Hard Cell

As Kayzar, 40, recalls, "One of the other guys in the lounge asked me, 'What have you got there?' I was very coy; I just said, 'It's something new. It's in very early development. It isn't available to the public yet.' He wanted to see it, so I let him hold it. The next thing I knew, half of the people in the lounge were crowded around us with these fascinated looks, passing it back and forth."

Now the Smartphone was almost ready to be mass-produced, but a handful of tasks remained. The device needed to be stress-tested, to make sure that it could withstand almost anything that a customer might do to it. So some phones were put in ovens and freezers, to check thermal ruggedness. Small mechanical jigs pressed buttons on the phones, day and night, to make sure that the number "1" or "5" still worked after more than 100,000 taps. Other phones were dropped, over and over, onto a linoleum floor -- from heights as great as two meters -- to make sure that they wouldn't break.

Weirdly, all of the vital circuitry of the Smartphone proved crash-proof, but the stylus for the PDA module would sometimes pop out and catapult toward the ceiling. So engineers worked to design the perfect stylus, with a rubber mechanism that would lock it in place. When they spent weeks testing a dozen designs, they were teased as perfectionists. But in the end, they had a no-slip stylus that worked so well that the company's lawyers agreed to patent it.

By this past January, the Smartphone was ready to be turned over to manufacturing boss Mike Barnwell for full-scale production. At their peak, Kyocera's production lines can churn out hundreds of phones an hour -- but new models typically start at much slower rates until all of the inevitable glitches are cleared up. Months earlier, in fact, Randi de Lara's circuit board had been kicked back to the drawing boards because it had malfunctioned spectacularly in its initial production tests.

In November 2000, Koerper and Gregg Rowell, Kyocera's senior director of strategic accounts, visited executives at two of the leading wireless carriers, Sprint PCS and Verizon. People at both companies had expressed interest in the Smartphone already, but weren't yet committed to buying it in bulk. With more than 11 million Palm-brand devices in circulation worldwide, though -- and with every technology publication crammed full of articles about the wireless Internet -- the carriers suddenly were a lot more interested.

At one meeting, Koerper recalls, a carrier executive picked up a sample of the Smartphone, walked out of the meeting, and huddled briefly with his company's CEO. When the carrier executive returned, he had a simple message: "We love it. How many of these can you make for us?"

All of a sudden, Koerper later remarked, "Organizations that at first were lukewarm were now buying out my entire first year of production." Instead of planning to sell no more than 275,000 Smartphones during the life of the project, Kyocera officials realized that they had something much bigger on their hands. With Masahiro Inoue leading the charge, Kyocera's senior managers began calculating how to ramp up manufacturing capacity in a serious way.

A public buzz started to build about the new phone too. In November, the influential personal-technology columnist at the Wall Street Journal, Walter Mossberg, told readers: "Don't despair, however, about phones with big screens and built-in organizers. Another one is on the horizon" -- the Kyocera Smartphone. In December, technology reviewer Stewart Wolpin endorsed the Smartphone on CNNfn as a "pocket-friendly" combination of phone and PDA with "no compromises" that hurt either function. Publications ranging from PCWorld.com to Cigar Aficionado also praised the Smartphone's design.

At Palm Computing's main trade show in Santa Clara, California in mid-December 2000, Jeff Pritchard decided to scout several dozen exhibitors' booths to see what other new ideas were afoot. At first, he and a colleague walked around with Smartphones clipped onto their belts. Not a good idea.

"We'd ask people about what they were doing, and all of a sudden, they'd look at us and say, 'What's that phone you've got?' " Pritchard recalls. "Pretty soon, we were giving them a Smartphone demonstration, and we weren't learning anything about what they were doing. We had to hide our phones to get any work done."

When the Smartphone finally went on sale March 5, Kyocera was bombarded with more than 1,000 calls or emails from would-be customers wanting to know where they could get the device. But for all of the recent good fortune, the Smartphone team is hardly guaranteed success. The stumbling U.S. economy could soften demand for all types of mobile phones -- and in fact several major cell-phone manufacturers have cut industrywide sales forecasts. Competition is likely to heat up, too, as Samsung Electronics of Korea and others bring to market their own versions of phone/PDA hybrids.