From ‘Swiss Army knife’ to wireless hub : Rationality may lead to future of mobile handhelds

Consumers’ tendency to carry duplicate devices-think camera phone and digital camera, or smart phone and PDA-may contain a seed of wireless’ future.
That may seem like a bit of a stretch on such a simple premise. Take the implications, however, and work backwards. Enjoy a few leaps of faith, too; the exercise will do you good.
The mobile-phone and consumer-electronics industries could follow complementary strategies to mutual advantage, according to Bill Hughes, an analyst with In-Stat. The mobile phone might evolve to play the role of a simplified wireless data hub that, when linked via cable or Bluetooth to a consumer-electronics device, for instance, could provide content downloads and software updates for the latter. Portable consumer electronics themselves might include a wireless modem for the same functionality.
Streamlined devices
This scenario conceivably might follow the de-evolution of the feature-packed, “Swiss Army knife”-style handsets on today’s market, Hughes said, toward more streamlined, dedicated devices more clearly linked to productivity.
Hughes bases these extrapolations on the current trend to pack handsets with features to entice customers at the retail level. But his research suggests that this trend will have diminishing returns for a number of reasons. Among consumers, the costly, added features are not well-utilized-complicated user interfaces tend not to be well-utilized-and thus don’t produce the data revenues that would justify the expense. For the enterprise, promoting productivity does not extend to providing employees with games, music players, digital cameras and video services. This line of reasoning, of course, flies in the face of the current trend to offer combination productivity-and-entertainment devices at the $100 price point.
For Hughes, however, these insights flow from basic data collected in a study aptly titled, “Repetitive Redundancy.” Conventional wisdom in the wireless industry has it that consumers seek a wireless device with multiple capabilities; logically, consumers want a single device that’s easy to carry. But in practice, most users carry redundant devices, according to In-Stat’s study.
For instance, more than one in seven carry two mobile phones and many carry a mobile phone plus a portable device that parallels a capability contained on their mobile phone. Eighty percent of those surveyed said they carry a digital camera along with their camera phone, 75 percent tote a PDA along with their smart phone. And more than 50 percent carry an MP3 player along with a multimedia phone. Among those who do not currently use a smart phone, fully half expect that the leading benefit will be carrying fewer devices.
The first conundrum is to determine why so many users buy a device that replaces another device, and then end up carrying both, according to Hughes. The main point about consumer behavior, he found, is that users are capable of justifying their reasons for carrying multiple devices but, if pressed, most could operate with a single device. The larger and simpler point is that complex user interfaces-the result of multi-function handsets-pose a barrier to adoption of the peripheral functions. Consumers-by their behavior if not their purchasing patterns-seem to prefer a more-or-less “dedicated” device. In other words, one device, one basic use.
The new family plan
“In fact, we found that the ‘Swiss Army knife’ style device is not how people use their devices,” Hughes said. “However, that is an important capability in the retail environment-it drives customer acquisition. It’s a merchandizing tool.”
So, if people tend to use dedicated devices, one of two things will happen, Hughes projected. The handheld device will become a wireless data hub for sending or receiving data from or to other, dedicated consumer-electronics devices. To illustrate why this might become a trend, Hughes said that, for instance, carriers that understand that consumers aren’t using their camera phone to take lasting pictures worth sending to others will not invest in improving the megapixel resolution of those camera phones. That will limit the quality of camera phones in contrast to their stand-alone digital camera cousins. Streamlining the phone’s functions would address ease-of-use and, not incidentally, battery-life issues.
Another possibility, Hughes suggested-one that is technologically easier to implement, but more challenging from the billing perspective-is to enable wireless modems to work with consumer-electronics devices. A subscriber, for instance, might have a billing code for phone-related data use and a separate billing code for a modem that could plug into whatever consumer-electronic device the subscriber wished to download from or uplink to. Or the consumer-electronics device could communicate with the phone as a modem using near-field communications or another technology, depending on cost.
“This could operate like a family plan,” Hughes said. “Except that, rather than your family, it’s your family of consumer-electronics devices.”