Subject: [NEXTEL-1] Wireless phones fill with gadgets

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Date: Sat, 26 Oct 2002 20:37:47 -0400

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Wireless phones fill with gadgets

But are they wanted or even understood?

By
Jennifer Beauprez

Denver Post Business Writer

Thursday, October 24, 2002
- Not many people know that they can use their cellphones as portable modems and surf the Web on their laptops from anywhere.

They also may not know they can e-mail full-color photos to Grandma from their cellphone or play a game of Battleship against a far-away friend. Or people can securely tap into their office computer 1,000 miles away and open and manipulate documents via wireless phones.

The technology now exists, thanks to billions of dollars invested by wireless providers.

But a big question remains: Do consumers really want or need those features?

The answer isn't clear yet. Some say wireless plans have surpassed airlines in terms of complex pricing. Some charge by the minute, others by the kilobit.

The problem is that most consumers don't know what a kilobit is or how many they want.

"It's just too darn difficult," said Ken Dulaney, an analyst who follows the industry for the Gartner Group. "Consumers are very confused. I think phone bills have surpassed airlines in terms of complexity of charging."

He said retailers and their advertisements don't convey compelling incentives for people to pay $100 to $200 for a new cellphone that is capable of such whizbang features.

The other problem comes with setup. Using these devices involves having the right phone, the right software and configurations on your computer.

"No one wants to manage your phone like a computer," said Boulder executive Rick Patch, who has three devices - a Blackberry pager that sends and receives e-mail, a cellphone and a color-screen PocketPC. But he has no interest in trying to upgrade them for new services.

"A phone is like a toaster - you want to put bread in and have it pop out," he said. "You don't want to configure software on it."

Retailers do not yet provide that technical hand-holding very well, said Roberta Wiggins, who follows the industry for the Yankee Group, a market research firm in Boston.

"There's still a disconnect," Wiggins said. "We have the capability, but how do you demonstrate it and make it understandable? At the store level they're struggling."

Verizon Wireless struck a pact with Gateway Computer Corp. last week to solve some of those problems.

Gateway will sell as a package a computer, software and cellphone, which can be used as a wireless modem for surfing on the computer. The company will also provide technical support.

In a partnership with Sprint PCS, Toshiba will sell wireless Web modems that give business customers access to the Internet, intranet or other corporate software on their Toshiba notebooks from anywhere within the Sprint PCS coverage area.

"We agree that wireless is maybe too complicated to buy," said Mark Siegel, spokesman for AT&T Wireless. "We want to keep the services simple and straightforward."

That's key since AT&T and its competitors sank billions into upgrading their networks to handle data with hopes of keeping customers and getting them to add more services.

Sales for data services could reach $15 billion a year by the middle of the decade, Siegel said.

Despite the question of demand, the wireless industry touts the benefits of the new network.

In years past, Internet-enabled phones crawled at speeds one-tenth that of a dial-up connection. The new network, however, may deliver speeds akin to DSL or cable modem within the next two years, said Dave Melline, spokesman for Sprint PCS.

"It's going to be broadband in the sky," Melline said. "It's not about the speed but what the speed allows you to do."

For instance, Sprint customers can now download their e-mail onto the latest Palm Pilot models, read those e-mails and reply to them from anywhere for $5 a month, Melline said.

"This is going to make the PDA and the computer even more powerful," said William Gibson, CEO of MobiCom, a New Jersey maker of wireless products. "Everything they have in their office will be wireless now."

In Asia, consumers love the new cellphones with cameras. The phones, which retail for around $149, can link up with a tiny camera - which costs about $119. The camera weighs only an ounce and is the size of a quarter, AT&T's Siegel said.

People can take photos and e-mail them to friends. Eventually, they will be able to send those photos directly to the display screen of another person's phone.

"We expect the photography thing to take off, with 23 million phones sold next year worldwide," Gartner's Dulaney said. "People will use it for fun things, send pictures of the kids to Grandma. The reason those work is they're fairly simple and entertainment-oriented."

For consumers to adopt the latest and greatest technologies, wireless companies must make using the devices easy and offer simple, affordable pricing, industry experts say.

Right now, that's not happening, Dulaney said.

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