In ten years, your cell phone, wirelessly connected to a calorie intake monitor on your wrist, will automatically detect if you're hungry, order your favorite food and have it delivered to your exact location. The process will generate billions of dollars in additional revenue for telecom operators.
Sound outlandish? It shouldn't. In fact, the technology required to make the described sequence of events possible already exists; it simply hasn't been fully integrated and marketed yet. Before it is, handset makers and cell phone carriers are trying to gauge consumers' interest in the new features.
The flow of announcements made at the Cellular Telecommunications and Internet Association (CTIA) trade show this week confirmed that the race to get multimedia equipped handsets on the market is heating up. Siemens announced three new upscale models with high-resolution screens and enough memory for users to download games, movie trailers and other applications. On the CX66, menu navigation is achieved by means of a joy stick. Networks are adapting too: At the beginning of the week Samsung and UTStarcom showed off a new technology called 1xEV-DV, which could, among other things, allow DVD and movie preview downloads.
"In the U.S. and around the globe, we're very much in an era of experimentation," says John Jackson, an analyst with the Yankee Group, a technology research firm.
So how likely are consumers to use their mobile phones as their babysitters, caterers, secretaries or portable televisions in the future?
If it's up to them, not very. Despite being barraged with ads flouting the latest smart phones, U.S. consumers indeed still say they are mostly looking for basic features. Only 6 percent of them would like to play video clips and 37 percent don't care whether their next phone has Wi-Fi, according to a recent survey by In-Stat/MDR, a technology research firm.
"People are looking for practical applications," says Neil Strother, the author of the report. They primarily want e-mail access and location-based services. "They want to know where the closest gas station is and how to get there." When asked what they would like to do on their phone besides make calls, only 11 percent of respondents said they would like to play games.
But the industry is hoping that will change as consumers wake up to the value of new applications as they come to market, the way it has happened in Japan for instance. "Who would have thought that text messaging would be the success that it is?" says Yankee Group's Jackson. "It's a classic case of supply leading demand."
Still, not all the features that take off in Asia and Europe enjoy the same success in the United States, as was the case with text messaging, which initially flopped here. Partly because of cultural differences, partly because it uses two standards, the U.S. has generally lagged behind Europe and Asia in terms of product and feature adoption.
But that is likely to change as the handset industry becomes ever more global. "The trend is definitely towards more uniformity," says Jackson.
So which sectors look promising in the U.S.? Phones equipped with Global Positioning System chips are triggering much excitement, especially since they could answer the consumers' hunger for more practical applications. These devices could potentially locate other users, get maps and receive point-to-point voice directions.
But the specific applications are much more easily imagined than brought to life, warns Jackson. "The biggest challenge for developers is to find ways of stitching all these technologies and services together to offer something meaningful to the user," he says.
This is what Motorola is proposing to do with a new technology called Viamoto, which essentially turns a cell phone into a navigation tool. After a user has called with the address of his destination, it provides him with turn-by-turn directions based on his location. From a user perspective, the service is attractive, but operators are unlikely to get rich on it. According to the In-Stat/MDR survey, 62.5 percent of users would only be willing to pay less than a quarter per use for such wireless services.
Although they are not new, camera phones will continue to drive significant growth. Last year, five million were shipped in the U.S. and about 50 million world-wide. In-Stat/MDR expects that number to double by 2004 to reach more than half a billion shipments a year by the end of the decade. Growth will be driven by two factors: picture quality, which is improving fast, with one and two mega-pixel phones becoming available this year, and the fact that all carriers are working on making it possible for their users to exchange pictures even if they don't use the same service provider.
Branding, which is already widespread in Japan with NTT DoCoMo and in Western Europe with the likes of O2 and Vodafone, will also gain importance in the U.S. It usually means that the operator's name is prominently displayed on the phone rather than that of the manufacturer. "It's a sign of the maturation of the market" says Johnson. Sprint PCS has already done some carrier-branded handsets and the Verizon Wireless brand, the mobile arm of Verizon Communications, has superseded Audiovox on some Get it Now handsets.
The evolution makes sense for operators who are looking to develop a look and feel for their brand to increase customer loyalty. "As we move forward, there will be more segment-specific and gender-specific handsets," says Michael Grossi, a principal with telecom strategy consultancy Adventis.
Asian manufacturers like Korea's Maxon are eager to provide such handsets to operators, but more vertically integrated suppliers like Nokia or Samsung have been more reluctant to embrace the trend.
The next few years should also bring an uptick in the adoption of converged devices that combine the features of a phone, a Personal Digital Assistant and a mini laptop like PalmOne's Treo 600.
Still, although the line is blurring between smart phones, which use an operating system, and feature-rich phones, not all phones will become multi-use devices. "A line will remain between the more business-oriented upscale phones and the mass market phones," says Grossi