NYTimes. Web Phones: The Next Big Thing
April 15, 1999
New Phones Have It All, but Do Enough Consumers Want It
All in One Device?
By KATIE HAFNER
ark 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.
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