They’re already part of life. Now, business is betting billions on a new breed of wireless wonders that will put the Net in your hand.
Paul Marsden is what marketing people covetously call an “early adopter,” likely to be the first on his block with the latest must-have gadget. Working part time as a disc jockey while still in high school, Marsden convinced his parents to let him have (and pay for) his own cellphone. After graduating from high school last spring, the 18-year-old from Calgary found full-time work in public relations—and promptly upgraded to a sleek new handset about half the size of a pack of cigarettes. “I can get and send faxes and e-mails,” he enthuses. “It’s got voice activation, so I can speak to it and tell it what to do.” Marsden says his personal phone has quickly become “a big part of my life. I’m never two steps away from it. It’s kind of sick, but that’s the way it is.”
Behold the new über-device. Love them or hate them (and plenty of us do both), cellphones are here not just to stay, but likely to conquer much more of our public and private lives. Even as Canadian providers roll out a new breed of Internet-enabled cell phones this holiday season, they are already finalizing plans for even more advanced, so-called third generation services, which will begin trials in some North American cities next year. With features like go anywhere e-mail, onboard date books and the ability to download videos on demand, next-generation handsets are designed to become as personal and ubiquitous as wristwatches—with powers that would surely astound the lantern-jawed Dick Tracy. Big companies are betting billions that Canadians will find them irresistible.
Many, of course, would say they already are. Rare is the city street where at least a few hands are not raised to ears as students, shoppers and suited executives stride along engrossed in seemingly one-sided conversation.
Sales reps on the road swear by them. People use them to call home from the video store about tonight’s rental, or to check that their cell-equipped teenager is OK (a feature of rock concerts now is the sight of hordes of parents in cars calling emerging kids to figure out where to meet). Some users don’t even bother to get a landline. By all appearances, the cellphone has truly arrived.
Yet only one Canadian in four actually carries one—compared with more than 70 per cent of the citizens of Finland (page 41), nearly 60 per cent in Britain and more than 40 per cent of Japanese. Barely one in a hundred Canadians uses a cellphone to connect to the Internet. But that is changing. As the price of calling goes down and handsets become more powerful, analysts expect worldwide cellphone sales to triple by 2003. Over the same period, Convergence Consulting Group Ltd. of New York City expects the number of Canadians going online from a wireless phone to jump 25-fold.
As the use of the increasingly colourful—and increasingly complex—handsets spreads, their often-unexpected repercussions on Canadian life will only become more intense. Many people first acquire their cellphones in order not to be out of touch in an emergency. That same “always there” quality continues to propel the devices’ impact, in ways ranging from laughable to potentially lethal.
In the first category, consider Allan Kobelansky’s experience. Last summer, the Montrealer answered a call on his cellphone to hear only muffled noises coming from the handset. “Then I sort of recognized some groaning,” the 39-year-old engineer recalls. “A good friend of mine was in the backseat of his car making out with his girlfriend. I happened to be No. 1 on his speed dial. His buttocks pressed the button.” The call from the unlocked keypad lasted another 15 minutes.
Less amusing for many is the growing intrusion of trilling cellphones into public places. Actor Laurence Fishburne got one of his warmest ovations during a New York City run of The Lion in Winter when he stopped in mid-scene to bellow from the stage at an inconsiderate audience “Will you turn off that f_____g phone, please?”
No less a hostess than Queen Elizabeth II has banned mobiles from luncheons, dinners and other state occasions at Buckingham Palace.
Where to draw a line in the air is an especially taxing question for upscale restaurants. Geoffrey Howes operates three top-end Vancouver-area establishments and chairs his industry’s provincial association. At his Aqua Riva restaurant in downtown Vancouver, Howes says, “most of the customers that you want, who obviously spend money on good food and wine, expect to be able to use a cellphone. To tell a patron they couldn’t use one—I actually don’t think anybody would have the cheek to do it.”
Darren Van Buskirk does. He manages Calgary’s Wildwood restaurant, where the signature game platter (quail, buffalo roulade and caribou sausage) commands $23.99 on a menu that carries the discreet notation: “We are a cellular-free environment.” Argues Van Buskirk: “Everyone has voicemail. For the hour or two that you’re dining, you can go without communication. People say it’s a great idea.” Another way is being pioneered by a New York restaurant named for Manhattan’s new telephone area code. At VOX 646, diners are invited to make or take calls in a separate cellphone lounge.
Manners are one thing; safety is another. Last week, Toronto police Chief Julian Fantino became the latest critic to call for a legal ban on the use of cellphones by drivers. Researchers at the University of Toronto calculate that using a phone while driving quadruples the chances of an accident. Yet as many as 85 per cent of users in other surveys have admitted to the dangerous conduct. Fantino’s call would align Ontario with governments in Japan, Britain, Spain and Brazil, which have already banned phones behind the wheel.
For emergency personnel, cellphones have become standard equipment as back-up to radio communications. In a program sponsored by the B.C. attorney general, Vancouver’s Battered Women’s Support Services lends specially configured cellphones to women believed to be under threat of violence from estranged partners. Although counsellors warn women not to draw a false sense of security from the devices—which are programmed to call only 911—spokeswoman Meena Dhillon says: “Women do feel safer when they have the phone.”
A hazard of another kind arises, paradoxically, from something many cellphone vendors promote: keys that can be programmed to dial 911. Accidental strikes on such keys have set off a flood of false alarms to emergency-response centres. “It’s a huge problem,” says Russ Sanderson, operations manager at E-comm Inc., which handles 3,500 calls a day to police, fire and ambulance services in the B.C. Lower Mainland. About 40 per cent of calls from cellphones are unintended, causing an average of 420 time-consuming false alarms a day for hard-pressed 911 operators. “We requested that cellphone companies not preprogram the numbers,” says Sanderson. “They refused. They see it as a selling feature.”
At the same time, Sanderson points out that Canadian cellphone vendors are under no obligation to offer another feature that will begin appearing in American cellphones next year. Called “location tracking,” it will allow service providers to know, within a few metres, where a call is coming from—critical information for emergency teams. Washington has ordered cell providers to implement location tracking by mid-2001.
Canadian carriers face no such deadline. But market forces may make it happen in Canada anyway. Executives of cellphone companies see location tracking as one of two key foundations for the “killer apps”—applications they believe will ensure the industry’s future. The other is higher-speed connections for digital phones.
ANSWERING THE CALL
Big and rugged, small and sleek, or just plain cute, the latest cellphones do much more than call home. A sampling of what’s on offer from Canadian providers, or on the way:
At last: you may be able to do without a personal organizer. This tiny phone stores 250 names, numbers and e-mail addresses and keeps track of up to 50 appointments, with an alarm reminder. It can also respond to short text messages on the five-line display, predicting words from one or two keypad strokes. You can download hundreds of ring tones. Typical price: $179.
Ericsson R250d Pro Feeling nostalgic for the big cellphones of the 1980s? This one, nicknamed The Rock, has a similar heft, but it’s way tougher. About the size of a small walkie-talkie, the $479 R250d can be used I in heavy rain, withstands A “common impacts’’ and t shrugs off a brief dip in the H lake. It has a two-way radio HI for group calls, and a » speakerphone frees your hands to fix that stalled snowmobile or stoke the campfire.
With the faceplate closed, it looks pretty much like any other new phone. Opening it, however, reveals a large, touch-sensitive “landscape display” for writing and reading e-mail, or checking the calendar and address book. The R380, expected to retail for about $699 early next year, recognizes handwriting, is equipped for Internet access and has a built-in infrared port for syncing with a PC. Voice-recognition technology allows you to dial a number or answer an incoming call, finger-free.
This is more than just a pretty faceplate, although it has a slew of colourful choices. The Web-ready phone, typically $75, doubles as an FM radio. Users can preprogram up to nine stations. Earphones (included) can also be used with the phone for hands-free talking. The radio automatically mutes itself when someone calls.
Samsung SCH 8580
If small is your thing, Samsung’s SCH 8580 may be for you. Billed as Canada’s smallest dual-mode, dot-com ready flip phone, the SCH 8580, at $199, is both stylish and discreet. It offers voice-activated dialing and up to 229 entries in its directory. Want to be reminded of an errand that needs running? Just record a voice memo to yourself. A microbrowser offers access to the Web on the unit’s bright display.
Nokia concept ‘device’
This is where the future seems to be going. Nokia calls its vision a “personal trusted device.” But to work, it will require the large streams of data promised by the third-generation-3G-networks due in Canada in two to three years (currently we’re on 2G). As envisioned, this multimedia communications link would feature messaging that incorporates digital images and video clips, coupled with either text or voice annotations. Naturally, it would do most of the things a personal organizer does. And you can call home.
Even on the latest Internet-equipped mobile phones, those connections now crawl along at about the same pace as an old-model dial-up modem on a home computer: 9.6 to 14.4 kilobits per second, or kbps. But beginning some time in late 2002 in Canada, and perhaps a year earlier in the United States, that trickle is expected to become a virtual torrent. As carriers install what is called third-generation—or 3G—cellular equipment, data speeds will exceed 384 kbps and approach the quicksilver two megabits per second rating of office networks. (1G was the first generation of analog mobile phones, 2G refers to current digital devices, while makers have coined 2.5G to describe an upgraded system for Internet-enabled handsets that will be available next year.) Higher speeds will let 3G cellphones—also known as broadband—perform far more tasks than today’s versions do.
Probably the grabbiest of those new talents will be displaying digital video streamed over the Internet, as if there is a TV set in your hand. But phone companies and leading handset makers like Finland’s Nokia and Sweden’s Ericsson have much more in their plans. Concept phones, unveiled at the giant COMDEX computer trade show in mid-November in Las Vegas, featured colour screens as big as those on current-generation “personal digital assistants,” like the Palm or Pocket PC (and larger than that of the Canadian-made, e-mail-equipped RIM BlackBerry two-way pager). Next-generation cellphones will also rival those devices by sporting personal-calendar and address-book software, as well as fast Web access. Accessories will allow them to share files, such as address lists, with a PC, and act like a digital music device, playing through a phone earpiece. And then there’s that ability to know exactly where it is at any moment in time, which could be both a good and a bad thing.
To leaders in the telecom business, it is a combination that adds up to the killer app of the next decade. One senior executive preaching the wireless gospel at COMDEX was John Zeglis, chairman and CEO of AT&T’s Wireless Group. Zeglis said his company has invested $6 billion in its network this year, expecting that use will soar. “Something more than wireless, more than the Internet, will happen when we put the two of them together,” Zeglis told his Las Vegas audience. “Well have something that can change lives more than the wired Internet has.” To illustrate, Zeglis screened an AT&T-produced vision of the unwired—but always on—future. In it, a child is injured on a remote peak. Rescuers review his medical file, delivered to their phones via the Internet, en route to the accident scene. Once there, they use their phones to stream vital signs back to the hospital, and to a doctor racing up to the mountain following maps that track his position on his own cellphone.
Needless to say, that is not all Zeglis and others expect from their investments in 3G. Instead, they count on getting a small slice of millions of commercial transactions, each tailored to some individual phone user and often to their precise location. Like what, exactly? Even evangelists like Zeglis admit that precise business models are still in development. “If you’ve got an idea,” he told COMDEX-goers, “give me a call.”
Meanwhile, several potential disconnects lie in wait between here and a clear 3G connection. One is the tangled matter of technical standards. After adopting a patchwork of proprietary specs for 1G and 2G telephones, Canadian networks—and their cellphones—generally don’t work with systems in Asia and Europe.
Some operators must now decide whether to stay with their existing technology, or adopt 3G specs in wider use around the world.
Then there’s the money. To operate cell networks, companies license radio spectrum from governments. It used to be virtually free. But in the past decade, governments realized they could profit hugely by putting it up for auction. In April, winners of one batch of spectrum in Britain paid $50 billion for their prize. In August, spectrum in Germany drew bids worth $66 billion. Since then, industry observers have questioned whether investors will be able to bear the combined cost of spectrum and expensive new wireless networks without buckling. Industry Canada's next spectrum auction is in January and analysts will closely watch what companies pay.
Adding to the carriers’ troubles is another quirk of the marketplace, where companies long ago got into the habit of attracting new subscribers by subsidizing the cost of their handsets. Canadians grew accustomed to getting cellphones, which often cost the companies $300 or more, for as little as $0, as the ads say. Now, more sophisticated handsets wholesale for close to $500 and carriers are eager to close the gap.
Marketers, meanwhile, will keep their eye on how consumers respond to the first wave of Internet-by-phone services, offered by some Canadian providers since earlier this fall. Users encounter screens offering such items as instant stock quotes, online banking and Web-based news. But surfing by phone is not yet the colourful sensory experience it is on the desktop. For one thing, only about 24,000 of the Web’s two-billion-plus pages of information have been reproduced in Wireless Application Protocol, or WAP, which reformats their content—text only—for the smaller cell screens. Most reviewers also consider WAP—adopted widely in North America and Europe—inferior to the competing i-mode standard, deployed by Japan’s NTT DoCoMo. And even i-mode’s boss, Keiichi Enoki, said last week he thinks many telecom companies have overestimated just how snazzy—both technically and financially—3G will be.
Maybe cellphone nirvana won’t happen as fast as AT&T’s Zeglis and others like him believe. Even so, an estimated 4,700 Canadians a day add their voices to the wireless conversation. One of them may be sitting at the next table right now. For better and worse, cellphones have entered the culture and they’re not about to shut up and go home.
With Brenda Branswell in Montreal, Danylo Hawaleshka in Toronto and Brian Bergman in Calgary