Technology '98: The ultimate fashion accessory of the season, Gucci or Motorola?

Smaller, lighter, smarter: according to the mobile phone industry, this is the future of mobile communications.

Stephen Pritchard reports.

The miniature mobile is this year's fashion statement. Mobile phone companies vie with each other to have the smallest handset: Motorola's StarTac; Philips' ultra small, ultra light Genie handset, or Sony's Z1. These phones are smart to look at and easy to carry, and a far cry from the first mobiles, which were closer to a housebrick with an aerial on top.

This year will see a flood of new phone designs. Mobile networks and handset manufacturers both realise that the mobile phone is no longer a staid business tool, but a desirable consumer object. According to David Ball, who heads the UK mobile phone division for manufacturer Siemens, there are as many as eight different types of mobile phone users. Each needs a slightly different handset.

Competition means we will see better phones, too. They will have longer battery life, clearer displays, and more added functions. The peculiar nature of the mobile phone industry in the UK - where phones are subsidised by the networks to the point where they are almost free - means it is hard for makers to compete on price. To win new customers, the phone manufacturers have to appeal in other ways.

Design and looks matters as much as technology. "Aesthetic design will be very important for the consumer," predicts David Ball at Siemens.

"The concept of the wearable phone is very much reality," suggests Jay Chinnadorai, director of new business development at Sony UK. "There will not be one shape. The shape, and the brand, will be as important as the design of the phone. The phone will become part of people's clothing." Mr Chinnadorai predicts that people will choose a phone rather like they choose a watch.

There will still be plenty of places to buy a pounds 10 mobile phone, but the up-market handset will be where the real innovation takes place. "There are people who pay well in excess of pounds 150 for a phone," says Sony's Jay Chinnadorai. "If we can provide phones in that bracket and give them more functionality, there is a market."

Mr Chinnadorai suggests that the up-market phone will move closer to a miniaturised PC. Phones will be able to send and receive electronic mail; some might even give access to the World Wide Web, or information services including local traffic reports. Sony already operates a traffic system using mobile phones in California.

David Ball, at Siemens, expects desktop computer technologies, including video- conferencing, to move on to mobile phones. He expects to see features including clearer, larger and even touch-sensitive displays on mobile handsets; Siemens already sells a GSM phone with a colour display.

Ericsson, the Swedish mobile phone maker, also believes that phones and computers will come closer together. "It is moving towards the idea of a communications device," suggests Alex Rodrigues, marketing director. "In the future, all your work will be done on one device you have in your hand: your banking, making phone calls, your mail." Ericsson is launching a range of handheld computers, or "personal digital assistants" such as its new MC12, which bring computing and mobile phones even closer together. The MC12 has a screen, keyboard and communications software, and hooks up to a mobile with a simple cable.

As phones do more, more people will buy them. The UK is already one of the most "mobile" countries in Europe. Sony expects to see between 12 and 14 million subscribers by the year 2000, against 8 million now. Most of the new mobile users will be consumers, not businesses.

The race to sign up those extra customers should mean competitive charges and innovative handsets. There is, unfortunately, a downside. The networks risk becoming congested.

Again, manufacturers believe they have a solution. Currently, digital mobile phones work at two frequencies: 900 and 1800mhz: Cellnet and Vodafone operate 900mhz networks, and Orange and One2One at 1800mhz.

There is far more capacity at the 1800mhz frequency than there is for GSM. As "space" for GSM users becomes scarce, the networks will support "dual band" phones that can hop on to 1800mhz to make calls.

Motorola already sells a dual band phone to Orange and One2One users, and the company expects dual band to be commonplace within a couple of years. Other makers, including Ericsson, will launch dual band phones this year. For existing GSM users, dual band technology means a better service. For subscribers to One2One and Orange, it means a wider choice of handsets.

Travellers, though, might do well to wait. Tri-band phones, which also work at 1900mhz, are under development. When these come out, either late this year or in early 1999, mobile phone users will at last be able to use one handset in the UK, Europe, and North America.