War for "the 4th Screen"

http://www.iht.com/articles/2007/01/07/yourmoney/mobile.php

 

By John Markoff

Published: January 7, 2007

SAN FRANCISCO: For functions from e-mail and instant messaging to mobile MySpace and ESPN, computer users are increasingly turning to the "fourth screen" — the one on their cellphones — which is evolving to adopt more characteristics of the three previous generations of screens: movie, television and computer.

That shift may well be underscored on Tuesday when Steven Jobs, the chief executive of Apple Computer, is expected to unveil an Apple phone representing his company's new mobile communications strategy — highlighted by a device that may include Jobs-inspired refinements like a sleek ceramic case and a transparent touch screen.

Industry executives and competitors say that Apple has developed the first of the next generation of devices that are closer to personal computers in pocket form, meaning that they will easily handle music, entertainment, productivity tasks and communications on cellular and other wireless networks.

But while Apple quickly dominated the music-player category after it introduced the iPod in 2001, its challenge with a phone would be far more difficult.

While Apple was early to portable digital music, it would be distinctly late in entering the world of Internet- connected digital hand-helds. Arrayed against it are giants including Nokia, Motorola, Sony Ericsson and Microsoft, in addition to entrenched hand-held companies like Palm and Research In Motion.

Also waiting to enter the fray are powerful Internet companies like Google, which cannot afford to be cut off from users who now rely on them in the desktop computing world.

"Apple is about to touch off a nuclear war," said Paul Mercer, a software designer and president of Iventor, a designer of software for hand-helds based in Palo Alto, California. "The Nokias and the Motorolas will have to respond."

And the coming convergence — or possibly collision — between cellphones and desktop computers is also yielding new forms of hybrid devices. Nokia and Sony have recently introduced hand- helds with innovative physical designs and new combinations of communication features, with screens that are more readable than those on cellphones.

Another entry is the Oqo Model 2, a hand-held computer being spotlighted this week at the Consumer Electronics Show in Las Vegas, including a mention in a keynote address by Bill Gates, the Microsoft chairman.

Developed in a San Francisco warehouse office by a small team of portable computer designers who have previously worked for Apple and IBM, the device is a complete Windows Vista computer that fits comfortably in the palm of one hand.

It has a slide-out keyboard as well as the ability to connect to both wireless Internet networks and high-speed cellular service. Those who wish to use it as a phone can add a Bluetooth headset and use an Internet phone service like Skype.

"Our main goal is to reinvent the PC in a pocketable form," said Jory Bell, a computer designer who is one of the Oqo's founders.

What all of the hardware makers are hunting for is a way to capitalize on the cultural shift in mobile messaging and search that has finally led the United States to close the gap with Asia and Europe, which have in the past been far ahead in mobile data wireless applications.

The data revenue for American cellular carriers grew at an annual rate of more than 70 percent in the first half of last year. In the third quarter, Verizon Wireless, Cingular and Sprint each crossed $1 billion in data revenue for the first time. They were ranked fourth, fifth and seventh in the world in data revenue for the first nine months of the year.

"We've basically caught up with Europe," said Roger Entner, a North American telecommunications industry analyst with Ovum, a market research firm based in London.

Analysts say Japanese and South Korean companies have moved almost 50 percent of their customers to the advanced, data-oriented wireless networks known as third generation, or 3G.

But the United States is only about a year behind the Asian countries in that evolution, some analysts say.

"This is happening because of a number of factors," said Chetan Sharma, a telecommunications analyst based in Issaquah, Washington. "Some have to do with cultures and the others are purely business-related. The carriers are now realizing that wireless data is a substantial part of the business."

Not all of the traffic is being driven by messaging, as a remarkable variety of wireless data software applications is emerging.

When students at Montclair State University in New Jersey feel concerned for their safety at night, they can send a wireless digital alert from a cellphone setting a timer in the campus security office. If they do not turn it off remotely at the specified time, officers are alerted to their location. The program was developed by Rave Wireless, a New York-based maker of cellphone software for academic customers.

For Apple, one advantage in entering the wireless data market may be that it can develop both the hardware and the software for its own phone. But it would still need to rely on the cellular carriers.

In the past, Jobs has cited the carriers' control of mobile phones in the United States as a reason he had not introduced an Apple phone. Now that has apparently changed, and Apple's business strategy in offering an Apple phone will potentially be as intriguing as its industrial design.

Jobs has been rumored to have entered into an alliance with Cingular. That would suggest he has patched up a reported split that resulted in 2005 when Apple introduced its iPod nano on the same day that Cingular and Motorola introduced the Rokr.

Whatever his business strategy, Jobs is certain to have an impact. Recently, he told two associates, who asked not to be identified to avoid damaging their relationship with him, that he was more excited about his current project than he was about the Macintosh.