Move over, iPhone: here comes 3G

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The cellphone, as we know it, may be about to enter an entirely new era. No, it's not Apple's new iPhone. While it may be cool in the way that only Apple can make things cool, the iPhone already lags behind some Asian counterparts.

The truly new era involves a technology known as 3G, and it will transform your cellphone into a wallet, bank card, mini-entertainment center, computer, TV, or a ticket for a bus, train, or airline – just to name a few functions.

Yet industry experts say that a cellphone's main calling (pardon the pun) will remain making phone calls, regardless of how many bells and whistles are added.

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3G is the cellphone equivalent of high-speed Internet access. It has been used in Japan for several years and is spreading across Europe.

In the United States, some carriers have recently added several 3G offerings. But Americans still primarily use cellphones to make phone calls. True, the devices are also increasingly used to take pictures, play music, and send text messages (a national texting championship in New York later this year features a top prize of $25,000).

In the end, though, "It is first and foremost about being a good phone," says Michael Gartenberg, vice president and research director at Jupiter Research, a market research firm in New York. "Phones that offer lots of other functions, but aren't good phones, never do well in the market."

When 3G finally arrives, the cellphone will become a device designed as much (or more) to entertain its owner as to serve as a communication device. (One British company estimates that, in a few years, 125 million people around the world will use cellphones to watch TV.) International travelers will also be able to use their cellphones in any country with a 3G network.

Adoption of high-speed cellphone networks has been slow in the US for a number of reasons: Our land-line phone system, for instance, has always been much better than that of many other countries, so Americans don't have the same needs for mobile communications as those who are less well served. Also, early mobile phone services were prohibitively expensive, which set the industry back.

But 2007 and 2008 should see several US carriers offering 3G service. And some experts predict a global battle between 3G and other wireless high-speed networks such as Wi-Fi and WiMAX.

"WiMAX is a bit off in the distance," says Mr. Gartenberg of Jupiter. "Wi-Fi is ubiquitous these days, but it's a problem once you leave your home or office, and finding hot spots can be a nuisance. This is where 3G has an advantage: You can connect anywhere. It's good news for consumers – if the price is right."

But those new 3G networks will also initiate some dubious changes. Companies will try to use your cellphone to influence your personal decisions (a field of study known as "mobile persuasion"). For example, if you drive or walk past a McDonald's, you might receive a sudden cellphone message from the golden arches offering you a price break on a burger.

While new cellphones will increasingly operate like small computers in your pocket, they'll look less and less like, well, cellphones. The mobile phone is increasingly seen as a fashion accessory, which means new designs are being turned out rapidly.

One designer last year created a cellphone that could be converted into an alarm clock or a wristwatch. Another one features no buttons – you just lift it up to your face and it answers or initiates a call.

Nothing comes for free. Once an item crosses the digital Rubicon into fashion-accessory territory, it almost always means a higher price. Everyone will need a new phone capable of accessing 3G. And we'll probably have to pay more for the mobile services people use.

Price still remains a key factor for many Americans when it comes to buying a new cellphone, say market analysts. "Unless carriers are offering compelling applications, consumers are reluctant to pay for these new services," says Gartenberg. "Some can cost you $20 to $60 [per month] extra, depending on what you want."

Still, even with higher prices, many communications companies anticipate widespread adoption of 3G in the next five years.

Gartenberg points out that as the price for 3G service falls, as inevitably happens with all new technology, the number of people using the technology will increase. The widespread adoption of broadband service illustrates that point, and also shows that Americans want fast Internet connections.

Perhaps such demand will arrive for cellphones, too. And if that day arrives, making a phone call may be the last thing you'll do on a cellphone.

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