Perhaps no mobile communications device has captured the public imagination quite like Dick Tracy's two-way wrist radio. Small, portable and efficient, the hook-nosed detective's trademark gadget exemplifies what we want in a personal communications system. Fifty-five years after the fictional wrist radio first appeared on the comics pages, real-life mobile phones are only beginning to approach its miniature form factor.
But to make up for the delay, carriers are also starting to offer far more than simple two-way voice communications. Internet access, multimedia and data applications are making their way to the next generation of mobile phone equipment, allowing for capabilities Dick Tracy never dreamed of.
There's just one problem: Nobody seems interested.
That is, not in the United States, at least. While several Asian countries are pressing ahead with the transition to high-bandwidth third-generation (3G) phone networks, and Europe is going gaga over Short Message Service (SMS) messaging and other data applications, U.S. mobile subscribers seem largely apathetic.
A new category of services known as "voice portals" now aims to bring information and commerce applications to mobile phone consumers through a decidedly old-fashioned interface: plain old speech.
Here's how a typical voice portal interaction might work. You dial a certain number on your mobile phone, and you're connected to a computerized voice that asks what it can do for you. When prompted, you inquire about your favorite stocks by name, and the disembodied voice responds with a current quote. Then you ask whether you have any e-mail messages, and if you do, the voice reads them back to you.
The range of applications voice portals will be able to offer will increase as both speech recognition and speech synthesis technologies improve. But some analysts are hoping that the new category will break the disturbing trend of consumer apathy toward wireless data services.
American mobile carriers have been trying other tactics to interest customers in these services for years. They first began offering advanced data-based wireless service options, such as the Wireless Access Protocol (WAP), in the mid-1990s.
As is often the case, corporate customers were the first to buy in. And yet, of those that tried WAP phones, as many as 80-90 percent have already given up on the devices' data capabilities entirely, according to a study released in late May by the Meta Group. It seems that what these customers want most from their phones is a much simpler application: They want to talk on them.
That's a big disappointment for wireless carriers, however, as they search for new revenue streams. The problem is that merely finding subscribers isn't good enough. Annual growth in terms of new subscribers is expected to slow as the market for mobile phones quickly approaches saturation.
By 2004, says market research firm Alexander Resources, 59.9 percent of the U.S. population is expected to own a mobile phone. But subscriber figures will plateau, and by 2009, annual growth will have slowed to only 2.3 percent. This trend will surely mean hard times ahead for wireless carriers, unless they can find a way to entice their existing subscribers with services above and beyond basic voice calling.
Recent findings by Jupiter Media Metrix seem less than encouraging, suggesting that by 2003, North America will still account for less than 10 percent of global mobile phone revenue (compared to 66 percent for Asia). But the race is on to buck that trend, and to find the "killer app" that will appeal to U.S. consumers.
At first, most carriers were banking on Internet-browsing capabilities to fulfill that goal. With rapid growth in Internet usage in American homes each year, wireless access seemed like the natural successor.
But so far, Web browsing on mobile phones hasn't taken off. Even in Europe and Asia, where mobile data applications are generally more popular, the Meta Group estimates that as many as 65-75 percent of users have given up on trying to surf the Web on their phones.
Many found that the small screens and awkward interfaces of most mobile phones limited their usefulness as browsers. And low bandwidth, coupled with only partial media type and protocol, made successful surfing a challenge.
Many carriers are counting on commerce applications to bring in significant new business in coming years. But unless they can somehow combat consumer apathy toward Web and wireless information applications, mobile shopping seems like it will be a tough sell, too.
The latest area of exploration is in location-based services. With these, different information, options or applications will be presented depending on where the individual mobile customer physically is at the moment. But widespread adoption of this idea in the United States may be hampered by public concern over privacy issues. Already the Federal Trade Commission has asked mobile carriers to file reports on their usage of location-based data, so that the FTC can evaluate how much regulation may be necessary.
Regulatory concerns may also hamstring the other industry darling: multimedia. While it's all very well to say that next-generation mobile phones will be able to accommodate streaming audio or video, copyright conflicts may leave the services without any content to deliver.
The seemingly frivolous fad of custom mobile phone ring tones has already run into trouble. The Recording Industry Association of America (RIAA) recently issued warnings to several Internet sites offering downloadable ring tones, that if they didn't remove tone sequences based upon copyrighted songs they could face legal action. If simple patterns of beeps are already receiving this kind of scrutiny, high fidelity streaming audio doesn't seem likely to fare much better.
Other logistical difficulties, of a more technical nature, have plagued the U.S. mobile phone industry from the beginning. Competing carriers, protocols, technologies and standards have made technical progress slow, and continue to make widespread adoption of next-generation services difficult. Even if content for streaming mobile multimedia became available, the network bandwidth might not be.
That is, not without some serious capital investment. Ironically, even as carriers turn to data services in hopes of increased revenue, the new networks required to support these services are extremely expensive to build. So expensive, says Forrester Research, that carriers' average revenue per user is expected to drop by as much as 43 percent over the next five years, as new global 3G networks are phased in. At that level of income, say some analysts, it will take carriers longer than five years just to recover their costs.
A flattened level of customer growth, slow adoption rates for data services, and substantially reduced profit margins combine to paint a fairly gloomy picture for U.S. mobile phone carriers. Sounds like it's time for them to rethink their strategy.
So many past mobile phone initiatives have looked to the Internet as their example. Carriers have been so convinced that the Web's success would pave the way for their own that hastily conceived plans - such as ill-conceived browsers and phones that tout their Java standards compliance — have been adopted without much thought to whether they really provide the consumer any real advantage.
It leads me to wonder why mobile carriers keep chasing a mobile communications model that doesn't seem to fit most American's real usage patterns. Instead, why not listen to what the consumer really wants — quite literally?
The message American consumers are sending is clear: The telephone interface they prefer most isn't a touch screen or a jog shuttle. It's plain old speech, the application the telephone was invented for. That's why voice portals seem like a major step in the right direction — and I hope the idea hasn't escaped the R&D folks at the major wireless carriers.
Rather than sabotaging their futures with over-ambitious plans for data networks, mobile phone providers would do well to cater more to what their customers seem to really want: mobile phones, not miniature mobile network terminals. After all, if a two-way voice communicator was good enough for Dick Tracy, why shouldn't it be good enough for the rest of us?
