Experts debate all-in-1 phones
Posted on Monday, October 9, 2006
SAN JOSE, Calif. — As a deep bass thumps in the background of a TV commercial, a rich voice describes a sleek device that seemingly offers everything, from simple calling to a mobile music player.
It’s a seductive image: One device that can be used as a phone, navigator, computer, camera, video player and mobile music library.
“Part MP 3 player. Part phone. Totally sweet,” the voice purrs.
Welcome to the increasingly ambitious world of mobile phone competition, where industry executives — unsure of what consumers will pay for — hope to win them over by adding more functions to their cellular mobile phones.
With more than 72 percent of the U. S. population already using mobile phones, the industry must introduce new functions to keep consumers buying new models and spending more money on applications such as text messaging, Web browsing and video games. Analysts say that over the next few years consumers can expect to be bombarded with new designs and functions.
The industry debate centers on how much consumers really want in a phone. Some industry executives say they believe the mobile phone of the future will replace other mobile devices. Naysayers say consumers are willing to carry multiple devices for better quality.
“People in general would rather carry less things, but we know the consumers will carry up to three things,” said Michael Gartenberg, analyst with Jupiter Research. “It’s about secondary features that are good enough to use in a pinch, but you’re not going to use as a primary. The worst camera in your camera phone is still better than the best phone [without a camera ] you leave at home.” The first mobile battleground will be over the music sector, said Martin Kon, a director at Mercer Management Consulting, which surveyed 300 mobile industry executives recently.
About 70 percent of wireless dealers and retailers said new MP 3 phones, such as the Verizon Chocolate introduced this summer, will replace standalone music devices such as the enormously popular Apple iPod series.
The Chocolate can hold as many as 1, 000 songs compared with an iPod nano that holds as many as 2, 000 songs.
Apple does not appear to be sitting on the sidelines.
During the Cupertino, Calif., company’s most recent quarterly earnings report, Chief Financial Officer Peter Oppenheimer breathed fresh life into an old rumor of a potential iPhone.
“We are very confident in our ability to compete in the marketplace. And we’re very excited about what we have in the product pipeline, and you know that I can’t comment on that,” Oppenheimer said in response to an analyst’s question about the company’s reaction to Sony’s Walkman phones.
“As regards to cell phones, we don’t think that the phones that are available today make the best music players,” he said. “We think the iPod is. But over time, that is likely to change. And we’re not sitting around doing nothing.” An Apple spokesman said the company does not comment on “rumors and speculation.” But Gene Munster, a technology analyst with Piper Jaffray, recently said in a research report that there is tangible evidence an iPhone is coming.
“It’s going to happen, what’s new from all the talk in the past 14 months versus today, you have the company suggesting it’s real and documentation in iTunes 7 that it’s coming,” Munster said, referring to developer notes about the new version of iTunes.
The iPhone would probably work closely with Apple’s iLife program and include a camera, video capture feature, video player as well as a contact area that could tie in with the Apple address book, Munster said. He predicts it will be introduced early next year.
The makers of what are known as smart phones such as Palm Treo and the BlackBerry warn that no one phone can do everything well.
“There is a trade-off continuum among all devices between different features,” said Mark Guibert, vice president of corporate marketing for Research In Motion, makers of the BlackBerry. “You have to decide which elements of the puzzle you’re going to maximize and which elements you’re going to trade off.” Guibert, like other makers, predicts the market will remain fragmented because some consumers will want better more specialized phones, focusing on better e-mail, for instance, rather than a jack-of-all-trades.
Jason Rubinstein, head of product strategy for entertainment at Motorola’s mobile devices unit, said phones typically focus on one function because people typically fall into somewhat well-defined categories.
As the mobile industry debates what functions and designs work best, Mercer’s Kon said consumers will win with a plethora of choices.
Then again, not all consumers want choice.
Sitting outside a Starbucks recently taking phone calls, San Jose resident Jerry Johnson said he simply doesn’t understand why there are so many functions on phones.
“For me, there’s too much on them now,” Johnson said. “I want them very simple: ‘hello, goodbye’ and voice mail.”
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