As her grandmother and aunt happily shared the baby's picture earlier this month, the television in the hospital room carried news about cell phone pictures taken at Saddam Hussein's hanging.
From birth to death, from the mundane to the morbid, cell phones have become so ingrained in our lives that many people notice they've misplaced their phones faster than they realize that they've lost their wallets. And it's not just talk that they're missing.
Cell phones have morphed into a "multifunctional lifestyle tool," providing communications, entertainment and a host of other services, said Joe Farren, a spokesman for CTIA-The Wireless Association. Some are more computer than phone, featuring a larger screen, typewriter-style keyboard, Internet access, GPS navigation and organization tools.
Consumers can use their phones to check the news and weather, synchronize calendars with their computers, check e-mail, send text reminders to their spouse or children and amuse themselves with games, music or videos while waiting in airports or doctors' offices.
The growth in mobile data -- basically, anything other than talk -- is beginning to make analysts sit up and take notice. In the third quarter last year, Verizon Wireless' revenue from data totaled $1.2 billion, a 95 percent increase from the same period in 2005. About 14 percent of its total revenue came from data, including text- and picture-messaging, e-mail, ring tones, music, video and other applications. That's up from 8.4 percent in 2005.
Data revenue for all cell phone companies in 2006 is expected to top $12 billion, up from $8.5 billion in 2005, Farren said. In 2000, the companies took in $211 million in data revenue.
Data now accounts for $5 to $6 of an average user's bill, up from $3 just a couple of years ago, said David Chamberlain, a wireless analyst for In-Stat, a research company in Scottsdale, Ariz. The number is higher if you look only at mobile customers who actually use data: Their data bills average $10 to $15 a month.
Most cell phone companies offer data packages as well as single-use charges for trying a data service. Usage charges range from 10 cents for a single text message to $6.99 for unlimited use of some games. Packages that target a specific type of data, such as text messaging or navigation services, range from $3 to $20 a month.
Unlimited data packages cost $50 to $70, a bit steep for all but the business customer who needs to have e-mail everywhere or who uses a data card for Internet access on a laptop.
Some studies show that business customers can save money by using a data card rather than paying for Wi-Fi access at a variety of airports, hotels and coffee shops. It's more secure, too.
Mobile phone companies have been promoting data use because growth in revenue from voice service has slowed or even leveled off. Verizon, Cingular and Sprint have spent billions over the last few years to upgrade their networks to third-generation technology, which allows Web surfing at speeds approaching high-speed wired access.
"The U.S. market (for cell phones) is virtually tapped out," said Linda Barrabee, an analyst with Yankee Group of Boston. "Nearly 80 percent of consumers have a cell phone already. If you look ahead, there are not a lot of new customers available" who don't have cell phones.
Chamberlain said the statistics can be misleading. He believes there's plenty of growth potential because about 15 percent of wireless customers carry two or more wireless devices, he said. That reduces the percent of the population that has a phone to 60 percent.
Barrabee said it isn't clear which data applications are going to catch consumers' fancy. Right now, text messaging is the hottest consumer application. Businesses are most interested in getting e-mail using a personal digital assistant or a BlackBerry.
"After messaging, it's really about low-value content: ring tones, graphics and wallpaper," Barrabee said. "We're still in an early phase of development."
The difficulty with some of the data applications is that they're either expensive or hard to use, Barrabee said. Cell phone companies and application developers are struggling with making data easy to use on devices with small screens and tiny keyboards.
Tamara Gaffney of San Francisco-based Telephia, a research group, said just under half of all cell phone customers are using text messaging. The numbers haven't changed much over the last few quarters, although people who use it are sending more and more text.
Gaffney said growth in some data applications may be slow because many customers don't have phones that can use them. As customers replace their phones with newer ones -- and developers make their applications easier to use -- data use likely will grow.
"It's amazing all the stuff that's being crammed into cell phones," said Ira Brodsky, president of Datacomm, a St. Louis-based research firm. "Few people will use all of it. A lot of people will use two or three of these features."
But customers have been asking for more sophisticated services, too.
"We're in the nascent stage of the mobile data business," said John Harrobin, vice president of marketing and digital media for Verizon Wireless. "We've seen an explosion in the number of mobile e-mail users over the last year -- and not just on BlackBerry devices."
Small-business owners are using "smartphones" to stay in touch with mobile employees and clients, and parents are using e-mail and text messaging to stay in touch with families as they move from home to work, to school and to after-school activities.
Verizon Wireless also is experiencing growth in the use of phones to pay for things. If a consumer has a credit card on file with a site such as Amazon.com, eBay or Overstock.com, for example, he or she can pay for items using the cell phone's Web interface, said Stephanie Bauer, manager of mobile Web and mobile advertising. Purchases of ring tones, wallpaper or music downloads also can be charged to a customer's cell phone bill.
Cingular expects to offer mobile access to bank accounts soon. Consumers will be able to check their balances and do a limited number of transactions. Security would be provided through a login so that no sensitive bank information would reside on the handset, said Don Kalista, marketing manager for Missouri and Kansas.
"We see a lot of brands creating an entire mobile website," Bauer said. Quaker State has set up a site for oil-change alerts, for example, and Burger King is offering nutritional information as well as directions to its nearest restaurant on a site tailored for cell phones.
Navigational services that take advantage of built-in GPS capabilities are increasingly popular, Harrobin said. Most data services skew toward younger customers, and that's true of Verizon Wireless' navigation customers, too. But other researchers say navigation is the one service that also ranks high with older customers.
Chamberlain, the In-Stat analyst, said he used Verizon's service to find a barbecue restaurant near his office one day when he was going out with friends. The service gave turn-by-turn directions that were quickly revised when he made a wrong turn.
"I've avoided using the term `killer app,'" Chamberlain said. But, he admits, "I fell in love with it. I hadn't planned to."
Chamberlain said Verizon's faster 3G network makes data services such as navigation work better and faster, so consumers are more likely to use them.
Sprint's move to a faster "Rev A" network promotes use of such data products, too. Sprint expects to have Rev A installed throughout its network by the third quarter of this year, said Scott Sloat, a spokesman. The upgrade will produce downloads at 450 to 800 kilobits per second, up from the current 50 to 70 kilobits.
"With those speeds, you're approaching an experience very similar to DSL," Sloat said. "The added advantage is you're not tied to a cable."
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(c) 2007, St. Louis Post-Dispatch. Distributed by McClatchy-Tribune Information Services. Photo © geotrac - FOTOLIA
