Asian Phone Explosion

"Every magazine in Hong Kong is half about cell phones and half about losing weight," laments Maggie, our seatmate on the way to Hong Kong. My wife smirked, but that sounded like heaven to this phone geek--except for the part about losing weight.

During the two weeks I spent in Hong Kong and Japan, I saw: a two-year-old with a cell phone, a man bicycling at high speed while text messaging with one hand, cell phones that talk to dogs, phone stores the size of some U.S. department stores, other stores that sell nothing but dangly little charms to attach to your phone, and all sorts of people--businessmen, students, and just plain folks--staring cross-eyed at phone screens on the street and in the subway. It's a wonder so few people get run over by cars.

Hong Kong was a glimpse of what the U.S. may look like in a year or two. Japan, however, is even farther out of this world. This is a country so phone-obsessed they sell little phone-shaped charms in vending machines to attach to your phone.

It's also a country where phone retailing is actually sexy. Sometimes that's "sexy" in the corporate use of the term, like at the big Vodafone store in Tokyo's Shibuya neighborhood--four stories of pure aural pleasure. In the basement, you can play cell-phone games on giant arcade machines or listen to ringtones on stereo headphones. Upstairs, you can try out gorgeous design handsets like the Nudio or the Koto, or watch TV on one of Vodafone's several TV handsets.

Sometimes it's sexy in a more literal sense: On the streets of Akihabara, attractive women in vinyl coats representing various cell-phone carriers duel it out for your attention. The blue-coated DoCoMo girls flogged Premini, that carrier's tiny handset, but I preferred the striking, razor-thin Talby handset, from competitor KDDI, and KDDI's egg-shaped A1403K.

A Look into the Future?

Naturally, Hong Kong and Japan are both going 3G--to "third generation" mobile-phone services, which add high-speed data to ordinary calling and text messaging. I tried out two phones on the UMTS network (the kind of 3G that Cingular is promoting here in the States) with the carrier Three in Hong Kong, and two CDMA phones, one on the EVDO network (which Verizon is promoting here) with KDDI in Japan.

The big draw for Three's 3G service in Hong Kong is video calling, and it really works. It's sometimes blocky and compressed, but pretty smooth. Three told me that work-obsessed Hong Kong bankers like to use video calls to tuck their kids in at night.

There's all sorts of other multimedia content, too, like horoscopes, restaurant recommendations, and movie trailers, but the one I ended up using over and over again was the tower-based GPS mapping. Unlike the satellite-based GPS we have here in the States, tower-based GPS works anywhere you have cell coverage; Three paired its GPS system with a Vindigo-like business-finder that let me find the nearest coffee shop anywhere I was standing in Hong Kong within seconds. This application was super-neat, and a big help especially when you're trying to recover from jet lag through careful infusions of caffeine.

The most impressive aspect of Three's network was the coverage. Cell phones work pretty much everywhere in Hong Kong. I made video calls from Victoria Peak in the middle of Hong Kong Island and from a little

house out in Clearwater Bay, on the edge of the territory by the sea. That's what you can do if your cell-phone carrier has a lot of money and relatively little territory to cover, and it underscored how truly lame many U.S. networks are. People in Hong Kong are making reliable transcontinental video calls to folks as far away as the UK. In much of the U.S., we can't even make reliable voice calls to someone next door.

The handset I got wasn't as neat as the network. The LG U8120, a silvery flip-phone with a rotatable VGA camera, looks great, and it's easy to use. It has one overwhelmingly important feature: It roams seamlessly between 3G and 2G networks, which worked like a breeze while I was making phone calls in the Hong Kong subway. (Cingular's new UMTS phones in the U.S. don't roam--if you leave a UMTS city, you're dead in the water.)

But it's slow: When I was navigating through the heavily graphical Three menus, the phone was always a few clicks behind. That infuriated my much less tech-patient wife. And the latency on Three's network left quite a lot to be desired. That's something AT&T and Cingular should watch out for: long waits between clicking to request information and the information starting to arrive. Seeing a poster for a cheesy but entertaining-looking Korean romantic comedy, I clicked on the Three menu to view the trailer. It took several seconds to make the connection, but once it started up, video was smooth.

KDDI's EVDO network and handsets, on the other hand, were perfect dreams. Streaming video was zippy, and games--especially an addictive BREW version of Pac-Man--were quick and addictive on the beautiful screen of our two-megapixel Sanyo W21SA camera phone. When I couldn't find a design store I was looking for in Tokyo, I called up its Web page on my phone within seconds, complete with pictures, graphics, and a map to my destination.

KDDI has an even more advanced GPS navigation system than Three; they call theirs "EZ Navi-Walk," and it gives you walking, driving, or public-transit directions (complete with train times, transfers, and voice prompts) between any two locations. Alas, it runs entirely in Japanese, and as I don't speak a word of Japanese, I couldn't have too much fun with it.

But when I was lost on a street corner in Kyoto, EZ Navi-Walk did come in handy. I called up a map on my phone, matched the shapes on my screen to the shapes on my paper map, and figured out where I was. This phone geek is always thinking.

KDDI has more tricks up its sleeve coming soon: The new W21CA handset will be the first to run the Opera Web browser, using Qualcomm's BREW language and the high-speed EVDO network. This is critically important for U.S. Web surfers, because Verizon is committed to both BREW and EVDO. The W21CA lays the groundwork for Opera-running, high-speed handsets to appear on the U.S.'s largest carrier.

North American Slowpokes

Why is Asia so far ahead of the U.S.? More tech-hungry consumers and intense competition have a lot to do with it. In Hong Kong, cell-phone penetration has hit 115 percent, compared to a mere 54 percent penetration in the U.S. and 66.3 percent in Japan--meaning most residents in Hong Kong have more than one cell-phone line. So companies need to release truly compelling new products in order to get people to upgrade.

Trend-crazed Japanese cell-phone consumers, meanwhile, hang onto their phones for considerably less time than the 18 to 24 months it takes U.S. consumers to upgrade their handsets, according to analyst Hugues de la Vergne of Gartner Dataquest. Although those Japanese replacement rates are slowing down, de la Vergne says our rates are poised to slow down in 2005. When people buy new products more often, that creates an incentive for products to develop more quickly.

Americans seem to lack a thirst for new technologies. De la Vergne says U.S. consumers are voice-centric and price-focused, meaning they want cheap handsets just to make phone calls. Camera phones have only really taken off in the U.S. this year. Asians, on the other hand, have been famously crazy for camera phones and messaging for years.

Other countries' also markets bring handsets into stores faster once they've been developed. In Europe and China, handset manufacturers and wireless carriers often work independently. Handset makers release their new phones to powerful independent retail chains like Carphone Warehouse in Europe, which bundles them together with service plans from various carriers.

In Japan, carriers get heavily involved in handset development from the earliest stages. They order handsets to spec, guaranteeing manufacturers a certain number of sales of each handset.

In the U.S., things move more slowly. Handset makers tend to wait until they have fully functional designs, which they then submit to carriers for customization and approval. Only when the carrier has given its approval does the phone appear on most shelves. This can result in long delays--for instance, we tested the Motorola A630 all the way back in August and it worked fine, but Motorola had to convince a carrier to take it, so it didn't go on sale until mid-November.

Bumps on the Road to 3G

There's one thing Asia and the U.S. do have in common: Carriers in both places are struggling with how to sell 3G services to customers.

In Hong Kong, carrier Three has region-wide coverage with UMTS, the 3G standard chosen by Cingular here in the States and by most of Europe. It launched its service in January 2004 and by August managed to pull in over 124,000 subscribers, helped in part by extremely low prices. When I was in Hong Kong, Three was offering 1,200 voice minutes per month, plus 150 minutes of video calls and 25 multimedia downloads, for HK$123 (about $16 U.S.). David Lindsay, a Hong Kong real-estate executive, said Three is "practically giving [plans] away."

In Japan, all three major national carriers--NTT DoCoMo, Vodafone, and KDDI--have national 3G coverage, but consumers have been slow to switch. DoCoMo and Vodafone both run UMTS networks; by October 2004, DoCoMo had managed to switch over 7 million of its 47.5 million subscribers, and Vodafone had managed to switch over a mere 275,000 of its 15.2 million subscribers. KDDI uses CDMA 1xEVDO, the same technology Verizon has introduced in the U.S. They've managed to pull 1.2 million of their 18.3 million customers over to EVDO.

Switching is slow even with relatively low subscription prices. KDDI charges Y4,200 for unlimited EVDO service, equivalent to about $40--that's half of what Verizon is charging here. The major problem, a Qualcomm rep in Tokyo told me, is the handset prices. 3G handsets are still more expensive than even relatively high-end 2G models. The high-end 3G W21SA with KDDI costs $250 with a service plan, and the equally high-end 2G Talby costs a mere $150. Also, up until very recently, 3G handsets were bulkier than 2G models, and many couldn't roam out onto the more ubiquitous older networks.

Back at Home, Making a Wish List

I returned from Asia with a sheaf of vacation photos and a wish that things could be different here.

I wish U.S. carriers had better coverage and less of a lock on which phones make it to market. I wish carriers played better with each other; you still can't send picture messages between Verizon and Cingular. I wish U.S. consumers were a little bit crazier about new technology. I wish the U.S. had better public transportation, because public-transit cultures seem to have more advanced mobile technology--you can do things with your phone while standing around on a train that you can't do when you're behind the wheel of a car.