Good Times: Is the American Cell Phone Market Finally Maturing?

Noah Kravitz
 from Oakland, CA
Published: July 16, 2008

Cell phone junkies - or anyone who's spent any time in Europe, Korea, or Japan - will tell you that the U.S. cell phone market lags almost hopelessly behind its global counterparts.  The American market is tightly controlled by the network operators, and half of US phones run on a proprietary standard incompatible with most of the world's networks (CDMA, used by Verizon and Sprint), a combination that's long resulted in a lack of options and innovations for U.S. consumers relative to folks in more advanced mobile nations.  Where Europeans are used to buying unlocked handsets and popping their SIM cards in and out of different phones, for instance, most American consumers don't even know what a SIM is or which networks use them.  I can't even count the number of times I've been asked, "Can I use an iPhone on Verizon?" in the past few weeks.  The answer, by the way, is no.

Here in the States, network giants like Verizon and AT&T largely dictate what handsets and services make it to market, and they "work closely" with phone manufacturers to reprogram the devices with network-branded user interfaces and, in some cases, watered-down functionality.  Features like Bluetooth file transfer are often locked down by US carriers in order to push customers towards paying for network services like photo uploading/sharing on cameraphones instead of being able to move photos to their own PCs via Bluetooth.

A good example of a US carrier "reworking" an existing device for a Stateside launch is the Samsung Glyde for Verizon.  The Glyde actually started life as the Samsung F700 Ultra Smart, a high-end phone that had cell phone geeks all in a tizzy when it appeared on the scene in Europe last year.  When word got out that the F700 was coming to VZW, the American cell phone community got pretty excited.  And while the Glyde is, in many ways, a great little handset, Verizon literally shrunk it down in size and largely reprogrammed its user interface to fit their "same menus on all phones" philosophy.  The result was a handset that appealed to a lot of VZW customers while also greatly disappointing the hardcore mobile enthusiasts here in the States who'd been hoping for the original F700 - or something closer to its original look, feel, and extensive feature set.

But the times may be changing when it comes to more sophisticated devices and consumer freedom in the U.S. mobile marketplace.  Cell phones have become hot property thanks to the rise of mobile messaging, mobile Internet, and an increasingly tech-savvy consumer base that wants more from their phones than voice calling and handsfree earpieces. 

BlackBerrys and Sidekicks made QWERTY keypads and Email on the go essential and cool.  Nokia and Sony Ericsson brought high-end cameras and multmedia features to the masses, and Nokia also began a push to introduce U.S. customers to the joys of buying unlocked phones without signing two-year contracts.  While the practice hasn't spread like wildfire just yet, you can now walk into certain major electronics retailers and pick up an off-contract handset - it's a start.

Apple became the first handset maker to dictate its own terms with a US carrier, and ushered in the Touchscreen Wave with its iPhone.  What's followed has been wave of powerful handsets with an emphasis on usability, including the HTC Touch and Touch Diamond, Samsung Instinct, LG Dare, and of course, Apple's own iPhone 3G.  With a full-touch BlackBerry on tap for later this year, it's clear that American consumers (and our friends around the world) have embraced the idea of a mobile phone that's sexy, fun to use, and - oh yeah - doubles as a portable computer.

And while Apple's newly launched App Store for iPhone isn't anything new ? Windows Mobile, BlackBerry, Palm, and Symbian users have been downloading and installing their own applciations for years now ? it is a real sign of the times.  American consumers are beginning to understand that their phones can do more, and their starting to demand it from their network carriers.  Competitively priced voice/data plans, advanced features like laptop tethering and mobile TV, and phones that combine the power of a smartphone with the ease of use of a consumer device are fast becoming the rule and no longer the exception.

Whatever you think of Verizon, Samsung, iPhone, or any other particular part of the business, this maturing of the American cell phone marketplace is definitely good for us consumers.  I mean, Verizon's even started to loosen up when it comes to the menus on its phones!  Check out their new LG Dare (an excellent device, by the way) - a Verizon phone with customizable shortcuts and drag and drop menu icons?  Seriously?  Wow. 

Let's hope it's a sign of more good things to come.  We may still lag behind (far, far behind) when it comes to the crazy things that cell phones can do in places like Korea and Japan, but we're making some progress, anyway.  Progress is good.