OUR CELL-PHONE FUTURE

Surf the Internet, use it as a debit card, listen to music on it, take it out to click photos, and, yes, make calls. These are what you do with cell phones in some countries—and what people elsewhere too will eventually do

A great majority of the world’s two billion mobile-phone users would probably blink in jealous awe at an advanced Japanese mobile phone like Sharp’s recent hit, the 905SH. The handset, made for wireless carrier Softbank’s Vodafone, sports a stainless-steel frame and a striking, black 6.6cm LCD screen, which swivels 90 degrees to display nine channels of digital TV in crisp, widescreen format. The phone also surfs the Web, serves as a debit card, plays music, takes photos and, oh yes, makes calls. Outside of Japan or South Korea, there is nothing like it.

Thanks to its edge in consumer electronics and early investments in high-speed networks, Japan’s mobile-phone industry is years ahead of most of the world. Everywhere you look, it shows. Tokyo subway riders tap messages to friends, listen to music and play games on their handsets. Shoppers pay for groceries with digital wallets and navigate the streets with GPS-guided maps, two features packed into most new Japanese phones. And now Japan’s wireless ecosystem is poised to get even better. A new “number portability” rule coming on October 24 will make it easier for Japanese mobile-phone users to switch wireless carriers without changing numbers, which in turn is intensifying competition among the three major service providers — NTT DoCoMo, KDDI’s au and Softbank’s Vodafone.

Japanese cell-phone users stand to benefit from the competitive anxiety. On the way, timed to the new regulations, are a wave of slickly designed handsets that emphasise broadband features like mobile music downloads, digital money and, particularly, digital TV. Vodafone was first to introduce a digital TV phone earlier this year with the 905SH, and DoCoMo and KDDI quickly followed with their own models. KDDI is now planning a handset that enables video calls between two subscribers—a first for the carrier.

Japanese phone users will also soon have more mobile music to listen to. Last year more than 90 percent of the 268 million digital songs purchased in Japan were downloaded over mobile services, instead of PC-based services like iTunes, according to the Recording Industry Association of Japan. In the new models coming this fall, carriers have worked to improve sound and make downloading easier. For a new phone line, au worked with Yamaha to develop a new digital standard that improves the sound quality of songs on a mobile handset.

DoCoMo has lagged behind KDDI on the music front but unveiled a mobile music channel and high-speed handset last month. It automatically transmits an hourlong, podcast-style program to subscribers on a regular basis. “This is a way to enjoy listening to music passively as opposed to (actively programming) an iPod,” says DoCoMo spokesman Takushi Koinumaru. “This is something new, but we think there’s demand for it.”

The wireless companies’ ultimate goal is to further ensconce cell phones at the centre of their subscribers’ busy digital lives. “We are aiming to make our mobile phone a ‘personal gateway,”’ says KDDI spokesperson Maki Sato. Key to that effort is using the RFID chips now in most Japanese handsets to allow the phone to serve various functions, such as a corporate ID card, a TV remote control, a door key—and, most enticingly, a wallet. All three Japanese carriers currently allow subscribers to use their phones as prepaid debit cards, to buy everything from groceries to train tickets. With number portability now imminent, they are offering credit services as well. Subscribers can buy now with a wave of the phone and see the charges later, on their monthly phone bill.

—Newsweek / BRAD STONE and AKIKO KASHIWAGI