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Cell Phone Madness

Why cell phones are replacing the laptop.
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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.

Philips, for its part, is readying chipsets to turn phones into AM/FM radios, or to receive digital satellite transmissions. Such gee-whiz features are aimed primarily at consumers and signal just how much change is coming to the plain old cell phone.

The price tag for such phones: between $450 and $800, with a service agreement, though prices are expected to drop in 2005. One word of caution: "Just because you can do all those things doesn't mean you wind up with a computer," says Seamus McAteer, senior analyst at the Zelos Group. One big problem with these new devices, McAteer points out, is the state of the wireless communications networks. As any cell phone user knows, there are still plenty of dead spots out there. What's more, most networks transmit data at 20 to 30 kilobits per second. That's much faster than networks were a couple of years ago, but even a slow DSL line runs at about 350 kilobits a second. Wireless providers like Verizon and Sprint are working to upgrade their networks, but until they do, viewing webpages on your superphone will take some patience.

Sophisticated Software

Still, software providers are hard at work, creating new platforms to make the process run more smoothly. Research In Motion and Good Technology, for example, are working on applications that will make it possible for smart phones to run heavy-duty corporate applications. And a host of other outfits, ranging from behemoths like Microsoft to tiny start-ups, are targeting the business smart-phone user. James L. Balsillie, chairman and co-CEO of RIM, predicts "astounding" changes here. "You're going to see a 10-times increase in application diversity," he says.

Here's a short list of what's on the way: Orative Corp., a start-up in San Jose, Calif., makes software that treats phone calls like e-mail, giving businesses the ability to send phone messages with subject lines, urgency tags, and status alerts (such as, "Always ring if it's the CEO"). Software by Chicago-based BridgePort Networks links cellular and corporate Ethernet networks, allowing cell phones to run on voice over Internet protocol. This will be particularly helpful if you're in a foreign country without the right kind of cell phone -- just plug the phone into your computer and use the Internet to make the call. BridgePort's software is currently being tested at several large phone companies, and it hopes to announce its first deals this fall.

Pulling It All Together

Making all this technology work together can still cause migraines, particularly for smaller companies that lack in-house tech talent. Fortunately, there are outsourced services from companies like Centerbeam, based in San Jose, and LAN Logic, based in Livermore, Calif., that will handle the heavy-duty network back-end and server software, so that smaller businesses can start using superphones without having to maintain the software. This is of particular use because it's still a challenge to get the software and hardware to work well together over cellular networks. "You can do a lot of stuff, but it's so complex and cumbersome," says Tony Davis, CEO of Tira Wireless, a Canadian company that publishes cell phone applications. Davis had hoped to see far more smart-phone applications available by now, but as is often the case with wireless anything, it's taken longer than expected. Still, he's convinced that 2005 will see the emergence of cell phones as serious business tools.

Webcor's Gregg Davis, for his part, expects to have more employees clamoring to exchange their notebook computers. It's easy to see why. Before getting their hands on the Treo 600s, managers at job sites would generally see e-mail only at the beginning and end of each day. Now, they're in touch throughout the day. And it's not just e-mail messages. While traveling one day, for example, Davis needed to look at a sophisticated network topography diagram. The document was far too large and complicated to view on the Treo's tiny screen. But rather than cursing himself for leaving his laptop behind, Davis downloaded the document, put it on a flash-memory card (a sort of portable and tiny hard drive), and then viewed it on a nearby PC with a bigger screen. Not a techno demotion, after all.

Last updated: Sep 1, 2004




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