Want a Drink? Pay With Your Phone
In Europe and Asia, nobody calls it a cellphone. They don't even call it a mobile phone-it's simply a "mobile," because it does so much more than talk.
Japan leads the world in multifunction mobiles, where consumers routinely use the same handset to control a TV, conduct banking, or buy a soda from a vending machine. In Korea, a network will soon give mobiles faster speeds than most broadband in the United States.
High style. In Europe, it's more a question of style. Italians are about five times more likely to have a "smart" phone than an American, says Seamus McAteer of the market tracker M:Metrics: "Of course, in Italy, they also buy nicer clothes and cars than we do." Lifestyle, too, fosters some of Asia's advances, as Koreans and Japanese spend more time than Americans outside their homes and on public transit.
But business differences drive the biggest gaps. In Japan, one company dominates the market, so it designs both the network and the phones. Similar conditions in Korea include cozy relations between the cell companies and the government. Operators enjoy long-standing relationships with customers, making it easier for operators to push products and outsiders to test new ideas, says a report by Andy Bae, a market analyst in Seoul with ABI Research.
Europe has the opposite problem. There is no pan-European network, and operators largely settled on a network that allows users to roam between providers with one phone by swapping out a chip. The result is a market in which handset makers hold sway, as users can switch networks with the same-often high-end-phone.
Another result, though, is that European operators aren't as advanced in the high-end services so popular in Japan and Korea. Americans use their cellphones for more online games, music, and Web surfing than do most Europeans, says McAteer, adding, "We're less far behind the rest of the world than we tend to think we are."
This story appears in the March 26, 2007 print edition of U.S. News & World Report.