Cell phones taking on many roles, transforming the market, a generation
By Jonathan Sidener Tuesday, February 05 2008, 01:05 AM EST Views: 47

In California's Silicon Valley, tech company owner Mohammed Khan buys his bagels with a wave of his specially equipped cell phone.

In Los Angeles, aspiring filmmaker Mike Hodgkinson uses his cell phone to shoot DVD-quality video, one of them for Rob Dickinson, former songwriter for indie band Catherine Wheel.

And in Italy, IT professional Robert Bernocco thumb-typed an entire 384-page sci-fi novel on his standard 12-button Nokia 6630 keypad during his daily train commute.

These days the gadget formerly known only for voice calls has mastered multitasking. Smarter phones lead an onslaught of wireless technologies creating the third revolution of modern electronics, following transformations wrought by the personal computer and the Internet.

The cell phone's worldwide conversion from voice device to high-tech Swiss Army knife includes contributions from engineers at Qualcomm, Kyocera, LG Electronics and other telecom companies.

In the five years since manufacturers added high-speed data connections to mobile phones, they've offered music downloads, text messaging, cameras, keyboards and other gadgetry as potential "killer applications" - must-have features that would compel consumers to buy new phones.

"Everybody's been looking for the killer app. ... " said Terry Yen, a marketing vice president at San Diego-based wireless company Qualcomm. "No one ever found one. It's looking more and more like the ability to buy a phone personalized to your needs is the killer app."

The United States has about 250 million cell phone subscribers - a number equal to 82 percent of the population - and many of them already embrace the cell phone's new roles:

- Frequent business travelers use phone cameras to help remember which ubiquitous rental car they're driving and the number of the night's hotel room.

- Some people have abandoned wallet photos of babies and pets and instead store slide shows on their phones.

- Subscribers to some security systems can monitor things at home by downloading images from home video cameras to their mobile screens.

- Pizza Hut recently announced a system for customers to text message their orders, joining smaller competitor Papa John's Pizza. In September, Domino's launched a service that lets customers order from Web-enabled phones.

- Parents subscribe to Global Positioning System services that track a child's location en route to and from school.

- Wristwatch sales have slowed - down 25 percent for Timex between 2003 and 2005 - as teens and young adults tell time by their phones.

- Schools struggle to rein in text-messaging teens and young adults, who chat electronically during class, sometimes as a high-tech way to cheat. A lot of schools ban cell phone use in classrooms.

Steve Jones, a professor at University of Illinois at Chicago who writes about technology and culture, said he sees his students text, watch videos between classes and update MySpace pages with photos shot just moments earlier.

"Students are going to ... move into the work force and continue to use their technology," Jones said. "It's the way of the future. I'd say we are now with the cell phone where we were at 10 years ago with the Internet."

But an estimated 30 percent of camera phones never snap a picture. Many keyboards never send text messages.

"If you look at all the nonvoice features, you see very low penetration rates," said Gartner analyst Michael King. "The iPhone changes that, certainly."

In six months, Apple has sold 4 million iPhones, a device in which voice calls are secondary to features such as playing music, displaying videos and surfing the Web.

Qualcomm has recently showed prototypes of gadgets that are half phone/half laptop. Powered by the company's Snapdragon chip, they have 1 gigahertz of processing power - plenty of horsepower to run new applications or better versions of existing features, such as cameras with resolutions up to 12 megapixels.

Qualcomm Chief Operating Officer Sanjay Jha said the emerging generation of "pocketable devices" is defined more by always-on Internet connections than by the ability to make voice calls.

His company's new chips can support downloads of up to 7.2 megabits per second - comparable to many home high-speed Internet connections - as well as navigation systems capable of updating maps and giving traffic information through a connection to a data network.

Consumer demand for mobile data will grow when networks and devices can deliver the full experience, Jha said. "The problem today is that wireless, such as Wi-Fi, is not ubiquitous enough and broadband is not broadband enough," he said.

Qualcomm envisions mobile devices with bigger screens than today's phones that would be capable of displaying GPS navigation and TV programming, including the company's MediaFLO broadcast programming and download services such as Verizon's V-Cast. The devices would be optimized for mobile commerce, with communications chips to execute credit card transactions and software to enable banking and shopping on the go.

There are three things that people have carried in their pockets for ages - keys, personal information and money - said Minnesota technology writer and futurist Jack Uldrich.

The cell phone has the potential to replace each of them, he said. Keyless entry is already common in autos and at businesses.

"Putting that (radio frequency identification) access into a phone to unlock your car and home is easy," Uldrich said. "The transition to digital cash will take longer."

Eventually, the phone could replace personal information such as driver's licenses, he said.

"Phones are going to get smarter and become real personal assistants," Uldrich said. "They're going to know the calls you want to take and the ones you want sent to voice mail. With GPS, they could know when your good buddy is a few blocks away and suggest you get together for lunch."

Credit card companies and many retailers have high hopes for mobile commerce. Several pilot programs testing "near field communications" (NFC) are under way on the East Coast and in Northern California.

Khan is owner and founder of Santa Clara, Calif.-based ViVOtech, a wireless commerce equipment company that is the hardware provider for the tests. He can use his NFC phone to pay at any retailer set up to use MasterCard's PayPass contactless payment system. A chip in the phone identifies Khan to the system at the register.

In addition to buying bagels, Khan has paid for his daughter's school supplies at Office Depot with a wave of his phone and wirelessly settled his tab with a New York cabbie. Any transaction under $25 is automatically authorized by his bank, no signature required. Larger purchases require the standard John Hancock.

While NFC is designed to speed up purchases, Khan is often delayed by curious shoppers.

"They ask me, 'What did you just do?' 'How did you do that?'" he said. "They want to look at the screen on the phone, which shows an image of the credit card. They're very interested. They're trying to understand what it is."

Skeptics say NFC has risks. Phones can be lost or stolen. Some say the signal from the NFC chip can be hijacked.

Advocates say biometric fingerprint readers or password protection resolve security questions.

The emerging wireless technology is poised for strong growth, particularly in technocentric countries such as Japan and South Korea, according to ABI Research. If it performs without security issues, it will win converts in the United States and Europe, the New York-based market research firm predicts.

The company estimates that there will be 500 million NFC phones by 2011, fueling an $870 million hardware and software industry - up from $260 million in 2006.

San Diego technology psychologist Larry Rosen, author of "Me, MySpace and I," said it's hard to predict exactly how wireless technology will change our lives but that the changes will be driven by the YouTube generation and not by their baby boom or Generation X parents.

"It took my generation 10 years to adopt the computer," Rosen said. "This generation adopted text messaging in two or three years.

"It's a whole generation of adopters. It's a generation that embraces technology. They've spent most of their life wired. They use everything."