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Wireless Industry Looks Beyond Phones, Voice At CTIA Show

Las Vegas — The U.S. wireless industry will drive future growth in the face of high cellphone-penetration rates if it delivers innovative smartphone applications and embeds wireless in products ranging from consumer electronics to road sensors, industry executives stressed during the CTIA Wireless convention here.

Although the wireless industry is holding up better during the recession than many marketers expected only six months ago, the industry isn’t taking growth for granted when the recession is over. To drive future growth, BlackBerry creator Research In Motion (RIM) launched its own app store, which was to be populated within days of the announcement with 1,000 free and paid-for apps, including Facebook, Internet radio apps such as Slacker and Pandora, and the Hotel Reservation Service.

For its part, Skype unveiled a VoIP app for the iPhone and iPod Touch and announced May availability of a beta VoIP app for the BlackBerry Bold and Curve. Skype apps for other BlackBerrys will follow. Those apps will join Skype VoIP apps for Windows Mobile smartphones, Android-OS smartphones and Java-equipped phones, all released in recent months.

In other app introductions, Truphone unveiled new international-calling VoIP apps for multiple smartphone platforms, enabling unlimited international calling for as low as $14.40/month. Select companies also unveiled health care applications for smartphones.

Pointing to a future of wireless-embedded devices other than phones, Samsung unveiled a Mobile WiMAX-equipped mobile Internet device, or MID. Verizon Wireless said four to five e-book readers are making their way through its tests to ensure compatibility with Verizon’s network, and Qualcomm demonstrated a prototype Linux-based portable computing device with notebook-size keyboard, 10.1-inch screen, and Qualcomm Snapdragon wireless chip. Snapdragon supports multiple 3G technologies and Wi-Fi. The company expects the product, developed by an original design manufacturer (ODM), will be marketed in the second half through an unnamed manufacturer.

For its part, AT&T announced trials of five 3G-embedded netbooks in select AT&T-owned stores in Atlanta and Philadelphia at subsidized prices down to $49.99. In Atlanta, mobile 3G service is packaged with home broadband service and AT&T Wi-Fi hot spot service. The trials include models from LG, Hewlett-Packard and Acer. 

In another development pointed to a wireless-embedded world, Verizon Wireless announced plans for an LTE Innovations Center where the carrier will help product developers assess the potential for various types of products that connect to Verizon’s planned 4G LTE (Long Term Evolution) network. The carrier’s 4G network is expected to be operating commercially in select markets in 2010.

For the shorter term, handset vendors such as HTC and LG introduced new smartphones and touch-screen phones that operate in today’s 3G networks. Unit sales of smartphones and touch-screen phones continued to grow in 2008 in the U.S. despite an overall dip in unit handset sales.

Smartphone sales have been so resilient despite the recession that RIM president Mike Lazaridis asserted during a keynote speech that “advanced smartphones and applications are the future.”

In his keynote speech, Verizon Communications chairman/CEO Ivan Seidenberg saw smartphones and other data-enabled phones as a way to boost carrier revenue at a time when the number of cellular subscriptions exceeds 270 million. Cellphone users spend an average 26 minutes per day using cellphones, compared with one hour spent on Web surfing at home and five hours watching TV. Carriers who entice consumers to migrate only a “modest” amount of time from those activities to cellphone use will generate sizable revenue growth, he said.

Future growth will also come from promoting smartphone use in the educational and health care industries and by connecting people to machines and machines to machines, Seidenberg said. There is “no limit on the number of connections,” he contended, pointing to wireless-equipped road sensors, vehicles and supermarket shelves. A cellphone penetration rate of 100 percent of the population is not the upper limit of growth, he contended. Many consumers are already using more than one wireless device, pointing to a potential for more than 100 percent penetration, he said. Penetration rates of 300, 400 and 500 percent are probable if wireless is embedded in devices such as consumer electronics and other products, said Seidenberg.