Do-it-all cell phones may not sell
By Brian Bergstein
Associated Press
NEW YORK — Everything is tight in the cell phone industry.
Bloomberg News Service
The market is nearly saturated. Talk is cheap, literally: Someone is always stealing customers by offering more minutes for less money.
Ayako Terano, an employee at a mobile phone shop in Tokyo, holds an NTT DoCoMo FOMA 3G phone that has the ability to show movies, along with call-forwarding and call-waiting capabilities.
Wireless carriers would like to consolidate, but the industry is entangled in debt and shackled to incompatible network systems.
So how are cell phone companies trying to fight the squeeze? By squeezing more stuff onto cell phones.
Digital pictures, instant messaging, Web access, e-mail, downloads of cutesy icons, elaborate ring tones and tons of video games — anything that lets people save time or kill time, as some in the industry put it, is being crammed onto phones in hopes that consumers will pay for it.
In Japan, wireless phone companies such as DoCoMo have adopted such tactics with success, boosting their subscriber base. But whether it will work in the United States — or turn out to be the next big money-draining bust for the industry — remains to be seen.
"The idea is, 'Let's see what we can throw on the wall and see what sticks,' " said Ken Hyers, senior wireless analyst for Cahners In-Stat.
Verizon Wireless is hoping for a bounce from its new "Get It Now" service, which lets people download dozens of ring tones and video games directly over the air. The downloads start at 99 cents and suck up airtime. Playing the games doesn't use any minutes. But Verizon hopes that users someday will want to play games head-to-head over the network against friends, which would sap airtime.
Other new cell phones have camera attachments that let users take digital pictures and send them to other phones or e-mail addresses.
Sprint PCS, which recently surprised analysts by announcing its customer base actually shrunk, now plans to sell models with the camera already included.
For now, many numbers don't look good: Only 8 percent of cellular customers are definitely interested in using their phone or another device to get wireless Internet access, according to a July survey by Solomon Wolff Associates, a New Jersey-based market research firm. The figure was 18 percent in January 2001.
