Why is U.S. always last in line for new phones?

Michael Rogers Columnist • Profile • E-mail

For U.S. gadget lovers, this week has been pretty much torment.  We’ve been watching the enormous 3GSM tradeshow in Barcelona — the Consumer Electronics Show of the worldwide cell phone industry — where the latest and greatest mobile phone gadgetry is paraded before the international press.

Why is it torment?  Because much of the hottest new equipment won’t be available in the United States anytime soon, if ever.  In an unusual turnabout, we Americans have our noses pressed against the shop window of the future, admiring technology we can only dream of owning.

What are we missing?  Just one example in Barcelona this week was the Samsung Ultra Smart F700, a sleek elegant black phone with a high-resolution color touchscreen, slide-out keyboard, a 5-megabyte auto-focus camera, all operating on an ultra-high-speed wireless network that will download a 4-megabyte MP3 song in four seconds.  The Ultra Smart F700 looks as cool as Apple’s upcoming iPhone — and actually does more. But we’re not going to see it in the U.S. for a long time to come: For starters, we don’t even have a network it will run on.

Networks, as it develops, are only one of several reasons for the U.S.’s sluggishness in mobile telephony. But it’s probably the root of the problem. Early on, most of the world decided to all use the same technical standard — GSM — for their mobile phones.  In many countries, the government actually enforced that decision. In the U.S., on the other hand, free enterprise ruled and multiple standards competed, with GSM initially only a small part of the market.

So when the big handset manufacturers roll out a great new product, whom will they serve first? Certainly not that divided market over in the States.

By now there are upwards of 2 billion GSM users worldwide; the fragmented U.S. market is only a small percentage of that. So when the big handset manufacturers roll out a great new product, whom will they serve first? Certainly not that divided market over in the States. Even the all-American Apple iPhone uses the global GSM standard, which could initially restrict its market in the United States (it won’t run on Verizon or Sprint networks) but will open up a large market overseas.

Another example of our tardiness is text messaging.  By now SMS (for short messaging service) is part of European and Asian life: you can pay bills, gamble, bid in auctions, and get every kind of information (including legal notices) via SMS; the first novel has already been written via SMS. The competitive streak in the U.S. kept text messaging from catching on — initially, if you were a Verizon user, say, you could only text to other Verizon subscribers. Only recently have Americans been able to send text messages between different carriers.  In Europe they’ve not only been able to do that for years, but they can even text between countries.

U.S. consumer behavior put another brake on cell phone evolution: since we were far ahead in personal computer adoption, we had less need to use our mobile phones for anything but conversation. In other countries, where personal computer penetration was lower (or at-home online access more expensive) consumers quickly figured out that cell phones could do much more than simply voice.  For many Japanese, for example, the mobile phone remains their only form of Internet access.  At one time, of course, that was rather clumsy and difficult, and we Americans felt sorry for them.  Now, however, it’s no longer clumsy, but cool and the Japanese are far down the road to cell phone nirvana, with rock-solid video on their handsets (plus DVR capabilities) and a mobile e-commerce system that may someday replace credit cards and ATMs.

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