Motorola To Offer Handset Technology To Rivals

In an effort to explore alternative revenue models and boost the adoption of 2.5G and 3G wireless services, Motorola Inc. plans to make its voice/data and multimedia mobile phone software available to its competitors.

Motorola executives say that by buying Motorola's embedded 2.5G and 3G semiconductors and software, mobile handset manufacturers can focus on phone styles and features rather than technological barriers.

Large handset makers might not buy from a competitor, but smaller manufacturers with fewer choices might benefit from this opportunity, says Eric Rasmussen, a consultant with Telechoice. Motorola's initiative to sell its mobile phone technology helps create a market for small third-party developers who may want to target vertical markets, he adds.

Because of NTT DoCoMo's closely watched 3G deployment and the problems that have caused the recall of thousands of handsets, telecom companies are concerned about how a lack of competition could affect the wireless next-generation market, Rasmussen says. Telecom companies "can't rely on a couple of companies to produce handsets," he adds. "They need as many options as possible, because competition will eventually push prices down."