Motorola International 3200
Ericsson GH172
Nokia 1011
Decline of the Car Phones

First 2G Phones

Even while the GSM standard was being defined, there were discussions about whether the new standard should apply to car phones or whether more handheld devices should also be added to the network. Critics said that handheld devices would quickly lead to network congestions. In addition, they could only be used outdoors, if at all. Using cell phones in buildings was viewed as not required since landline phones would be available there. In the end, a standard was created for both variants, with a car phone differing primarily in providing higher transmission power and higher receive sensibility.

So many manufacturers who had previously built car phones for the C-Netz, NMT or TACs now developed car phones for the GSM network, which was called the D-Netz in Germany. Overall, the complexity of the new standard was underestimated. CEPT had developed a strict test for the new phones, the Full Type Approval (FTA). Many manufacturers failed to pass this test and thus entered the market late.

When Deutsche Telekom and Mannesmann Kommunikation launched their mobile networks in 1992, there were not many approved devices. Only slowly did car phones that closely resembled a C-Netz phone come onto the market. They were big, heavy and expensive. However, it was assumed that the market for cell phones was rather small and only interesting for business people. Private individuals were not the focus of many manufacturers. Most people never imagined that a cell phone would be a “consumer” product one day, like a radio receiver or TV.

But then Nokia, Ericsson and Nokia entered the GSM Market and scared the market with attractive handheld models.

MOTOROLA INTERNATIONAL 3200

Motorola were the first to bring a GSM handset onto the market in 1992 which looked like a DynaTAC8000x. It was „A Brick“.

The Motorola device weighed more than half a kilo and had a volume of almost a liter. It could make calls for 110 minutes and standby for almost 24 hours. It cost less than available car phones.

ERICSSON GH172

Ericsson came out with a lighter handheld device in 1992. It weighed only 420 grams and had a volume of just 370 cc. This device in particular was a real shock for the German market. Others device manufacturers always said, that it would be impossible to create such a small device.

NOKIA 1011

The most attractive handheld GSM phone came from Nokia in 1992. It weighed a little less than 500 grams and had a volume of 520 cc.

The Nokia handheld was attractive and good looking. And still it was less expensive than a car phone.

Decline of the car phones

By the end of 1992, everyone was talking about the new portable cell phones. There was no need to go to any „car phone store“. You could buy these phones from major electronics providers. They were often offered at a reduced price (subsidized) if you bought them with a network subscription. They also worked perfect in a car and in buildings. So there were hardly any good arguments for car phones anymore.

The car telephones, which were primarily built by German and French manufacturers, were lying on the shelves. There was no demand for car phones anymore. They were eventually sold below value and production was stopped. Many manufacturers such as PKI (Philips Kommunikation Industrie), formerly TeKaDe and one of the pioneers in mobile communications, stopped terminal equipment business. Some focused on infrastructure equipment on but they encountered strong competition especially from Ericsson and Nokia. Local PTT provider where not prepared to play in a global market like GSM.

The decline was due to false marketing. Philips, for example, estimated in 1990 that there might be 40 million GSM phones worldwide by the year 2000. This was an optimistic estimate at the time. In reality there were 400 million phones at the end of the century. People didn’t believe in handheld devices and invested to late in expensive developments.

Motorola, Nokia and Ericsson saw mobile communications as a global market. They played in this global game already with their AMPS/TACS business. They built phones for all standards and focused on handheld devices from the start. When GSM came out, they already had a lot of experience in handheld technology and manufacturing that national mobile phone providers couldn’t offer.