The biggest bottleneck, in fact, is a shortage of the phones. 'People are lining up for the Nokia 7110s,' says Jacob Hamacher, chief executive of EHand, a Swedish software startup. 'It's a fever.'
CONFERENCE CALL. In Japan, the fever is becoming an epidemic. More than 3 million Japanese, mostly teenagers and young adults pining for easy Net access, have signed up with the main wireless carriers. NTT DoCoMo's I-mode service is the most popular, attracting 2 million subscribers since the start of services in February. Users get an instant connection and are charged only for the volume of data transmitted and received. The rival CDMAOne service, launched in April, now has close to 1 million Net users. CDMAOne requires a dial-up link and often a long wait for a connection.
Europeans are a couple of steps behind. The state of the art, at least for now, is the Nokia 9110, the so-called Communicator. This is a large, $750 cell phone that flips open into a tiny, Web-browsing computer. It links with a PC resembling a palm-size handheld to coordinate its calendar and contact list. It has a speakerphone, allowing you to punch up a name, hit the call button, and yammer hands free. The problem with the Communicator: It's bulky, and the Web-browsing is limited to a handful of specially formatted sites.
No matter, the Communicator is fast becoming obsolete. Following Japan's lead, Europe is turning to the rival Wireless Application Protocol (WAP) standard for data. Hitting the shelves about now is Nokia's entry, the $500 7110 model that looks more like a conventional phone handset. Other European companies are showing off their own variations on the theme. Ericsson's R380, for example, resembles a small version of Nokia's Communicator, with a keyboard that folds back to expose a larger screen. But it's not available on the European market until January. The same goes for Alcatel's snazzy One Touch Com.
Don't snap them up yet, though. The WAP standard is new enough to Europe that early products are likely to be buggy and perhaps incompatible with each other. So a lot of companies are holding back, letting Nokia work out the kinks with its 7110 handset. 'I'll let my competitors find the bugs,' says one Alcatel manager.
This could lead to huge demand for the new 7110, especially in Scandinavia, where people can check bank balances or subscribe to stock-market alerts triggered by the movement of individual share prices. On the rest of the Continent, services are still slow to rev up. During the Telecom99 trade show in Geneva, Switzerland, officials from the British phone company Orange showed off their Internet services on a Lake Geneva cruise. But the only weather forecasts were for the British Isles.
The Japanese face no such troubles. Japan's Netizens can buy and sell stock, reserve hotel rooms and airplane seats, and check their horoscopes while on the go. Hatoyama is constantly reading news headlines on his CDMAOne set and checking soccer game results and the music hit charts on his I-mode. He sends and receives dozens of messages on both cell phones. Many of the services are free. Others charge a small monthly fee, such as the $2.85 he pays to keep his address book online. So what does it cost this power user? He figures he pays $140 a month for each phone, well above the average $85 most Net-phone users dish out.
In Japan, a big fad is text chat--sending short e-mail messages to one another. People can be seen touch-typing messages on their tiny cell phones while walking on the streets. Hatoyama got the hang of it when he was a high-school student in Tokyo in the early 1990s. Back then, when cell phones weighed a ton and could only be rented, he and his friends used pagers to send each other messages in numerals. The first letter of the Japanese phonetic alphabet was coded 11, the second 12, and so forth. 'By comparison, a smart phone is a breeze to use,' he says.
WEE KEYPAD. Mind you, not everyone agrees. Eifumi Yasukawa, 31, who works for a family-run business in Toyama, in central Japan, says when it comes to Net access, he'll choose his Macintosh computer over his Net phone any day. And then there's the keyboard. 'If you're a teenager, fine. But I have a hard time typing on a tiny cell phone,' says Yasukawa, who purchased an I-mode handset in September. Still, he loves the convenience, and so he's practicing. He also has his Mac set up to transfer his urgent e-mail messages to his wireless phone when he's on the move. That way, he says, 'I'm always in touch.'
Thanks to the new generation of smart phones, Japanese consumers are finally joining the Net revolution. And they're just the first wave. Wait until NTT DoCoMo, the country's largest wireless operator with 27.7 million subscribers, launches its Third Generation service by March, 2001. This technology will make possible lightning-speed data and video transmissions, spawning a slew of new gadgets. By then, Hatoyama could be running a wireless content service, like some of his friends. 'The opportunities will be boundless,' he says. In Japan and Europe, that is. For now, at least, the U.S. has yet to pop up on the mobile Internet radar screen.
By Irene M. Kunii in Tokyo and Stephen Baker in Paris
But Will It Call My Mother?
The new smart phones are nifty--though not yet perfect
When Howard Gerson has a meeting he mustn't forget, the chief executive officer of Certified Safety Manufacturing Inc., a maker of first-aid kits in Kansas City, Mo., doesn't ask his secretary for a reminder. Instead, he programs the calendar in his wireless phone to ring him. And when he needs to send an e-mail while waiting to board a plane, he doesn't pull out his laptop PC. He'll zap it from that same bionic gadget--a brand-new NeoPoint 1000 that he bought the first day Sprint PCS sold them. Heck, if he's running late for a flight, he can even check whether the plane is on time by using his phone to call up a travel Web site. 'I can do anything with this phone,' says a beaming Gerson. 'It's great.'
Wireless companies call these nifty new devices smart phones--digital wonders capable of zapping dollops of Web data to and from the palm of your hand. Loaded with goodies such as a minibrowser that connects to the Internet, the phones will tempt you with e-mail capability, link you to popular Web sites, alert you to an appointment, help you write a to-do list, trade stocks, and lest we forget, handle plain old telephone calls.
Sure, carriers are still offering creative pricing on voice calls to lure new customers. But in the age of the New Economy, information is all the rage. Besides, wireless companies are looking for new sources of revenue to supplement voice calls, which will slump 11%--from $42.39 per user this year to $38.77 in 2002, according to Dataquest Inc. Mobile-phone carriers understand that itinerant executives are eager to access e-mail and the Net while they're on the go. And if you consider that the number of Netizens worldwide has climbed to 205 million this year, it's easy to see why carriers are trying to nab you with Web services. 'That's the big driver--Internet penetration,' says Jane Zweig, executive vice-president at wireless researcher Herschel Shosteck Associates Ltd. in Wheaton, Md.
Of course, this isn't the first time we've heard about Web phones. In 1996, AT&T (T) <http://www.personalwealth.com/cgi-bin/WebObjects/SNP?action=gotoCompanyProfilePage&tickerSymbol=T&origination=BWT00001> and GTE Corp.(GTE) <http://www.personalwealth.com/cgi-bin/WebObjects/SNP?action=gotoCompanyProfilePage&tickerSymbol=GTE&origination=BWT00001>, among others, introduced 'Net phones' that could snatch news and other data from the Web. The phones used existing cellular technology for voice calls, but something called cellular digital packet data, or CDPD, to handle data calls. Users found the intertwined technologies unreliable in certain regions. At nearly $1,000, the phones were priced out of most people's reach. And the clunky handsets were tough to operate. 'If you were a nerd deluxe, you'd be thrilled,' admits a GTE spokeswoman. 'But most people are not that way.'
This time around, carriers promise, it's the real deal. Rather than accept their word, I took some of the industry's hottest new handsets for a test drive: the Nokia 8860 from AT&T Wireless Services, the Motorola i1000 Plus from Nextel, the NeoPoint 1000 from Sprint PCS, and a turbocharged StarTac from Motorola called Timeport that should be available from AT&T and Sprint (PCS) <http://www.personalwealth.com/cgi-bin/WebObjects/SNP?action=gotoCompanyProfilePage&tickerSymbol=PCS&origination=BWT00001> this holiday season.
Web capabilities have clearly improved, but my cruise through the wireless Web had plenty of bumps along the way. My setup process for Sprint's NeoPoint 1000 was fraught with hassles, calling for some two hours' worth of troubleshooting with Sprint technicians. The e-mail procedure is slow, and connections to the Net often fail.
Despite their shortcomings, the new products and services have a few undeniable advantages. None of the phones are bulky. They are all far more affordable than smart phones used to be--ranging from Nextel's $199 to Nokia's $799. And with features such as speaker phones and calendars, they have plenty to attract busy executives.
For those eager to dial into the Net from their mobile phone, Sprint PCS has a head start. Dubbed 'Wireless Web,' its service is accessible via 10 different phones. But clearly the most enticing tool is the NeoPoint 1000. At 6.4 oz. and $399, it's light and affordable. And for road warriors, Sprint offers all-in-one rates starting at $59.99 that bundle loads of local, long-distance, and Web browsing minutes into one plan.
While cruising the I-way, I appreciated the NeoPoint's big screen, which features familiar Web words such as home page, bookmarks, and Yahoo. Sprint offers e-mail via a partnership with Yahoo Inc. While a lot of carriers let you send messages from the Yahoo Web site to a cellular phone, Sprint is one of the few that lets subscribers send an e-mail from their phones. And within weeks, Sprint will allow customers to zap e-mail automatically, rather than requiring them to sign in at Yahoo first.
To send my first e-mail from my new pocket-size pal, I patiently enter my user name (typing on a tiny phonepad calls for acute dexterity) and wait for a connection. Soon, disappointment hits. 'Web service problem,' my phone flashes. 'No way,' wails a Sprint PCS spokeswoman when she learns of the snafu.
Yes way. Browsing the Internet via wireless phones isn't nirvana. My Web connection through Sprint failed more often than it succeeded. Sure, it was cool to request a stock quotation or news snippet that struck my fancy. But ordering them up and sending e-mail just take too darn long. At least in your office you can turn to some other activity while the Windows hourglass signals you to be patient and wait. 'How will people react to the slower speed of information and content?' asks Bryan Prohm, a wireless analyst at Dataquest Inc. 'That's the unknown.'
Jonathan Jackson knows he's not interested. As a partner in a Chicago Anheuser-Busch Co. distributorship, he's a heavy mobile-phone user who just upgraded to Motorola's Net-capable i1000plus. But the son of civil-rights leader Jesse L. Jackson figures Web browsing is best done from the desktop. 'By the time I leave my office computer,' he says, 'I'm off the Net for good.'
Such skepticism illustrates why carriers are tiptoeing into the wireless Web revolution. Nextel(NXTL) <http://www.personalwealth.com/cgi-bin/WebObjects/SNP?action=gotoCompanyProfilePage&tickerSymbol=NXTL&origination=BWT00001>, for example, began selling the Web-ready i1000plus last summer but has been slow to offer Internet service, claiming they're still testing it. 'We don't want people to have missed expectations,' says Michael M. Ozburn, vice-president and general manager of Nextel Online. 'They can use it for e-mail, but we don't want people to think that they can download a huge Power Point presentation.'
HIDDEN COSTS. Nextel expects to offer Web browsing around March. In the meantime, as with most carriers, you can receive news and stock quotations as text pages if you sign up for service at select Web sites such as MailandNews.com and Yahoo. But consider this: Nextel, like other carriers, bills you 10 cents for every page you receive, or $3 a month for 100 pages. So remember to ask how much the Web minutes cost, because the plans can be confusing. As analyst Prohm warns: 'In none of these applications is wireless-data airtime free.'
Still, that's no reason to avoid the i1000plus phone. If this belt buddy were a car, it would be the hottest SUV on the street--practical, yet luxurious and trendy. At $199, it's brimming with features any exec would love. The two to die for? A speaker phone that you can toss on a conference table or car seat and babble away hands-free. The other is a 'walkie-talkie' that lets up to 100 chat at the touch of a button. 'Where you can have dropped calls with a cell phone, the walkie-talkie is very strong,' says Jackson, who uses it to reach his 30-odd truck drivers.
AT&T is shooting for excellence in its second stab at data phones. Three years ago the nation's biggest wireless carrier, with 11.5 million subscribers, unveiled Net phones that cost up to $1,000. It sold just tens of thousands of units. In June, AT&T started offering Personal News--Web bits such as stock quotations from Bloomberg.com and sports scores from ESPN.com--to about three-quarters of its phones. With most carriers, you have to buy a new handset to browse the Web, but AT&T says its service works on existing phones. 'That's what is great about it,' says Daniel R. Hesse, CEO of AT&T Wireless Services.
Great disappointment, maybe. The personal news items on my phone bored me within hours. You can't select specific news, only broad categories, so you get a flood of stuff. (One headline read: 'Two Disco Fires Erupt in Austria.' Go figure.) No busy executive needs to pay $4 a month to be interrupted by nagging beeps for info he's not interested in. The only way to stop the barrage is to cancel the service. So if you want news, wait until AT&T's Web-browsing service is released via a new Mitsubishi Corp. phone (possibly by early next year). That way you can control the flow of information by surfing to the Web sites of your choice.
FAMILY PLAN. What you don't have to wait for are the most stylish phones in the world. AT&T and its manufacturing partner, Nokia, are determined to nab new users with something other than basic black. The Nokia 8860 is a feathery 4.1 oz. and just a smidgen bigger than a Zippo lighter. Sleek and chrome-plated, it's so fashionable the Italians call it a 'Rolex phone.' And it's got brains: a calendar, a calculator, and a 250-entry address book. But at $799, it's not for everyone.
To reach out and touch users beyond data-hungry business types, AT&T is focusing just as much on new rate plans and phone styles as it is on Web strategies. The carrier now offers phones that have face plates in six colors and Disney characters. Fashion-conscious users can swap them to give the front of the handset a different look. The creativity bug applies to rates, too. Once one person signs up, a 'family plan' discounts the price for new members and allows unlimited calling within the family and free wireless calls to the house.
That's great for consumers right now. But in an increasingly data-dependent world, carriers simply must make good on the promise of faster data speeds. Today, several wireless carriers offer software that lets subscribers use their phone as a wireless modem. The service is useful for, say, checking e-mail at a crowded airline gate. By attaching your phone to a laptop with a short cable, you can log onto the Net when a phone jack is nowhere to be found. The trouble is, at 14.4 kilobits per second, the connection speed is half that of most dial-up modems.
In a year, these speeds could reach 56 kbps--and as much as 100 times that by 2004. Sure, the wireless Web has drawbacks, but Kansas City data booster Howard Gerson feels business is too critical to wait. If you don't want to lose ground, it's time to dial the Net.
By ROGER O. CROCKETT |
