Cell Phone Madness

Why cell phones are replacing the laptop.

At first glance, it seems like a bad deal, a kind of techno demotion. But Gregg Davis, CIO of Webcor Building, a San Mateo, Calif., construction company, is making the pitch anyway: You give me your notebook computer, he's telling his employees, and I'll give you a new cell phone.

Of course, these are no ordinary phones. They're more like hot rods, supercharged beyond recognition. Packed with 32 megabytes of memory, a 144-megahertz processor, a thumb keyboard, and a 1.8-inch color screen, the slick-looking devices come loaded with Palm organizer software and a Blazer Web browser, and can run Microsoft Outlook, Word, Excel, and other core business applications. Users can read and send e-mail, view PDFs, inspect and make changes to documents, review change orders, and even pull up drawings to inspect with architects at construction sites. They can also call the office to check voice mail. "I feel more connected than I did with my notebook," says Webcor CFO Tim J. Lutz.

The phone is a Treo 600, made by Handspring, and so far about 20 Webcor employees have traded in their laptops for one. Davis sweetened the deal by throwing in a new desktop computer, but each trade-in still saves Webcor money. The price of its standard notebook, about $1,800, is more than the cost of a Treo and a typical desktop combined. What's more, support costs for notebooks run much higher than for desktops, while cellular communications costs have gone up only about $10 a month per user.

Just a year ago, it would have been difficult, if not impossible, to do what Webcor is doing. There were some decent handheld e-mail readers, notably the BlackBerry from Research In Motion, based in Waterloo, Ontario. But it was hard to get other applications on the screen, and the devices didn't work very well as cell phones. As a result, most executives traveled with a PDA, a mobile phone, and a notebook computer. But so-called "smart phones" like the Treo 600, which hit the market about a year ago, are beginning to change that. In 2004, just 9% of the cell phones shipped in North America were smart phones. In 2005, the number is expected to hit nearly 18%, according to the Zelos Group in San Francisco. "People who access information and respond to it in, say, small e-mails, are going to quickly find that they don't need their notebooks," says Andrew M. Seybold, president of Outlook4Mobility, a consultancy in Santa Barbara, Calif. Even people who write reports and perform data entry tasks will find themselves leaving the notebook behind on trips of less than three days, Seybold says.

Even people who write reports and do data entry will find themselves leaving their notebook computers behind.

Laptops, of course, aren't going away anytime soon and for some kinds of employees, never will. No smart phone is smart enough to run animated PowerPoint presentations or be used for, say, three- or four-dimensional modeling. But thanks to a confluence of technology trends -- better hardware, faster cellular networks, more sophisticated software, and a new ability to make them all work together -- more road warriors will be leaving the laptop behind.

As these four trends gather steam, expect this year's smart phones to become next year's superphones.

Cooler Hardware

Danny Shader, CEO of Good Technology, a Sunnyvale, Calif., outfit whose Goodlink software has helped transform cell phones into smart phones, expects to see an explosion of such devices over the next year. These phones will be packed with as much as 500 megabytes of memory and come in a menagerie of shapes and sizes. Many will feature color displays, which will be brighter and easier to read. Keyboards -- whether the "thumb-boards" made popular by BlackBerry or new, unusual slide-out designs -- will be commonplace. Motorola's MPX smart phone, due out later this year, is one of several phones that will open up to look like miniature notebook computers, right down to the QWERTY keyboard. Seimens, for its part, is taking the keyboard in even weirder directions: The company is developing the SX-1, a phone that uses a laser to project a virtual full-size keyboard onto a flat surface.

There's more. Nvidia, beloved by gamers for its superfast graphics chips, now makes chipsets for cell phones, which will allow videoconferencing and let you download and view video-based presentations. Intel has developed similar technology. Meanwhile, processors for phones are getting faster, headed toward the 600-megahertz range. That's slower than many desktop and laptop computers but still fast enough to read e-mail and run many Web applications and basic documents. Also on the way: dual-mode Wi-Fi phones, which can switch between a cellular network and a company's own computer network.

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