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This week in wireless

Mobile phones and wireless gadgets were all over New Orleans this week, as CTIA Wireless 2005 came to town.

There's a phone over Bourbon Street, or at least there was earlier this week.

In fact, phones and wireless gadgets were all over New Orleans this week, as CTIA Wireless 2005 came to town. Although people had plenty to celebrate, not all was easy in the Big Easy.

Among the reasons for industry good cheer was a CTIA survey finding that U.S. cell phone operators added 21.7 million new subscribers last year--growth that pushed carrier revenue past the $100 billion mark for the first time.

And then there was the gadget factor. A major focus of the show was the metamorphosis of the cell phone from a simple call-making and -receiving device to a multimedia gizmo that can not only take pictures but also play music, surf the Internet and offer television shows.

The camera phone phenomenon has helped wireless data revenue double over the last two years, and carriers and handset makers show every sign of pushing the trend. Cingular Wireless, for example, announced that it will be selling the Sony Ericsson S710, which sports a 1.3-megapixel digital camera with a photo light and an 8x zoom lens, and throws an MP3 player into the mix.

Not to be outdone, Samsung showed off its p777, which Cingular also sells. The phone has a 1.3-megapixel camera, an MP3 player and enough memory to store an hour of video footage.

Still, one of the show's featured speakers threw some cold water on the merrymakers. Kodak CEO Dan Carp said cell phones with embedded cameras will go from runaway hit to small-time niche service if major problems remain unaddressed.

Carp said a Kodak market study found that most camera phone owners find their devices less than satisfying, even though they used the cameras to snap about 70 billion photos last year.

Nearly two-thirds of camera phone owners rarely, if ever, upload pictures to a computer. And 70 percent never or rarely send photos to other phones. Notoriously short battery life, poor photo quality and the complexity of printing pictures are causing major headaches for the 180 million camera phone owners worldwide, according to Carp.

"These are all warning signs," he said. "If we're not careful, imaging could fade to a niche application in phones. Some think it's happening already."

Other company chiefs seemed to agree on the danger of rushing headlong into Gizmoland without taking care of fundamentals. "We need to be challenged to simplify this business," Cingular's Stan Sigman said. "Every new idea we fall in love with. We don't need more. Do fewer, and do it better," T-Mobile's Robert Dotson added.

But hey, the cell phone industry can always look to voice over Internet Protocol, an approach being explored by Qualcomm, Texas Instruments, Nortel Networks and others. The technology seems to be doing OK by the upstart Skype, which is preparing to expand its menu of paid services.

Then again, it hasn't worked out quite so well for AT&T, whose CallVantage service had a paltry 53,000 subscribers at the end of 2004--a lesson in how millions of dollars in marketing and a well-known brand name don't always guarantee success. And there are other problems with Net-based phoning, such as potential electronic Pearl Harbor scenarios. Hmm...perhaps the best bet is that old standby: porn.