Portable Telephone Firms Are Getting a Busy Signal
Don Simpson, co-producer of the coming “Beverly Hills Cop II,” said he bought “five or six of them” at $3,500 each, one for himself, one for partner Jerry Bruckheimer, one for actor Eddie Murphy and some as spares.
“It’s a nice toy and also convenient,” Simpson explained. “When I’m on a set, I’d rather take a phone out of my bag than walk to the trailer to use the one there.”
John Picard, who scouts commercial building locations for Japanese investors, finds them indispensable.
In a Helicopter, Too
“I used one on the plane back and forth to Denver when I was on the Marvin Davis (home remodeling) project (in Beverly Hills),” Picard said. “It’s handy when I’m up in a helicopter, too.”
Jackie Yellin, a real estate syndicator who lives in Denver but bases her business in Los Angeles, said a portable cellular phone has spoiled her.
“It makes travel very easy,” she said, “but the most fun was when I used it during a football game at the Coliseum.”
Although a consumer version of the Dick Tracy wrist radio has yet to appear in better electronics stores, its bulkier brother, the portable cellular phone, is finding a market. While decidedly an item for the well-heeled--the cheapest portables cost about $1,500--buyers report finding a wide range of business uses.
“The mobile phone did what it was supposed to do--it moved the office into the car,” said Ron Bills, marketing manager for Chicago-based Motorola Cellular, which put one of the first portables on the market in 1984. “The portable is taking it one step further, to another car or another town.”
The phones also have taken the office to such unlikely places as movie theaters, sailboats and picnic spots, users of the device report. One man convinced his weekend golf partners that having a portable along would help them as well as himself, because he would play better golf without worrying about missing an important call.
Two Kinds on Market
There are two kinds of take-anywhere cellular phones on the market, one the industry calls a “portable” or “hand-held,” and one known as a “transportable.” The first are one-piece units small enough to fit into a briefcase or coat pocket. They weigh between 15 ounces and 2 1/2 pounds.
The more powerful transportables are two-piece units weighing between seven and 10 pounds. The handset for speaking and listening connects to the combination transceiver and battery by a cord, and the unit can be carried like a lunch pail or slung across a shoulder like a purse.
Both varieties work the same way as a mobile phone. The unit’s transceiver (a portmanteau word for transmitter and receiver) communicates via FM radio waves with a system of cell sites established by a “carrier,” locally either PacTel Cellular or L.A. Cellular. The carrier then connects its cellular system with the standard or “land” telephone lines.
Cellular users pay their carrier a $45-per-month access fee, plus 45 cents a minute for weekday calls and 27 cents a minute for calls at night and on weekends. Rates apply whether the customer made or received the call. The average bill runs about $150 a month, according to representatives at PacTel Cellular and L.A. Cellular.
Officials at both companies said it is impossible to know how many portables and transportables--manufactured by several companies--are being used in the greater Los Angeles area.
“When we register a number, we can’t tell whether it’s a mobile or a portable unit,” explained Nancy Harrison of Irvine-based PacTel Cellular, which began service in June, 1984. “My hunch is that 90% of the cellular units bought in L.A. are mobile units.”
Many others in the industry gave the same estimate--that the two types of portables make up about 10% of the area’s 65,000 cellular phones.
“Right now there are a couple of disadvantages to portables,” said Brian Pemberton, president of L.A. Cellular, himself a portable user. “The length of time that the battery lasts is really the constraining factor.”
Under Construction
L.A. Cellular’s system, scheduled to begin operating this spring, still is under construction. The company continues to “piggyback” its subscribers onto PacTel’s network of 63 cell sites in Los Angeles, Orange, Ventura, Riverside and San Bernardino counties. Many industry insiders believe that the effectiveness of portable phones will improve once L.A. Cellular comes on-line and as PacTel continues to add cell sites.
Some users, however, are delighted already.
“They’re great,” movie producer Simpson said of his portables. “I’ve had about five different car phones and there’s still a lack of clarity or they don’t work in the hills. But sometimes I can get through on the portable phone when I can’t on the car phone. And the clarity is quite extraordinary.”
Simpson’s phones are Motorolas with six-tenths of a watt of power, standard for hand-held units. He bought top-of-the-line models with two-number registration, meaning the owner is able to sign up with carriers in two cities.
“When I get to New York,” Simpson said, “I can immediately make calls and receive them from people who know I’m coming.”
Val Arnold, a Los Angeles interior designer whose projects have appeared on the cover of Architectural Digest, credited a portable phone with streamlining his work methods.
“I hate to take notes, but generally I can remember things for half an hour,” Arnold said. “So when I leave a meeting, I immediately call my secretary and get it down.”
Arnold, who often begins a project when the building location is barren land, also uses his portable to dictate instructions and information from the job site. He has owned both a transportable and a portable and prefers the latter because of its smaller size.
Mitsubishi International Corp. sells a version of both phones. A comparison of portable and transportable can be made by looking at the two models. Most dealers in Los Angeles discount list prices, sometimes significantly.
Under Two pounds
The portable, called a Mitsubishi 700, weighs just under two pounds, including a detachable battery that offers one hour of talk time. Leaving the phone on while awaiting a call reduces available talk time at a rate of about one minute for every five of stand-by time. Stand by one hour, and talk time drops to 48 minutes. Many users carry a spare battery (about $150). Mitsubishi has yet to offer a cigarette-lighter adapter (about $200 for other manufacturers’ portables) to conserve battery power while driving. List price for the unit is $2,849.
The Mitsubishi 555, like other transportables, has three watts of power, the same as mobile cellular units. Because it draws greater power, the 555’s regular battery offers only the same talk and stand-by time as the smaller portable. For an additional $100, however, customers can buy the transportable with a battery that roughly doubles the available time. The larger battery increases the unit’s weight from 7 1/2 to just over 10 pounds. The 555 lists at $1,699. For an extra $350 customers can buy a “car kit,” mounting the bulky battery-transceiver in the car’s trunk while the handset remains mounted up front.
List price is highly negotiable in Los Angeles because dealers make money not only from buyers, but also from commissions and residuals offered by carriers PacTel Cellular and L.A. Cellular. Commissions are a one-time payment made to a dealer when he signs up a customer who stays with a carrier 90 days.
Commissions currently average $75 to $150 and hit the $300 to $500 range during a sign-up war in 1985, representatives of the carriers said. L.A. Cellular recently was paying dealers residuals of $25 per customer every three months for periods of two to three years.
Because of commissions and residuals, a bare-bones mobile phone that lists for $750 will sell at Muntz Electronics in Van Nuys for $599, said company president Jim Muntz. He offers comparable discounts of portables and transportables.
Asked which version will win customers’ hearts long term, Muntz gave the nod to the portable. “The transportables, I think people are going to find cumbersome.”
Richard Basch, owner of Safe and Sound in Santa Monica, agreed.
“The manufacturers are going to put out portables that are even smaller and stronger,” he said. “You won’t have the problem getting out (initiating a call) that you sometimes do when you’re indoors. They have the technology now, but they’re not going to let it out until they’ve saturated the market.”
Competition, however, may hasten the introduction of more advanced units. In portables, the new Walker Pocketphone weighs just 15 ounces, roughly half of competitive models. Competition also may bring down prices. NovAtel, a Canadian company, said it soon will introduce an eight-pound transportable with a list price of $1,200.
Some car rental companies at airports have begun offering portable phones in addition to automobiles. The phones may be used aboard planes without violating Federal Aviation Administration rules. Some cellular dealers, such as Cellular Service Inc. in Glendale, also have entered the rental market.
Basch of Safe and Sound said he’ll sometimes purposely lose money on a deal with a cellular customer, either mobile, transportable or portable.
“These are people with disposable income and with affluent friends,” he said. “The word of mouth is great. I’ll end up doing car stereos and other work, too.”
And, one day perhaps, selling them a Dick Tracy wrist radio.
