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Communication and entertainment are two undeniable facets of popular culture. Thus, the extreme integration of the cell phone into our everyday lives comes as no surprise. They've become security blankets for baby boomers, pacifiers for teenagers, trendy accessories for the affluent, and indispensable productivity tools for executives.

With wireless communications, computing, and entertainment converging on the cell phone, you have to seriously consider replacing your current phone with a high-end smart phone. Given that nearly a billion handsets were sold last year and over a billion are projected for this year, consumers once again have shown that cell phones have become an addiction.

The wireless business remains healthy, with excellent projected growth and some interesting new twists in technology as well as services. While most consumers don't know about the technologies that power their phones, they will certainly benefit from improved features now and in the coming years. Here's a look at a dozen trends to expect.

Design is key to major sales, as Motorola's RAZR proved over the past two years (Fig. 1). Apple and Helio expect the physical designs of their iPhone and Ocean models to produce not only good volume, but also major profits (Figs. 2 and 3).

Thinness is still the primary goal of designers, but you can only go so far (Fig. 4). Chipmakers are already breaching the 1-mm dimension on some chips. And, according to the packaging experts at Tessera, the stacking and interconnecting of 100-µm thin chips will further decrease board area while maintaining the thinness requirement. Other issues like heat dissipation have yet to be fully solved, but are being addressed.

Radio Evolution
Most phones still remain at 2.5G with cdma2000 EV-DO and GSM/GPRS/EDGE air interfaces. But 3G is out there and on the rise. Verizon and Sprint Nextel adopted Qualcomm's EV-DO Rev A, which offers higher data rates. Don't forget Rev B and Ultra Mobile Broadband (formerly Rev C), which are waiting in the wings with even greater speeds and reliability.

UMTS WCDMA systems are also in place at AT&T, with T-Mobile yet to act. AT&T implemented the faster HSDPA and HSUPA systems, with HSPA+ on the map. This eventually will lead to long-term evolution (LTE), the OFDMA 4G upgrade for 3G WCDMA systems. UMB also uses OFDMA and promises downlink rates to 42 Mbits/s. Once again, consumers could care less about the air technology—it just needs to be fast and reliable.

However, carriers take these systems seriously because increased subscriber capacity and higher speeds lead to more revenue-generating features like video. We're still years away from 4G systems, but work continues. So, OFDMA seems to be the niche right now, with LTE leading the way. UMB is offering major competition in the U.S. And, insiders say mobile WiMAX could play a role in the next generation.

Expect More Video
MobiTV offers several channels of news and short clips through AT&T and Sprint Nextel. Verizon offers its V-Cast, a similar service. Nonetheless, expect broadcast video to replace all other video on the network. Cell-phone handsets will incorporate a separate TV receiver chip that will pick up TV broadcasts from local stations. This will relieve the network of a massive data burden while improving reception quality.

AT&T, Sprint Nextel, and Verizon have adopted the Qualcomm MediaFLO standard. Verizon Mobile V-Cast is now broadcasting, and AT&T is expected to begin broadcasting later this year. The other standard is the same as Europe's DVB-H, which is championed by Crown Castle's Modeo. Tests are ongoing, with other stations potentially coming online next year. Currently, Modeo works with the AT&T and T-Mobile networks.

Few consumers will commit to cell-phone TV, skeptical that viewing TV on a small LCD is tough under the best of conditions and nearly impossible in full sun. Nevertheless, the investments are heavy, and carriers are expecting consumers to become addicted. The industry just needs compelling content and a profitable business model.

Dual-mode technology also gives you another way to get e-mail or access the Internet. Enterprise customers are prime candidates for dual-mode phones. Cellular coverage inside big buildings often can be marginal, while Wi-Fi access points are almost ubiquitous. The dual-mode phone could serve as the employee's only company phone.

Facilitating this trend is the relatively new Generic Access Network (GAN) standard. Previously known as Unlicensed Mobile Access (UMA), this system implements seamless handover and roaming between the normal cell-phone wide-area network (WAN) using the licensed spectrum and a wireless LAN typically using Wi-Fi 802.11a/b/g on the unlicensed spectrum.

GAN is the standard of the Third Generation Partnership Project (3GPP) that standardizes 3G WCDMA. The system works with GSM/GPRS and WCDMA networks. The unlicensed segment may be Wi-Fi or Bluetooth. This system enables regular GSM/WCDMA cell-phone services over a hotspot or other Wi-Fi access points.

Putting Wi-Fi in a handset significantly increases the power burden. Frequent recharges may be worth it, though, for users who need to stay connected. Wireless carriers used to hate this option, but they seem to have changed their position as they find ways to make some extra dollars. For T-Mobile with its 8000 hotspots, this is a good business decision. AT&T and Sprint Nextel are considering such service, but it remains to be seen if Verizon will follow suit.

Femto Cells
A femto cell is a small 3G cellular basestation designed primarily for the home or small business. It's part of the evolution of ever-smaller cellphone basestations, as they shrink in size and price to improve in-building or hostile environment connections. Standard basestations are now called macro cells. Meanwhile, the smaller micro and pico cells, which have been around a few years, make sure handsets stay connected in crowded buildings or "urban canyons."

As for the femto cell, it will help consumers with poor or no cell-phone service at home get a connection. Back-haul will come via the consumer's DSL or cable TV broadband connection.

Femto cells may also be part of a combination cell-phone basestation and Wi-Fi home networking router box. They're still in the evaluation and development stages—carriers still must figure out how to deploy them and make additional income. Look for these to become a niche out beyond 2010.

This trend is growing quickly, as more retail establishments install smart-card/NFC readers and back-office systems. Consumers are finding this a significant convenience and time-saving feature. It makes mobile banking a reality when no branch banks or ATMs are available. NFC will eventually be useful as a way to provide entry to, or payment for, other services like transportation and entertainment.

Location-Based Services (LBS)
Most phones are supposed to have GPS or some other location capability to meet the E911 emergency location mandate. However, these features can also be used to provide other location-related services. Sprint Nextel and Verizon offer maps and location services similar to the latest GPS receivers. Eventually, all cell phones will incorporate GPS and all carriers will provide some type of location service, if they can figure out how to make extra income.

Ultra-Low-Cost Handsets
To make phones available to the masses at the lowest possible cost, one goal for cell-phone companies is to build the $10- or $20-handset. ULCHs mean low tech, voice-only, and no data features, except for perhaps an FM radio.

The target market would be third-world countries with huge unconnected populations like China, India, Russia, and South America. Some say the potential is for another 2 billion to 4 billion phones. Don't look for low-end phones to sell well if at all in the U.S., Europe, and Asia, where sophisticated features like texting, cameras, and smart phones have become the norm.

Camera Crazy
The latest statistics report that 74% of new phones feature a digital camera with a typical resolution of 1.3 Mpixels— good but not great. Most subscribers report they rarely if ever use the camera, but they do like having it. On this front, three trends have taken hold.

First, resolution is going up, just like standalone cameras. Many of the newer high-end phones already incorporate a 3.2-Mpixel camera.

Also, 5- and even 10-Mpixel in-phone cameras are available, for a price. With such high resolutions available, some experts wonder if camera phones could kill the digital-camera market. Instead, it's more likely that higher-resolution digital photography will be more common.

The second trend is a built-in flash. The absence of a flash accounts for the poor quality of most cell-phone cameras. Some newer high-end phones already have a flash.

Third, try two-camera phones, which are necessary for videoconferencing. One phone is used for the standard digital-camera function while the other camera points at the users so they can appear in the conference. Though not a big feature right now, it's up-and-coming.

IP Multimedia Subsystem (IMS)
The IP Multimedia Subsystem (IMS) 3GPP standard defines a next-generation network (NGN) architecture that enables the normally available IP network services to be accessible to cell phones or other portable devices. It provides a standard approach with multiple access technologies, user devices, and geographic locations for personal or enterprise use.

IMS converges VoIP, video, data, and other multimedia. As a result, users can access them via the IP network from a cell phone. This complex standard employs older standards (IETF, for example) along with some new ones to let users access the Internet, play online games, or video-conference via a 3G phone from anywhere. It's still in the planning and development stage due to its huge impact on the telecom and Internet networks already in place. One of the big issues regarding implementation is providing an adequate level of security.

Nearly half the cell-phone markets are saturated (an estimated 65% in the U.S., 115% in Europe and some parts of Asia). Today, there are over 2 billion subscribers worldwide. In fact, we've reached the point where there are more cell phones than wired phones worldwide. And more than half of all phones sold today are replacement phones. Thus, the key market shift is toward more smart phones with the latest 3G technology and multimedia.