Pennies From Heaven, Can Pagers be the Information Appliance We're Dreaming Of ?

By Marie D'Amico, 

They’re incredibly vexatious, those hip-holsters that let wearers feel so self-important, looking like digital tech-slingers. With 70 million subscribers worldwide (27.3 million in the US alone) in 1994, pagers already have mass-market acceptance. With the technological advances of two-way and voice paging, pagers may be poised to become combination cellular telephones, answering machines and cheap electronic content devices. This compact beeping, vibrating device may thus evolve into a major-league purveyor of content while still functioning as a wireless way to ask your spouse to pick up the laundry and milk, or simply say, “call me.”

The $3-billion paging market, growing 25 percent each year, is remarkably robust; the subscriber base has grown more than 300 percent in five years despite analysts’ prophecies of demise due to cellular telephones, competitive cost-cutting, and consumer confusion about paging features. It’s not alchemy. Pagers have what consumers want: inexpensive service (local coverage averages at $12.50 per month; nationwide is about $29), small, pocket-sized form factors, long-lasting batteries and good reception. Until now, though, pagers have been monologue devices, requiring another communications device to respond.

Motorola’s Tango and Tenor pagers, based upon their ReFLEX and InFLEXion protocols, have altered this technoscape. Tango is a two-way alphanumeric pager which can acknowledge receipt of a page, reply using 120 canned responses, or select from a multiple-choice list in the originator’s message, all at ten times the speed of one-way units. Tango also can be connected via its RS-232 cable to a PC for downloading long messages. Tenor is a voice pager which can accept up to four minutes of messages. These technological improvements will likely boost pagers' appeal from mobile professionals and teen slackers to the mainstream consumer.

Most paging service providers appear to be assuming two-way and voice paging will usher in a sunshiny tomorrow. They’ve shelled out about $1.14 billion to the Federal Communications Commission (FCC) for the narrowband personal communications services licenses needed for these newfangled services. In addition, MobileMedia Corp. recently paid $945 million to purchase BellSouth’s subsidiary, MobileComm , which was the number-four contender in the market. Most of the top ten private paging carriers, ranked by the number of subscribers, will have a two-way alphanumeric paging service in major markets available by late 1996, although SkyTel Corp. , currently the number-nine player, has the service available in some cities now.

Content, anyone?

Will these technological advances make pagers attractive to content providers and boost them beyond their E.T.-phone-home status? Scott Baradell, manager of corporate communications for PageNet , the top contender in the market, thinks so. “Companies that have name recognition in different areas of information, such as ESPN in the sports world, will enter the alphanumeric paging market in the same way they’ve entered the market for online services,” he said. “Paging will be an important outlet for their information. We have been approached by many content providers and we see relationships developing in the not-too-distant future, especially as paging moves beyond business users to consumers and as the price of alphanumeric paging becomes increasingly affordable and easy to use,” he added. Content providers who participate in the paging market should be mindful that online commerce has yet to yield significant revenues even for trendy, ad-generating sites like HotWired .

Ann Marie Drozd, director of marketing services for MobileMedia , agrees with Baradell. “We already provide information services, such as news, weather and sports, and we will expand our product offerings even for our one-way alphanumeric pagers,” she said. MobileMedia expects to have a two-way paging service rolled out in late 1996 and available in the top 100 markets by 1997. Susan Rosenberg, manager of communications for AirTouch , agreed, but with a tweak. “Opportunities for content providers exist but it will require a commitment on the part of the information providers. They will need to change their formats to meet the constraints of the pager; they need to make information short and punchy and update it in a timely way,” she said. AirTouch expects to have two-way paging available in about 20 major cities in 1996, at a price comparable to their current alphanumeric paging service.

“SkyTel two-way paging lays a foundation for new applications and service types,” SkyTel’s director of advanced messaging products Scott Petry said. “Two-way paging can become a platform for wireless transaction processing. With integration to other service providers, SkyTel messages will help users manage changes to travel itineraries, execute trades, or even update field teams on changes to corporate data, all while remaining completely mobile. These packet-oriented services will enable a new class of content publishing and network services to mobile devices.” Microsoft Corp ., an investor in SkyTel parent Mobile Telecommunications Technologies Corp. ( Mtel ), has linked the Microsoft Network ( MSN ) to SkyTel’s network, allowing subscribers of either service to send and receive messages to other users.

Catarina Wylie, corporate spokeswoman for PageMart Inc. , disagrees with these sunny assessments of paging’s content-filled future. “I don’t think this is the correct medium to deliver content, because it’s not a practical application. It’s better for situations in which there is limited information but the timeliness and portability is important, such as field services and sales automation,” she argued.

How is all this content going to be delivered, anyway? The current gun-and-holster form factor and Chiclet-sized screen of most pagers is conducive to viewing black-and-white messages, newsbytes, sports statistics and stock quotes, but not much else. Pagers, to become diverse content purveyors, need a bit more smarts, even in the innovative two-way, alphanumeric bracket. With added intelligence, they could become saviors of the flailing PDA market, for example. Consider a design with a sleeker, slightly larger form factor, a stylus, handwriting recognition (like Rosetta or Graffiti) or some buttons, along with a simple user interface, an information manager and voilˆ! You’ve got a straightforward device consumers already understand, in contrast to a product with a mixed-up marketing message, a sketchy history and a hefty price tag. Even at the bargain-basement price of $29 per month, one year’s national two-way paging service comes close to the low-end price ($399) of many PDAs. Any PDA maker with half a brain should be making such a device and courting some of the private-carrier companies. Moreover, with hundreds of established local and nationwide service providers and mass market retail outlets already in place, sophisticated two-way pagers could finally fulfill John Sculley’s prognostications of a billion-dollar market for personal communication devices, for which he was soundly pooh-poohed and later run out of Apple Computer.

Location, location, location

In the past, pagers have been available through outlets maintained by paging providers and targeted towards business users. To make pagers attractive to consumers and thereby content providers, the paging players need, and are trying to build different distribution strategies. MCI Communications , for example, now resells PageNet’s services though its ubiquitous Friends and Family program; in two months, MCI signed up 10,000 customers. PageMart’s services are now available through retail chains such as Best Buy, Office Depot , and Target. Pagers at retail channels are often sold in home-office sections of stores now, along with other electronics such as PCs and fax machines. This mainstream location ensures they’ll be browsed by more consumers than in their previous store section, the mostly male-oriented realm of car audio.

Donald Vasek, issues manager for the Personal Communications Industry Association (PCIA) , the leading association representing the paging industry, agrees marketing is crucial. “Some people are going to see two-way paging as a great alternative to a portable phone,” he said. “Others will be happy to stay with the simple numeric pager. Marketing will have a major impact on the success of the services.”

Another factor which would broaden the appeal of pagers to both content providers and consumers is brand awareness. Michael Tchao , a communications technology and marketing consultant, sees this as an important future development. “One of the most interesting trends to watch in paging is the emergence of branded information services. Using the cost-effective broadcast capability of paging has led to innovative new devices like the CNBC and ESPN pagers. For example, it is not too far-fetched to imagine an MTV-branded device with styling and services to appeal to the fast-growing teen market with content such as a concert hotlines and band updates,” he elaborated.

In the future, I can imagine a Mickey Mouse pager, or rather, a Toy Story pager. This pager would play off Disney’s worldwide recognized brand awareness; in repeated studies Americans have rated Disney the best company in terms of product and moral goodness. It would be popular with both parents and kids. And, Disney already has in place national retail outlets and theme parks through which such a pager could be marketed as easily as a pair of ears.

Brand awareness and specialized services would also appeal to the 51 percent of the population who aren’t currently pager-enamored. For example, providers for paging services could make the content more germane to women’s kinetic lives. Text instructions or maps to clients’ offices for the segment of society who isn’t afraid to ask for directions would likely be more salable information than sports score services. A pager form factor with a little more panache than a belt clip will likely gain easier consumer acceptance among women. After all, the initials DKNY will always have more pizzazz than NEC .

Vasek concurs. “This is a fast-growing industry, but it’s not for everyone. I think that specialized service is what will initially make the market grow.” The PCIA, for example, operates a paging service called LifePage for potential patients of organ transplants, which frees them from interminable telephone waiting. A coworker’s 14-year-old son just told her he wants a two-pager for Christmas so he can stay in touch with her, but more importantly, because it’s cool at school.

A crowded house

As Vasek said, “At the present time, with only one company offering this service, it’s difficult to tell how widespread two-way paging will become.” With $1 billion invested, the paging service providers are betting big. With the relevant electronic field being crowded with online services, proposed Internet terminals for $500, cell phones, answering machines, voice mail, PDAs, and PCs, two-way pagers need to muscle their way into a cluttered, congested market. But, at $29 a month, and with better retail channels, form and content, two-way pagers may just push some of those big bullies out onto the street.

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Communications

© 2006 Digital Media