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SMART PHONES DEFY DESCRIPTION BUT STILL ATTRACT MANUFACTURERS

NEW YORK-Like the fabled elephant described by a group of blind men positioned near various points of its anatomy, equipment vendors at the recent “PCS-1900 in North America” conference gave widely different definitions of so-called “smart phones.”

The closest thing to a consensus reached was about what they are not-they’re definitely not plain vanilla analog cellular handsets, nor are they personal digital assistants or laptop computers. But they may combine aspects of all these devices. And whatever they are, or end up being, they had better cost under $600 to gain widespread acceptance.

“The market will tell us, and the answer may be different in the United States than in Europe,” said Joshua P. Kiem, senior marketing manager for Motorola Inc.’s Cellular Subscriber Group. “They may have two-way pagers, personal digital assistants of some sort. Some like the Nokia 9000 Communicator, the Motorola StarTac or the Nortel Orbitor units will be focused on value-added services and will be more phone-like. Others will make it easier to use the phone.”

Beyond the uncertainty of definition at this early stage, projections of whether smart phones will fulfill enough of their elusive promise to justify investment also was a matter of debate. But there is enough optimism to have enticed a substantial group of manufacturers into the smart phone arena: Northern Telecom Inc., Ericsson Inc., Nokia Mobile Phones Inc., Motorola Inc. and Siemens Wireless Terminals Group.

“Not enough volume to buy dinner with” is how Dominic Badger characterized projections he had read that smart phones will comprise 1 million of the 30 million digital handsets of all kinds in use by 2000. Badger is communications products marketing manager for Psion Computers plc, a United Kingdom company focusing on the data side of wireless communications.

But the statistics take on an entirely different perspective when “only 5 percent of your customers may generate 80 percent of your revenue,” said Dan Paulson, sales director for personal communications services at Nokia Mobile Phones.

Then there is the question of size that also will determine definition.

“When people could unconsciously carry a phone around instead of leaving it under the seat of the car, behavior changed and it was used more,” said Kiem, an advocate of handset downsizing.

But to Badger, “trying to make a mobile phone into a palmtop introduces unacceptable compromises. It’s hard to make a keyboard both small and usable, and it uses two (computer) chips, which are quite expensive.” For this reason, he said, Psion is focusing on products that connect mobile telephones to peripherals using infrared and wireless links.

“It’s a form and function issue. Is it a general purpose device where you can type onto the screen, or is it an accessory to a personal computer or PDA?” said Robert Hunsberger, general manager of wireless terminals for Siemens Stromberg-Carlson. “I’m not sure people will walk around calling on a PC or PDA or typing onto a four-inch screen.”

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