LAS VEGAS -(Dow Jones)- According to Len Lauer, chief operating officer of Sprint Nextel, there are only three forgotten things consumers will return home for: a cellphone, a wallet or purse, and keys.
The telecommunications industry wants to get that list down to just one.
As such, engineers are busy cramming as many features and services into cellphones as they can. Among them is the capability to open doors or pay for lunch with a wave of the handset.
"It's already evolving as a multifunctional tool for everyday life," NTT DoCoMo Chief Executive Masao Nakamura said during a speech at the CTIA Wireless industry conference in Las Vegas last week.
In Japan, NTT DoCoMo offers a mobile-payments service that allows subscribers to make purchases at a convenience store or check into the airport by waving a cellphone. Some subscribers even have their apartments programmed where they can lock and unlock their doors with their handsets.
The technology, called "near-field communication," has been up and running in Japan since 2004. In the U.S., however, adoption of mobile payments is still at an early stage.
While the U.S. is on the "cusp" of adopting the technology, hurdles remain.
Craig Wigginton, a telecommunications consultant at Deloitte & Touche LLP, said it is still uncertain how the different companies will bear the cost of building out a mobile-payment system and how the revenue will be shared.
"They have to figure out how to slice it up properly," he said.
"The whole mobile-payments and digital-wallet concept is a very cool application," Wigginton added. "There's no reason why it shouldn't be better adopted here in the states."
Another issue is security. Consumers worry that their cellphone will get swiped and the thief will use it to make purchases.
AuthenTec Inc., Melbourne, Fla., has a product that may assuage some of those concerns. The privately held company makes small fingerprint scanners for laptops and cellphones.
There are about five million cellphones in Asia with the half-inch long fingerprint scanners, said AuthenTec spokesman Jim Burke. That's mainly because of the need for more security with the prevalence of mobile commerce in the region. U.S. carriers are currently trying the technology and it could be available in the U.S. sometime in 2007. The scanner costs $4 to put in, so it wouldn't add to the price of current cellphones.
Using the technology, a person could order a book through a Web site such as Amazon.com and swipe his or her finger across the scanner to verify the purchase.
Mobile commerce is seen as a potential driver of revenue for the cellphone companies, who already are seeing an increase in their revenue from nonvoice services such as text messaging and music and ring-tone downloads. With mobile commerce, carriers could charge a fee for each transaction. The technology would run similar to the small "speed pass" gas cards.
Deloitte & Touche's Wigginton said he was disappointed in the lack of mobile-payment displays at CTIA.
While some companies are focusing on new features such as mobile payments, others are working on improving the existing services on the phone.
Nuance Communications is using its voice-recognition technology - which already exists in most cellphones to enable voice dialing - to allow customers to ask their cellphones questions or search for music simply by speaking.
Nuance showed off a prototype of a phone that allows an individual to search through its database of songs simply by saying the song's name or the artist who performs it. So, by saying "Bruce Springsteen" or "The Boss," you can pull up every Springsteen song on your phone. The company also is working on enabling customers to ask general questions (such as, "Where are the local Italian restaurants in Las Vegas?") and have the phone process the answers. The music feature will be available to consumers in six to nine months, while the general inquiry feature could hit the market in 12 to 18 months.
Other improvements include the improved use of Bluetooth wireless technology. Kyocera has a music phone it markets with a small Bluetooth headset. Wigginton said he saw a Bluetooth headset the size of a nickel. With higher memory capacity and better quality devices, handset makers such as Nokia and Sony Ericsson - say they want to take on Apple Computer's iPod music player dominance.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 13th April 2006
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