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Once gadgets of the rich and powerful, cellular telephones are moving into the mainstream. Still primarily business tools, the phones are increasingly showing up in the cars, handbags and pockets of the elderly, housewives, outdoor enthusiasts and others who need instant communications.
Consumers are signing up for cellular service in record numbers, attracted by declining equipment costs and new portable phones small enough to fit into shirt pockets. Some industry analysts predict that portable telephones (which, unlike mobile phones, can be carried outside cars) will become as common, by the next decade, as videocassette recorders and microwave ovens. ''We are looking at the dawn of an explosion in cellular telephone usage that will lead to stiff competition and better, more innovative products and services for consumers,'' said Steve Sazegari, an analyst with the Dataquest market research firm of San Jose, Calif.
With demand for cellular service increasing rapidly, equipment makers and service providers are scrambling to capture a larger share of the market. Service providers are offering discounts, and the cellular carriers are installing digital equipment to serve the deluge of new subscribers.
Equipment manufacturers have reduced the average price of a car, or mobile, phone to about $400 including installation, from about $2,000 six years ago. They are battling to produce phones that are smaller, more powerful and safer to operate while driving. Sales from cellular service are expected to top $4.4 billion this year, up from an estimated $3.3 billion in 1989. Equipment sales, $620 million in 1989, should reach $655 million in 1990.
The United States had more than 2.7 million cellular subscribers – mainly doctors, lawyers, executives and other professionals – in June 1989, according to the Cellular Telecommunications Industry Association. In 1988, subscribers increased 67 percent, to 2.06 million.
Still, the price of cellular service will have to drop substantially before there is a phone in every car or pocket. A typical cellular customer now pays about $100 a month. Cellular carriers recently introduced discount plans that allow heavy users to pay a high monthly charge of $35 to $50 and low usage rates of about 30 cents to 40 cents per minute. Low-volume users can pay a low monthly charge, about $10 to $15, and high rates of about 60 cents to 90 cents.
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