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Computer Makers Heed The Call To Make Phones

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By ASHLEE VANCE

The New York Times

Published: March 19, 2009

The computer industry has hit upon its Next Big Thing. It is called a phone.

Emboldened by Apple's success with its iPhone, many PC makers and chip companies are charging into the mobile-phone business, promising new devices that can pack the horsepower of standard computers into palm-size packages.

The companies are also shifting gears because their technological feats of the past two decades - smaller laptops with faster chips to deliver snazzier graphics - no longer impress consumers, who increasingly find their 3-year-old computers adequate for everyday tasks.

The new smart phones promised by PC companies will, among other things, handle the full glory of the Internet, power two-way video conferences and stream high-definition movies to televisions. It is a development that spells serious competition for established cell phone makers and phone companies. Apple was the first to spot a sleepy industry, shaking up the handset category two years ago with the iPhone. Until recently, the handset makers were the ones reacting to the iPhone - and then with me-too products.

Now, fellow PC makers are announcing plans for smart phones in a variety of sizes, shapes and abilities.

Acer, the big PC manufacturer, has gone from offering no cell phones to selling eight models.

Dell has worked on prototype phones but has not committed to making a product. Asustek, the company that was first to market ultraportable laptops known as netbooks, has new smart phones coming.

Smart phones give PC makers a chance to extend their newfound expertise in creating low-power products.

In particular, Acer hopes to ride its success selling laptops and netbooks into the mobile phone market through a mix of new software and wireless data plans.

This could open up a way for carriers to sell more wireless 3G data services to consumers since they could offer a single plan covering multiple devices.

It is an extension of the model that Dell and others are trying in which carriers essentially give $400 netbooks to consumers in exchange for two-year contracts to data plans. Such plans can cost as much as $1,500 over their lifespan.

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