NEW ORLEANS – The cell-phone industry is confident in itself. In fact it's downright cocky.
After experiencing record growth in sales – the industry was worth $76.5 billion at the end of last year, according to the Cellular Telecommunications & Internet Association – cell-phone makers said they expect to ride that success well into 2003. Despite an economic recession, manufacturers released dozens of sleek new handsets at the CTIA show here this week.
Vendors have done away with voice-only phones and are betting that consumers will pay a little extra to have a PDA, GameBoy or a digital camera – or all three – built into their wireless handsets. In particular, cell-phone makers are banking on customer demand for short messaging service, known as SMS, and for the ability to snap and swap pictures wirelessly.
John Koo, chairman and CEO of South Korean cell-phone maker LG Electronics, said he expects the industry to sell 37 million camera/cell-phone combos this year – twice as many as last year, according to market research firm Strategy Analytics.
"I am pretty sure that soon people will say, 'How did I ever live without it?'" Koo said.
A first for LG
Koo's company, which already sells handsets to Sprint PCS and Verizon Wireless, plans to stretch its reach in the American marketplace by selling cell phones to AT&T Wireless, Cingular Wireless and T-Mobile that all operate on a competing infrastructure called GSM (global system for mobile communications), which is the most common network standard in the world.
But Sprint and Verizon, which together account for a huge chunk of market share in the United States, operate on a network infrastructure called CDMA (code division multiple access), which is not compatible with GSM.
LG is out to capture some GSM users. The company turned heads with its new 4050 GSM phone: a compact, fold-up device with a digital screen in its outer shell that displays the time and blinking colored dots that roll across the screen like an electronic stock ticker.
The phone has a full-color liquid crystal display, basic PDA functions like a calendar and address book, support for Java applications and the ability to send and receive pictures with text – multimedia messaging. No price has been set for the phone, a company spokeswoman said.
"We try hard to make our phones fashionable," Koo said.
Nokia N-Gages in games, CDMA
Meanwhile, the industry behemoth and leader in the GSM market is salivating over the prospect of winning over CDMA users.
Nokia (NOK), which has introduced a mere 12 CDMA handsets in the last 12 years, said it is adding five more to its product line.
The 2200 series – the Nokia 2270, 2280 and 2285 – are entry-level handsets that use CDMA2000 1x technology. It's the next-generation of CDMA technology that lets users send data wirelessly at speeds of up to 2 Mbps.
The phones have black-and-white screens and built-in GPS chips to allow emergency dispatchers to locate callers when they dial 911. Nokia spokesman Keith Nowak said he expects the phones, which will hit wireless retail stores sometime in the second quarter of this year, to sell for under $100.
Nokia also released higher-end CDMA phones. The Nokia 3586i, which Nowak expects to sell for between $125 and $175 when it hits stores in the second quarter, has a full-color screen. It supports Java applications, polyphonic ring tones that sound closer to music than actual ringing and graphical caller ID icons to represent individual callers.
The Nokia 6585 offers all the features of the 3586i, plus an integrated FM radio and built-in speakerphone. This phone won't appear in retail stores until the fourth quarter and probably won't sell for less than $200, Nowak said.
Making handsets for CDMA infrastructure is much more difficult than building phones for GSM networks, Nowak said.
"For CDMA, you have to engineer the phone for the carrier," Nowak said. GSM, on the other hand, doesn't require the cell-phone manufacturer to make different phones for different carriers.
Nokia also gave an encore demonstration of a new GSM phone called N-Gage, which it first announced at the Game Developers Conference earlier this month in San Jose, California.
Geared toward gamers, N-Gage looks more like a GameBoy than it does a phone. With the screen in the middle, flanked on both sides by game controls and a numbers pad, the user holds the device horizontally.
Built-in Bluetooth, a wireless technology that has a 30-foot range, allows users to take on opponents who are in the same room. Gamers can play each other around the world over the cellular network.
Pricing for the device has not been set, but Nokia expects it to hit stores by the end of the year.
On Nokia's heels
Motorola (MOT), the world's No. 2 cell-phone maker, also kept gamers and the CDMA market in mind when it introduced new products at CTIA.
The company released the E310, a full-color CDMA handset that has a five-way navigational key that acts as a joystick. To mimic the gaming experience, the phone shakes, vibrates and can produce the sound effects of a shooting game. The phone also comes with an integrated MP3 player and FM stereo.
The V810 is a CDMA phone with even more capabilities and a screen that supports up to 260,000 colors. It comes with an embedded camera with flash, multimedia messaging, the ability to download games and picture caller ID. The phone packs these features into a sleek, silver case.
Motorola did not release the new phones' prices, which will be set by the individual carriers.
Samsung gets smart
Starting in a couple of months, Sprint PCS (PCS) will sell Samsung's SPH-i700, a combination Pocket PC and PCS smartphone.
The phone, powered by Microsoft's Pocket PC Phone Edition operating system, is geared toward business users, Sprint PCS officials said. The phone contains all of the Microsoft Office programs and allows for multi-tasking: Its speakerphone lets users conduct conference calls while simultaneously checking their e-mail. The phone also has a voice memo recorder, a built-in digital camera, and can send text attachments with images through e-mail or an infrared connection.
Sprint will also start selling Samsung's SPH-A600. The phone's rotating flip cover with color screen allows users to watch short video clips while the cover is closed. The SPH-A600 also has an integrated camera with flash and 4X zoom.
Sprint said it has not yet determined the new Samsung phones' prices.
Siemens shapes up
After losing its No. 3 position to Samsung last year, Siemens went back to the drawing board to come up with the phone it announced this week the CTIA show.
The SXI is a world phone that works on GSM networks in the United States and abroad. It also has an integrated camera.
But the phone stands out because of its design: The number buttons are split and laid out on either side of the phone's large color screen; a scroll bar is situated in the middle. Users who take pictures hold it like they would a camera: vertically to snap portraits and horizontally for landscape shots.
Despite the large screen and built-in camera, the phone fits easily in the palm of a hand and weighs only 4 ounces.
The phone also contains a built-in video player, camcorder and FM radio. Siemens said it is the company's first smartphone.
Kyocera comes out swinging
No one introduced more cell phones at the show than Kyocera Wireless. The San Diego, California, cell-phone maker showed off nine new phones.
It also scrapped traditional model numbers and gave the devices catchy names like Phantom, Blade, Kurv and Slider.
"We've always played well with high-end users and well on the low-end of the market," said Kyocera spokesman John Chier. "But not much in between."
For the low-end market – customers unwilling to break the bank to purchase a cell phone – the Phantom will be available by summer for under $100. A black-and-white phone built for CDMA2000 1x networks, the Phantom lets users change the color of the screen's plastic border by popping out the face plate. It's also got a built-in GPS chip.
Kurv, expected to hit retail stores in the fall for between $200 and $250, is geared for the teenage market. The phone has a peculiar, curved shape and its functions are based on detachable smart "skins" made by a company called Wildseed. The removable skin – essentially a plastic outer shell – lets users change phone characteristics such as the ring tone, screen images and display color. One of the skins includes a joystick and buttons so users can hold the phone horizontally and use it like a Sony PlayStation controller.
Kurv's basic skin allows users to place calls and send and receive short text messages. Users can upgrade skins to play games, hear music and access other features for an extra $25 to $40 each.
The Slider is a high-end CDMA2000 1x world phone that will be available for under $200 this fall. The phone has a full-color screen and slides open to reveal its keypad. Users can surf the Web, play games and store personal contacts and calendar info as they would on a PDA. It also has a GPS chip and a built-in speakerphone for hands-free conference calls.
Playing around with Sony Ericsson
With the T606, a cell phone customized for gaming, Sony Ericsson has jumped into the phone-as-entertainment-device market. The T606, which is compatible with CDMA2000 1x systems, has a full-color screen and lets gamers use the phone's scroll wheel and numbers keypad simultaneously to run and shoot at the same time. It also has polyphonic ring tones for sound effects.
Sony Ericsson spokeswoman Nicky Csellak-Claeys said the phone should be out within the next two months but couldn't give details on pricing.
Linux in Sharp focus
Electronics maker Sharp said it would release a Linux-powered PDA that is compatible with CDMA2000 1x wireless networks in April. The company plans to sell the SL-5600 handheld computer, which has a full-color screen and slides open to a miniature keyboard, through online resellers for $500. The cost of a wireless modem for e-mail and Web access, however, could add another $200 to the price tag, according to company spokesman Randy Dazo.
Dazo said the SL-5600 represents Sharp's commitment to the Linux operating system, "especially with a lot of servers being Linux these days," he said.
The PDA has your basic personal information management functions like calendar and address book plus business applications like spreadsheets and a text editor.
RIM's call
RIM, designer of the BlackBerry e-mail devices, wants its share of the cell-phone industry's success.
The company was at the CTIA show flaunting its new BlackBerry 6210, a sleek blue e-mail device with voice capabilities that will hit stores sometime in the second quarter. Unlike RIM's previous models, the 6210 is lighter than ever (4.8 ounces), features a case color other than black, and stocks 16 MB of memory versus the typical 8 MB of previous models. The 6210 also has a USB port so users can synch the device with a PC and a headset jack to make and receive phone calls.
The device is compatible with GSM and GPRS (general packet radio service) networks around the world.
Wireless carriers will determine pricing for device, a RIM spokesman said.
