When does a cellphone have too many whiz-bang features? We're about to find out.
By Stephanie N. Mehta

(FORTUNE Magazine) – 5

The cellphone is fast becoming the Swiss Army knife of consumer electronics. Brace yourself for a wave of compact wireless devices that can do seemingly everything: Snap high-quality digital photos, browse the web, send e-mail messages, play MP3 music files, record short videoclips--and oh, yeah, let you make phone calls. The only thing missing is a corkscrew.

Consumers can credit technological advances for the proliferation of such turbo-charged handsets. Phone companies finally are rolling out high-speed networks that can support multimedia functions, such as downloading music. And speedier, smarter microchips are allowing cellphone makers to cram more features into a single device. Also helping stoke the trend: fierce competition between cellphone purveyors such as Motorola and Nokia and makers of other kinds of gadgets like PalmPilots and Gameboys, which increasingly are adding voice service. One of today's hottest products is PalmOne's Treo 650, a PDA that happens to deliver really good voice calls.

These all-in-one devices aren't for everyone. For starters, they cost way more than your typical camera phone. Sony Ericsson's 910a, which boasts an MP3 player, digital camera, web access, and other business and entertainment features, retails for around $500. Skeptics wonder if anyone will ever use all that stuff anyway. (When was the last time you took a picture with your camera phone?) And with so many items on the menu of these handsets, might quality end up compromised?

John Maeda, a professor at MIT Media Lab, argues that in technology, more isn't necessarily better. Consumers may think they're getting good value when they buy a device that does 20 things, but often they just need a phone that makes calls. "If you were going to a deserted island, would you bring a Swiss Army knife or a cooking knife?" he asks. "You'd probably bring the Swiss Army knife and wish you'd brought the cooking knife."

Analysts suspect the proliferation of high-end devices this year will lead to more niche marketing of phones and wireless services designed for every type of user: A heavy e-mail user may buy a handset designed for messaging that also happens to let him play interactive games. A music lover may go with an MP3 player that can also make calls and surf the web. The only users who may be disappointed are people who just want a plain old cellphone. --Stephanie N. Mehta