Text of NYT article on Web Phones. (8:49 update - for those who want to see it a second time. Sorry.)
April 15, 1999
Web Phones: The Next Big Thing?
New Phones Have It All, but Do Enough Consumers Want It
All in One Device?
By KATIE HAFNER
Mark Dahm, a 37-year-old sales director in San Mateo, Calif., depends
on his mobile phone for far more than phone calls. He uses it to tap
into his contact list at work and to send and receive e-mail. He
retrieves stock quotes from the Internet and looks up directions while
driving. If he needs a printout, it's no problem. While waiting for a flight at an
airport executive lounge, he can send information from his phone straight to
the lounge's fax machine.
Dahm, who works for a Web
software company called the
Inktomi Corporation, is a
hardy, happy pioneer,
equipped with a cellular phone
that can retrieve information
from the World Wide Web and
perform a variety of other data
services.
For now, Dahm is a relatively
rare specimen -- he uses a
Samsung Duette phone with
Pocket Net from AT&T
Wireless, but Pocket Net and
similar services have yet to
build a large following. Last
year only 203,000, or 0.3
percent, of the 64 million
cellular users in the nation used Web-capable phones to pull information off
the Web, according to the International Data Corporation, a market research
company in Framingham, Mass.
But the "everything phone," or Web companion, as it is sometimes called, is
catching on. These new all-in-one communications devices and organizers
will be marketed in much greater numbers and many more forms in coming
months. "In the next couple of years, almost every phone will be
Web-capable," said Phillip Redman, an analyst at the Yankee Group, a
technology consulting firm in Boston, even though it remains an open
question whether people want to use their telephones to surf the Web.
Those who do will not surf with their phones the same way they can surf
with desktops, notebooks, sub notebooks or WebTV. What phone users will
be able to get from the Web, analysts say, will be bits and pieces of
information, like the weather, stock quotes and movie listings. They will also
be able to conduct simple transactions, like trading stock or buying movie
tickets. For now, at least, no one will be downloading MP3 music files to a
phone or enjoying the new "Star Wars" trailer.
Even with most phones becoming Web
ready, the International Data
Corporation estimates that by 2002, the
number of people using their phones to
get to the Web will rise to 6 million, or
5.6 percent of 108 million expected to
be using cellular phones then.
There are already a few phones on the
market that are capable of retrieving some information from the Internet.
Among them are the Mitsubishi Mobile Access 120 Series phone, the
Samsung Duette (the one Dahm uses) and Nokia's 9000il Communicator.
The prices of the phones vary from $100 to $700 and require a subscription
to a cellular carrier.
Right now, cellular companies offer packages of Internet-based data, like
news, stock quotes and weather, that can be delivered to these phones. One
of those companies is AT&T Wireless, which has a Pocket Net service that
works with either the Mitsubishi or Samsung phones. Bell Atlantic offers
something similar, its Cellscape service, which sends information to the
Mitsubishi phone. Unwired Planet, a company based in Silicon Valley that
makes software for Internet delivery over wireless phones, lists other
Web-enabled phones on its (www.Unwiredplanet .com) Web site.
To use a Web phone to get Internet information, however, you must be in a
region that is served by the data network. That includes most large
metropolitan areas.
"The industry will eventually take off," Redman said, "but it's waiting for the
stars to really align."
The most critical of those stars, as Redman sees them,
are the ready availability of networks that support high
transmission speeds for data, handheld devices that are
easy to use yet offer many functions and, most
important, applications specifically designed for these
devices. Software that offers specialized network
services, like Internet access and e-mail, is very likely
to make the everything phone attractive to a mass
market, much as the cellular phone itself did a decade
ago.
"Let's say I've got the network and the device, but
what the heck am I going to do with it?" Redman said.
"And what will I pay? Those are questions not fully
answered. And those are the ones companies are
struggling to answer."
They may be struggling, but they aren't hesitating. The
number of palm-size products coming on the market is
surging. Those who buy these phones will, however,
find themselves participating in a large and expensive
field trial.
"There's a bunch of marketing by experimentation
going on out there," said Bob Egan, research director
at the Gartner Group, a research and consulting firm
in Stamford, Conn. "There are lots of people coming out with devices I call
'one off' devices. They throw them up against the wall and see what sticks."
Qualcomm, based in San Diego, has two phones to throw at the wall. This
summer, the company will begin selling the PDQ Smart Phone and the Thin
Phone, both of which can retrieve information from the Web.
The PDQ's most appealing characteristic is that when the phone flips open, it
is a dead ringer for the Palm III, the popular handheld organizer from 3Com's
Palm Computing division. In fact, the PDQ is a hybrid creature that combines
a Palm III and a digital cellular phone. It supports Graffiti, a stylized form of
handwriting used on Palm devices, and it can share data with a desktop
computer, synchronizing information between the two machines.
The PDQ's screen displays up to 11 lines of text, a
vast improvement over the standard 4-line displays of
most digital phones. But at 10 ounces, it is nearly
twice as heavy as most cellular phones on the
market.
It is difficult to pin down prices for the Web-capable
phones because each buyer will need to subscribe to
a cellular carrier's service, and some carriers will
probably offer the phones at discounts. There will
also be variation in how much the carriers will
charge for providing different kinds of information.
Qualcomm hopes that people will be willing to pay a
hefty price for the PDQ phone. It has not released a
price, but analysts expect the PDQ to cost $500 to
$1,000, depending on carrier subsidies.
"There's so much benefit to having the wireless Web
link," said Paul E. Jacobs, president of Qualcomm
consumer products. To prove his point, Jacobs
described a recent meeting with industry analysts
when he was able to use his mobile Web access to
compare the PDQ's battery life with that of a Nokia
phone. "I took my PDQ and went to the Nokia Web
site and found the numbers," he recalled.
The PDQ's daintier sibling, the four-ounce Thin Phone, is more limited. The
screen is much smaller, showing four lines at a time, and it has no built-in
organizer. Analysts expect it to cost $100 to $200.
Limits on Web surfing are common to all these devices. Most companies
offering Internet access from phones are quick to caution prospective
customers that what these devices do is a far cry from Web surfing as most
people understand the concept. Instead, they retrieve small bits of Web text
and simple graphics, reformatted to fit onto a small screen.
Palm Computing has coined a delicate euphemism for
what its products do: Web clipping.
Palm Computing is coming out with its own Web
device, called the Palm VII, which can retrieve
information from the Internet and do two-way wireless
messaging. The Palm VII will be available "sometime in
1999," Palm Computing executives said. The Palm VII
does not have a phone and is expected to cost less than
$800.
With Palm Computing's Web clipping, you turn on the
device and are presented with a series of icons from
sites like Moviefone, Bank of America, Travelocity,
E-Trade and Thestreet.com. If you are looking for a
stock quote, for instance, you click on an icon for the
E-Trade Web site, fill in the ticker symbol and press
Go. The Palm VII then retrieves the quote, or clipping,
minus the graphics-intensive trimmings usually
included with a Web site. Subscribers to the Palm VII
Web services will pay $10 per month to transfer
approximately 100 clippings to the device, or $25 for
300 clippings. Using the Palm VII, you will be able to
purchase plane tickets, buy books or trade stocks.
Buzz is also building around a new company called
Handspring. Founded by the same entrepreneurs who invented the original
Palm Pilot, Handspring has been highly secretive about its plans. Analysts
expect the Handspring product to combine Palm technology, which it has
licensed, with a phone, creating a device aimed at consumers.
Some of the other devices expected soon are slimmer than the Palm VII and
more versatile. One, a champagne-hued, palm-size, six-ounce cellular phone
called the Neopoint 1000, is expected to be available early this summer. The
Neopoint phone has Next Generation written all over it. The elongated screen
holds 11 lines of text, and a speech recognition feature is integrated with the
phone's contact list. The phone comes with a docking station that lets you
synchronize information with your PC and recharge the phone battery at the
same time.
Innovative Global Solution, the La Jolla, Calif., startup that makes the
Neopoint phone, says it subscribes to the "simpler is better" notion of
industrial design. That has impressed several analysts.
"There's a whole thing about the screen size, and about
being more versatile but still being simple to use, and
they've hit that," said Redman, of the Yankee Group. The
phone will operate on the Sprint PCS network and is
expected to cost less than $300.
Like nearly all other phones that are already on the market
or soon to arrive, the Neopoint phone uses wireless Web
access technology developed by Unwired Planet. Unlike
the Palm VII, which presents information in the standard
HTML (hypertext markup language) format used to build
Web sites, Unwired Planet's software gives a user access
to the Web with a format called HDML, for handheld
device markup language.
HDML deals only with text, which makes it simpler and
therefore easier to deliver to a relatively primitive cellular
phone screen. What the user sees is a hierarchical menu
-- with each choice you make, you delve deeper into a
site.
Summer is also the rollout period for a new crop of
phones from Motorola. The i1000 Plus model will be
available in six cities on the Nextel digital cellular network
by the end of the year. It will integrate a digital phone, an
alphanumeric pager, a two-way radio, an e-mail device and a microbrowser
into a five-ounce cellular phone. It will cost around $250.
When set in Net mode, the Motorola phone fires up the Unwired Planet
microbrowser and takes the user to a Web portal maintained by Netscape and
Nextel. That portal sends customized information -- snippets of weather or
financial news or stock quotes -- to the phone.
A new company called Air Flash is developing a
$5-per-month service that uses speech
recognition to send, say, movie schedules,
stock quotes and phone directory information
from the Web to digital cellular phones. Air
Flash, in Redwood City, Calif., introduced its
technology at the Demo Mobile Conference in
Coronado, Calif., earlier this week. The service
will be available this summer.
Also at the Demo Mobile Conference this week,
General Magic, a software company in
Sunnyvale, Calif., unveiled a "voice agent"
application that can, for instance, be used to bid
for items at an online auction site from a cellular
phone using voice commands. The service will
be available later this summer.
Redman, of Yankee Group, contends that
people are willing to get information services
but that they are not willing to buy them. A
Yankee Group survey found that consumers
were interested in getting Web-based weather,
directions, traffic conditions and directory
information but that more than one-third said
they would not be willing to pay an additional monthly fee for such
information.
Beyond the questions of market acceptance, there are still technical hurdles to
overcome. Standards for sending data from Web sites to wireless devices are
still evolving. Cellular carriers are busily enhancing their networks to carry
data at higher speeds, but in the meantime most transmission speeds remain
relatively snail-like: about 9,600 bits per second, which is considerably more
sluggish than a bottom-rung modem running at 14.4 kilobits per second. And
different digital cellular networks operate on different and incompatible
standards; a phone that works on the Sprint PCS network, for instance, will
not necessarily function on others.
But the companies that make wireless devices will
continue to come up with solutions in search of a
demand. "Everyone believes the market will
segment, but no one knows how big those
segments are or what they look like," said Jacobs,
of Qualcomm. "Is it just a phone with a standard
screen, or a big screen? Is it even a laptop with an
embedded wireless modem, or something altogether different we haven't
thought of?"
In the meantime, all the world's a test site.
Copyright 1999 The New York Times Company |
