Reaching (wirelessly) into your pocket
Mobile phone companies are ready to sell you video, music, directions and even Bible verses.
By Peter Lewis, FORTUNE senior editor

LAS VEGAS (FORTUNE) - Talk is cheap. Everything else on your mobile handset, however, is going to cost you.

That's the message so far from CTIA Wireless 2006, the mobile phone industry trade fair, which opens Wednesday. Mobile handset makers, telecom carriers, software startups and giant media companies are all showing off new mobile hardware and services designed to entertain and enlighten us -- and reach wirelessly into our pockets.

How much would you be willing to pay to watch your favorite TV show on your "third screen"? (That's one of the buzz phrases here, as the mobile handset display joins the television and the computer monitor as an entertainment and information portal.)

Is it worth a buck or two to download a new song or a new ring tone? Would you be willing to pay extra each month for access to family-friendly amusements from Disney (Research) Mobile, which is launching its own phone service here at the show? How about a few pennies a day to have a daily Bible verse sent to your phone automatically?

Mobile phones are no longer just phones. They're little computers capable of voice, data and multimedia functions. If the demonstrations here at Wireless 2006 pan out, people will be using their handsets to watch TV on the go, listen to music, take digital photos, send instant text messages, search for the nearest ATM machine or gas station, check e-mail, transfer funds at the bank, and even pay for items at the store using the handset as an electronic wallet. (All this is ho-hum stuff to mobile consumers in South Korea and Japan, which are far more advanced in mobile services than we are in the United States.)

And, like bigger computers, the new phones will inevitably be targets of spam, viruses and other annoyances that are all too common in the Internet world. But that's a topic for another day.

"About 70 percent of all new cell phones are data-enabled today," said Tim Bajarin, president of Creative Strategies, a consultancy in Campbell, Calif. "That doesn't mean that they're using data, but they're capable of it. Plain old cell phones are still important, but phones are getting smarter and more mainstream for developers."

Hundreds of developers are here, hoping to sell new software and services for the new generation of smart phones.

Based on interviews with a dozen or so companies on the eve of the show, consumers are going to be nickeled and dimed for all sorts of add-on services -- some for fun, some for business -- while plain old voice services get cheaper. Analysts say the number of new mobile phone subscribers is declining here in North America, so the best way for carriers to make money is to offer data and multimedia services.

The only time I heard the word "voice" used was in "voice-activated search" -- by a company that has developed a service to allow consumers to speak into the mobile phone. Their service will allow users to ask, for example, "Where's the nearest gas station?" and see the choices on a map on the handset's display screen. The service is not yet available, but it will be, and yes, you'll pay a bit extra for it.

Going beyond nickels and dimes, a big theme emerging here is mobile TV. New technologies, demonstrated here and expected to be available to consumers later this year, will allow people to receive live or pre-recorded video or multiple channels of music on their handsets. Whether video services will be pay-per-view, or a monthly subscription model, remains to be seen. It's also unclear whether consumers actually want to watch TV on a screen not much larger than a matchbook.

Behind the scenes, new and competing technologies are rolling out to increase the speed of mobile networks. A lot of the new services being developed require the deployment of third-generation (3G) or even 4G networks, which will roil the wireless landscape as rival companies jockey for supremacy.

And, of course, you'll need to buy an expensive new phone to be able to watch the game or your favorite soap opera. All of the big handset makers, including Nokia (Research), Motorola (Research), Samsung, LG, Sony-Ericsson and dozens more, are here showing off their latest models. Yes, the trend toward skinny and sleek fashion phones, started by Motorola's RAZR, has spread to all the other rivals as well. I'll be roaming the aisles here looking for the next must-have handsets.

One thing is clear already: The future is mobile and wireless. We'll be taking a peek at the future here at CTIA this week, so stay tuned. Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.