My Phone/PDA Is Better than Yours

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from wired.com With Handspring and Palm preparing to market devices that will converge the technologies of cellular phones and personal digital assistants, it appears the race to be first is on. But such devices already exist. Chances are, most Americans have never heard of the Motorola Accompli phone, which contains an Asian-character-friendly keypad and is only shipped in Asia. They probably don’t know about the Nokia Communicator, which is popular in Europe, especially for sending short text messages. Neither of those is offered in the United States. The only one currently offered in America is the Kyocera pdQ smartphone, which contains a personal information-management system and interface similar to that of the Palm Operating System. However, to the dismay of users who prefer a sleeker and lighter phone, the pdQ weighs a heavy 10 ounces. Its price tag of $899 is also on the hefty side. “The pdQ wasn’t a particularly elegant product,” said Neerav Berry, vice president of marketing for cell phone comparative shopping site Cellmania.com. “It was big and clunky.” The upshot is that — for the vast majority of the American marketplace — they’ve seen nothing yet. That’s why Handspring’s recent announcement that its springboard module, which enables users to make phone calls from the Visor and will ship at the end of the year, could turn out to be significant. Same for Palm, which says early next year it will offer customers a snap-on attachment so they can make phone calls from their Palms. Palm also plans to partner with Motorola to develop within a couple years a smart phone that runs on the Palm operating system. Meanwhile, a Kyocera spokesman says the company isn’t discouraged by pdQ’s dismal sales. In fact, it has licensed the PalmOS to include it in its smartphone next year. “The pdQ was meant to be a demonstrator to the potential of a converged device,” Kyocera Wireless Corporation spokesman Rick Goetter said. “Who wants to carry around a phone, a palm device and a pager?” Handspring and Palm are betting that Americans won’t — but only if the “converged” product is sleek, efficient and reasonably priced. Cell phone vendors say that unless the prices for products such as the pdQ fall dramatically, smartphone manufacturers are going to wind up with a lot of phones on their hands. According to market research firm Strategis Group, cellular phone users are willing to pay, on average, $73 for a wireless Web-enabled phone and $59 a month for services. Thirty-one percent of the 409 users surveyed said they subscribed to wireless plans where they didn’t have to pay for the phone. “The media loves these phones because it gives them something to talk about,” Jesse Delia, a spokesman for CellularPhones.com, said of PDA phones. “The consumers like the idea of these phones because they are the latest in technology,” Delia said. “But when it comes down to it, the average consumer does not want to pay $200 to $500 for a phone.” Motorola has yet to put a value on its smartphone. But Handspring and Palm’s cell phone attachments both fetch $299, which industry members say they expect to be driven down by competition. “Palm devices have been successful and other handheld devices we are going to see will also be successful,” said Liz Altman, senior director of business development and strategic alliances for Motorola’s personal networks group. Altman echoed others in the industry, saying that Americans will take to the devices now that phone-service carriers have built the necessary infrastructure to accommodate products such as Web-enabled and PDA phones. Goetter said the pdQ hasn’t sold like Palms and cell phones because it was introduced two years ago when Code Division Multiple Access data services — a spread-spectrum digital cellular radio system that uses different codes to distinguish users – was unavailable in the United States. “The problem was CDMA Wireless Data services … didn’t roll out until September 1999,” Goetter said. “So the phone lingered for a year waiting for the necessary data services to be available and come to market as a full-featured device.” He added that American consumers didn’t see a reason to dish out cash for a device that allows wireless Web access, personal information management, and voice calls, which they perceived as useless. “People didn’t know what to quite do with so powerful a device,” he said. “Unless you need that function, it’s priced rather exclusively.” The pdQ alone costs $899. But it can be purchased for $699 with a Verizon Wireless two-year plan. But perhaps buyers would think it would be worth the money if it looked cooler. At least that’s what Delly Tamer of LetsTalk.com believes, noting there are folks paying in the $300 range for a phone alone. “The form factor is going to be key,” he said, addressing whether PDA phones will succeed in the future. “In my opinion, it (the new device) shouldn’t be shaped like a cell phone or PDA. If it’s shaped like a phone, the screen is too small. If it’s shaped like a PDA, it’s going to be too big to fit into your pocket. “We are urging manufacturers to think creatively and not just lump the two products together,” Tamer said. “It has to look cool.”

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