snip "We reverse-engineer all our competitors' phones," he says. They also anticipate future improvements: Graphs in the files show how much Nokia's phones are likely to weigh in 2002 and 2003. "We then aim to beat them by 20%," he adds.
This homework appears to be paying off. In March, Sendo made a splash at the CeBIT technology fair in Hannover, Germany, with a lightweight handset with a razor-sharp color screen unlike anything on sale in Europe. Even though the screen can hold 10 lines of text, the Z100 weighs just 99 grams -- lighter than many handsets with small, monochrome displays. Vodafone is one of the operators testing the phone.
Sendo doesn't just make hardware: It also develops games, graphics and ring tones for operators. To demonstrate, Mr. Brogan picks up a phone and taps the keypad; the screen instantly shows a picture of a balloon floating over a landscape. "You could send this graphic along with a text message to your wife saying 'I Love You' and a ring tone of a song that is special to you," he says. Such a package would be sold to only one operator, so the operator can offer subscribers something unique.
A Riposte From Nokia
Nokia is well aware of the threat posed by Sendo and other bespoke handset makers. In fact, it has used a similar strategy to snatch market share away from Motorola in the U.S., where Nokia has provided customized phones to carriers such as Cingular Wireless. It has ceded some ground to wireless operators in Europe, too: It allowed France Telecom's Orange unit, for example, to place a small orange sticker to the base of its Nokia-made handsets.
That may be enough for many operators -- particularly those that maintain close relationships with Nokia, having ordered network infrastructure from the Finnish company and even tapped it for loans. "Operators are our customers and we would be foolish to do anything that harms that relationship," says Nokia spokesman Pekka Isosomppi.
But some European operators are shying away from Nokia's wireless Internet browser, which is typically hot-wired to ClubNokia. British Telecom, for example, has announced that U.S. software maker Openwave Systems Inc. would be the preferred supplier of Internet navigation software for phones used on its wireless network.
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