Smart Call

At a Verizon wireless store in downtown San Francisco, Jeff Livingston and Marc Warren rush to inspect "The Phone." As they poke and prod the device, the pair look more like kids in a toy store than financial analysts on a lunch break. And they aren't the only interested shoppers. Salesman Dan Martinez, who says most of the calls he gets are about rate plans, now fields dozens of inquiries each day from folks curious about The Phone.

You can't take pictures with it. You can't scan bar codes with it. You can't even play MP3s on it. So why the buzz over Kyocera's new phone? Just this: While the market's getting crowded with handheld devices that are the digital equivalent of the Swiss Army Knife, the unimaginatively named QCP 6035 is first-to-market with the industry's true killer app: a mobile phone and a Palm combined.

That's it.

It's a simple concept, but trying to integrate a phone and a PDA has frustrated companies - and consumers - for years. Early attempts by the likes of Nokia and Qualcomm turned out unwieldy electronic bricks with homegrown operating systems that were little more than glorified electronic organizers. The Kyocera phone is a direct descendant of 1999's Qualcomm pdQ phone, which had most of the same features as the QCP 6035 but never caught on. Critics point to Qualcomm's spotty marketing, an $800 price tag and oversize design. After that failure, many of Qualcomm's engineers moved to Kyocera when the Kyoto, Japan-based corporation acquired Qualcomm's wireless business last year.

Kyocera seems to have learned from its predecessor's mistakes. For one, it's spending a fortune on marketing, running two-page ads in the Wall Street Journal and New York Times. And though it isn't tiny and it isn't cheap, the phone isn't too bulky (a problem with the VisorPhone, an add-on for Handspring's Visor PDA). At $499, the QCP 6035 costs no more than a phone and a Palm bought separately.

Verizon Wireless, which began offering the phone in early March (other carriers will follow shortly), won't say how many units it has sold. But Strategy Analytics, a Boston-based research firm, estimates that smartphone shipments will total 5 million units this year. That's about 1 percent of the overall cell phone market, but the share is expected to grow with Kyocera's new offering.

Kyocera's solid debut has competitors redoubling efforts to come up with their own cell phone-PDA combos. Handspring, which initially sold the VisorPhone exclusively through its Web site, recently announced it would offer the product at Best Buy and Staples stores as well. And Microsoft continues to enlist partners for its Stinger smartphone operating system, including HTC, Mitsubishi Electric and Samsung.

Given how much Kyocera improved upon Qualcomm, and how much more the phones will inevitably be refined, consumers may want to wait for the next generation before buying in. The Kyocera phone, for instance, requires you to dial in each time you want to check e-mail or browse the Web; most smartphone handsets in development promise always-on Internet connections.

Still, the buzz over Kyocera's phone comes as something of a relief to the wireless industry, which lately has endured a spate of bad news, from shaky results at Ericsson to fears over gadget fatigue. Judging from the reaction of many customers, the latter probably isn't an issue. Chris Gostyla, who works at a wireless company, picks up wireless gizmos like a sweater collects lint. He bought a Kyocera the day it came out and considers it a "killer" product. "This is going to be my only phone," he says.