Then the dot-com party came to an abrupt and ugly end, causing investors to look at wireless ventures with considerably less enthusiasm. The massive downturn in the tech economy also squeezed capital needed for network upgrades, and the wireless bash was declared over before it started.
Over the past two years, U.S. carriers have quietly built out the long-promised 3G networks, and they're seeking a return on that investment in the form of higher billings for data services such as e-mail, television and music downloads.
Now that all the pieces are in place, wireless consumers should brace themselves for a blast of information on services that could rival the marketing frenzy of the dot-com era.
"This year, it's all about content - what you're doing beyond talking on the phone," said Jorge Fuenzalida of the telecom-research firm inCode.
Several factors have come together to create an ideal environment for new services, including handsets with longer battery life and color screens, greater capacity on wireless networks, and a changing consumer base, Fuenzalida said.
"We like to think of things from a supply perspective, but consumers are changing as well," he said. "People born in 1990 are now 16 years old, and they've never known life without cell phones."
U.S. consumers have shown that their appetite for upgraded services is growing. Last year, they nearly doubled their spending on nonvoice mobile phone services over 2004, shelling out $10.5 billion for data services, according to the Yankee Group.
The research firm estimates that billings for mobile data services will continue to explode, hitting $25 billion next year and $41 billion by 2010.
While it's clear that everyone's gearing up for a boom in mobile services, what's not yet evident is exactly what will capture Americans' hearts and dollars.
Just as no one predicted at the start of the Internet boom that an auction Web site or a no-bells-or-whistles search engine would be the industry's top players, it's tough to predict what the must-have mobile technologies will be - and who will execute best.
"You're going to see a ton of experimentation as these guys struggle to figure out the magic formula," said the Gartner Group's Michael King. "Consumers are going to be the ones in control here."
So far, those who have moved beyond using their phones for voice calls have mainly stuck with communication. Text messaging - long popular in Europe and Asia - has taken off domestically. The wireless industry trade group CTIA estimates that 7.3 billion text messages are sent within the United States every month, up from 2.9 billion per month a year ago.
As evidenced by the mass nail-biting over a possible shutdown of the Blackberry service this winter, e-mail is also fast gaining popularity as handset makers offer more devices with full QWERTY keyboards.
But there are signs that not all mobile data demand is practical-minded; U.S. consumers spent $500 million on ring tones last year, compared with $245 million in 2004, according to technology analyst firm BMI.
Meanwhile, consumers are experimenting in increasing numbers with picture messaging, mobile blogging and music downloads.
Probably the most closely watched emerging service is mobile TV, which IDC research estimates will be a $3 billion market by 2010. Carriers also see it as a way to tap the wallets of subscribers, who spend roughly $40 more per month compared with non-TV subscribers, according to research firm Telephia.
Right now, just about everything about mobile video services is up in the air, including how interested American consumers will be in the tuning in on the so-called "third screen."
Most analysts say mobile TV is going to be radically different from what we're used to seeing in the living room.
Fuenzalida said consumers will want to "snack" on content in short bursts during downtime, but will never get into the lean-back mode they do at home. He sees cell phones being used to view sports highlights and news, as well as short comedy bits like the wildly popular "Lazy Sunday" Saturday Night Live skit that made the rounds on the Internet earlier this year.
"The standing-up technology of the phone doesn't allow you to watch 'Gone With the Wind,'" Fuenzalida said. "Full length is not going to be very popular."
King, who has tried to while away airport waits by watching TV on his phone, said tiny screens will limit the possibilities for mobile TV.
"The majority of the 3G phones can display reasonable quality, but on a 3-inch screen, max," he said. "I'll sit for an hour and watch this thing, and I'll start to get a headache."
The current leader in small-screen TV, MobiTV, has 1 million subscribers who pay $9.99 per month for content from about 50 channels, including CNN, Fox Sports and the Cartoon Network. The company said it added as many subscribers in the past six months as in its entire first two years.
MobiTV is offered through carriers, often under a different name - Sprint calls it Sprint TV. The carrier handles billing and takes a cut of the subscription fee.
More important to the carriers is that, in order to subscribe to the TV service, customers have to sign up for the carrier's data service, which typically adds an additional $10 to $15 to the customer's bill.
Paul Scanlan, MobiTV's co-founder and chief operating officer, called TV "the 75-year-old killer app" that would drive a broad spectrum of cell phone users to sign up for data plans.
Scanlan acknowledges that most of MobiTV's users are young and male, but he says most new technology services are adopted by young males first. He sees the demographics of the company's users changing as more people become aware of the service.
"TV is easily the most successful application in the world," Scanlan said. "It appeals to pretty much everybody."
While not too many retirees are interested in text-messaging their buddies, Scanlan said, the ability to keep up with their favorite baseball team or track their investments on CNBC might drive them to upgrade their phone plans.
"I know once my dad knew he could watch CNBC or Fox News while they were waiting at the doctor's office, he was interested," Scanlan said. "Whereas all these games and ring tones - it's not for them."
MobiTV will face competition next year when communications giant Qualcomm enters the mobile TV market with MediaFLO, a live TV service that will run on the analog spectrum abandoned when broadcasters moved to digital transmission.
Qualcomm has invested $800 million in the service in the interest of driving consumer demand for 3G services, that will in turn drive sales of chips based on the company's proprietary technology.
"We're concerned about the experience being disappointing," said Qualcomm spokesman Jeremy James. "If we promise TV on the phone and people don't get that experience, it will slow market uptake (of 3G services)."
