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From the November 29, 1999, issue of Wireless Week
Nextel Diversifies Handsets
By Peggy Albright
After going steady with Motorola for several years, Nextel Communications Inc. has divulged that it is ready to play the field.
That in itself is not surprising. The enhanced specialized mobile radio service provider, which has previously obtained handsets
and infrastructure exclusively from Motorola, an integrated digital enhanced network equipment developer, has always kept
room in its contract to allow additional suppliers. Rather, the surprise is in the partner Nextel chose.
The ESMR carrier said last week that it signed a memorandum of understanding with Japan's Kyocera Corp. to manufacture a
new, high-end handset. Nextel described Kyocera as an innovative second source vendor brought in to meet the rising demand
for its phones and, potentially, to spur more competitive pricing for its customers.
The planned handset, which will incorporate all the digital cellular, messaging, Direct Connect and Internet access capabilities of
Nextel's current line of phones, will be available late next year.
"We are excited to have Kyocera as a potential new equipment supplier to provide our customers more selection of quality
products," says Tim Donahue, Nextel's president and CEO.
And while Motorola now loses its position as a sole-source provider, the agreement does create a new business line for that
company, too.
With the MoU in hand, Kyocera is set to become the first company to license Motorola's iDEN technology. In the next month
or two, under the terms of its own agreement with Nextel, Motorola and Kyocera can be expected to sign their own MoU and
contract, in which Motorola will help transfer iDEN technology to the new developer.
Motorola now will take the lead in helping Kyocera understand the technology. The company is no stranger to Motorola,
having also licensed its Iridium technology and produced handsets for that service. But with this new agreement, Motorola will
license its relevant iDEN patents and give Kyocera access to its vendors and vendor base. Peter Aloumanis, director of U.S.
customer operations for the iDEN Subscriber Group, says, "It helps validate the technology as a real player in the world."
Both Nextel and Motorola said Kyocera is known for developing differentiated products, and each expects to see the new
supplier follow that course here. In Japan, it recently introduced a wireless handheld video phone and it was an early developer
of Internet-browsing phones. Kyocera's Iridium phone, distinct from Motorola's multi-mode handset, was satellite only and
designed to minimize size and weight and extend battery life.
But as a "second-tier player" in the Japanese personal digital cellular market suddenly landing an opportunity to bring its
products to the U.S. market, there may be more here for Kyocera than meets the eye, says Bryan Prohm, an analyst with
Dataquest.
Prohm says there is speculation in the industry that Kyocera is positioning to purchase Qualcomm's handset business.
If that proves to be the case, he says, "This is the first step in grabbing Qualcomm and becoming a serious player in the U.S.
market." |
