Web Phones Take Wing

Now, cell phones can deliver nifty Net services fast, and Americans are signing up by the millions

Perhaps you live in a place like Lakewood. There, business execs use their wireless phones to grab e-mail from the back seat of a cab. At their suburban homes, kids use cellular phones to play games while sitting on front stoops. And on weekend camping trips, families pull color Internet images of news and sporting events via their mobile handsets.

A scene from some science fiction flick? Well, sort of. Lakewood was the fictitious everytown the folks at Sprint created on a Las Vegas stage in January, 2002, to help paint a picture of our wireless future. I didn't buy it then. But a year later, I'll admit, aspects of Lakewood's improbable wireless culture are popping up all across America. "It really is beginning to take off," says Jane

Zweig, chief executive of wireless consultants Herschel Shosteck Associates.

The era of wireless data has arrived. No, you can't put the equivalent of a high-powered Dell PC (DELL ) in your pocket. You can, however, connect to the Internet with a cell phone, download and play games and music, store color photos, and send and receive e-mail--with attachments.

AT&T Wireless Services (AWE ) and Sprint PCS (PCS ) have experimented with mobile data service in the past, but it has been a slow, cumbersome experience for users. All that changed last year when most of the major wireless providers began marketing a faster, more effective data service called 2.5G, shorthand for wireless service with more data capacity than the previous voice-only generation of service.

ZAPPING DATA. The new technology zaps bits of data--the building blocks of games, e-mails, and funky ring tones--at about 40 kilobits to 60 kilobits per second. At that clip, cell phones approach the pace of most dial-up PCs. Two wireless players, AT&T and T-Mobile USA, also sells an even swifter service dubbed Wi-Fi, which lets laptops and handhelds gallop the Net at speeds 20 times faster than most home systems.

While nifty, these services have not yet achieved true bliss. In some neighborhoods, carriers haven't built enough towers to avoid gaping holes. Data sessions drop, just as cell-phone calls do, and they're often slower than advertised. As I tapped into wireless data networks, my experience was sometimes painfully reminiscent of the days when cellular phones would dawdle along at 10 kbps.

Despite the pitfalls, today's data service is gaining traction. At the end of 2002, some 22.5 million mobile-phone subscribers said they use their phones to connect to the Net, up from 9 million in 2001, according to researcher eMarketer. What's luring so many people? The carriers unleashed new phones last year with fancy color screens and improved Web browsers. "The magic formula for wireless data is color screens and compelling applications," says Scott Ellison, the wireless program director at researcher IDC. "The industry finally got those right."

Nothing fits better with the color screens than games. Seven million wireless users in the U.S. paid to download a game to their phone in 2002, according to IDC. This year, gamers should nearly double, to 13.3 million. A version of the game Wheel of Fortune was pre-loaded on my Motorola T720 from Verizon Wireless. Sprint phones come with demos of games like Monkey Ball and Space Invaders. Additional downloads cost $1 to $5 per game. And beware: Some of these dollops of fun expire after a few weeks. True, most of the games are downloaded by teens, but operators haven't forgotten adults. On a recent bus trip from Whistler ski resort to Vancouver, B.C., my wife grabbed the T-Mobile Pocket PC phone I was testing and played an old favorite, Solitaire.

Games may grab you, but the biggest wireless data hit has been messaging. Sending text, photos, and sound bites have caught on like a new Bon Jovi single. Already, 13.5 million wireless users--10% of the total--regularly tap short messages--"Whassup?" or "I luv u!"--and zap them along with a downloaded photo of, say, Bon Jovi himself. "Messaging is three to four times quicker than it used to be," boasts Sprint PCS President Len Lauer.

The messages don't have to be short, either. In an effort to nab lucrative business customers, Sprint and others offer a suite of specially designed services targeting business enterprises. The carriers work with enterprises to set up a secure connection between employees' mobile phones and companies' corporate e-mail systems. That way, workers can even exchange e-mails with files attached.

If wireless data phones have a weakness, it's browsing the Web. Punching in a Web address on a tiny phone is no cinch. To help, operators are preloading phones with an assortment of popular sites: News from CNN, sports from ESPN, weather, horoscopes, and more.

Aric Saunders is amazed by how easily he gets Web information on his phone. The 22-year-old loan officer for Hawaii HomeLoans uses his Sprint data phone to download financial news and visit his company's Web site. But the clincher came a few weeks ago while he was shooting the breeze with a buddy. They got into a debate about the distinction between arteries and veins. Saunders settled the dispute by connecting to Encyclopedia Britannica using his Sprint phone. Within seconds, he found that arteries carry blood away from the heart and veins take blood back. "The service has a ton of upside," he says.

I didn't always have as much luck. While I was showing off the Sprint PCS service to friends at a midtown Manhattan restaurant, the phone could not connect to the digital network that enables the new technology. And using my T-Mobile phone to log onto CNN from my living room in Chicago took minutes rather than seconds.

It might take years before traditional phones can surf the Net at lickety-split broadband speeds. That's why select operators have introduced a supplementary service, dubbed Wi-Fi, for true high-speed needs. For about $50 a month, you can slip a rectangular data card into your laptop or a handheld PC and cruise cyberspace at a cat-quick 11 megabytes per second--faster than a broadband connection.

The catch: You can't use this service everywhere. T-Mobile and AT&T Wireless are currently the only cellular operators offering it, though others are sure to follow soon. Plus, Wi-Fi service works only in small zones called hot spots--certain airport lounges, hotels, and some 2,200 Starbucks coffee houses. Jon Ramer, a Seattle entrepreneur, regularly darts into a Starbucks to talk with clients by cell phone while he navigates around Web sites on his laptop. One day soon, as more phones become Wi-Fi compatible, Ramer won't need two devices. With much of America already looking like data-savvy Lakewood, that day when your phone hums at Wi-Fi speed shouldn't be far off.

Corrections and Clarifications ``Web phones take wing'' (BusinessWeek Investor, Mar. 3) should have said that that Wi-Fi service runs at 11 megabits per second, not megabytes.

By Roger Crockett

    Before it's here, it's on the Bloomberg Terminal.