WEREN'T cell phones made for talking? That is so yesterday.
Cell phones are quickly becoming an on-the-go entertainment center.
And everyone from carriers to handset makers to software firms is jumping on the bandwagon.
Just look at the blitz of recent product introductions:
- Phones that double as MP3 music players.
- Phones that air broadcast news and TV shows.
- Phones that play movie clips.
- Phones that allow multiplayer gaming.
For business-minded users, there are phones that download e-mails with attachments at broadband speeds, phones that allow users to work in corporate databases and customer relations programs, and phones attached to cars that diagnose mechanical problems.
Never mind that 96 percent of mobile industry revenue comes from plain old voice telephone calls, according to statistics gathered by the Cellular Telecommunications & Internet Association.
"Voice is the core of the industry. But when you look at the growth in data revenue, then you see a very impressive trend in how people are adopting to the services available to them," said CTIA vice president John Walls, explaining the hype.
Industry revenue from transporting data — digitized content in everything from videos to e-mail to music and photos — grew 85 percent in the year ending June to $3.8 billion, according to the CTIA. It's still a small piece of the $108 billion in overall mobile revenues in that year, but voice revenues only grew by 4.5 percent, according to CTIA.
Analysts at M:Metrics and other research firms say that disparity is pushing carriers to pursue data services. In search of growth — that holy grail of business — carriers, handset makers and software developers are fast introducing non-voice uses.
Indeed, even hardware companies not before involved in telephony have introduced products.
To wit: Apple Computer Inc. launched the iTunes ROKR, an iTunes-capable mobile phone, with Cingular Wireless and Motorola Inc. Hewlett-Packard Co. is working on an iPaq Pocket service that uses GPS mobile technology to tell the history of where the user happens to be.
Verizon Wireless in the last month alone launched half a dozen new data uses for its network, including several gaming services, a smartphone with Palm Inc. and Microsoft Corp., a productivity application for wireless laptops, and an MP3 phone. And like its competing carriers, itlaunched a mobile TV service.
The average cell phone user produces $47.93 in voice revenues and $3.50 in data revenues per month. But last year, average revenue per user grew less than 1 percent even though average minutes of use grew 15.8 percent, according to the CTIA.
So companies are turning to data services to ring up more sales.
"What you see happening, on the business side or the consumer side, is the cellular phone or wireless device has become the primary communications tool for most people," said Richard Garwood, president of Verizon Wireless' Northern California and Nevada region.
"Look at college kids and high school kids — it's the main tool for their tribe. Also, in the business community people want everything on one device, so they don't have to carry pager, laptop, calendar," Garwood said.
Verizon Wireless invested $1 billion in the past year above its usual $4 billion yearly expenditure on network upgrades to add high-speed broadband capability. Verizon thus became the first cellular carrier to roll out a broadband wireless network.
Cingular and Sprint, the other two major wireless carriers in the U.S., quickly followed with announcements of broadband intentions. Sprint has already begun to roll out its broadband service.
While Verizon said it upgraded to broadband because subscribers wanted it, the carrier is not sitting around waiting for subscribers to decide to use it. Instead Verizon is spending millions of dollars to underwrite the marketing of games and music and business applications developed by independent software developers for use on its network. In the month of September alone, Verizon helped launch applications by Gameloft, Namco America, Dell Computer, Palm Inc. and Microsoft Corp. It also launched its own MP3 music player mobile phone.
Meanwhile, Nokia Inc., the largest maker of mobile handsets worldwide, did its own share of underwriting the marketing efforts of third-party developers who created software for its Series 60 platform.
Nokia estimates 1.5 million developers worldwide are creating software for its mobile phones and for smartphones made by its competitors Research In Motion, which makes BlackBerry,
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