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Handset makers try to lure enterprise market with new devices

Although wireless by and large caters to the consumer market, many of the industry’s major mobile-phone makers zeroed in on the high-margin business user during the 3GSM show in Cannes, France.

Nokia, the world’s No. 1 handset manufacturer, used the show as a platform to promote its newest Communicator product, the 9500. Nokia’s new tri-band GSM/GPRS 9500 device features support for EDGE networks as well as Wi-Fi 802.11b access points. The powerful minicomputer also offers a full keyboard, the Symbian operating system and support for corporate documents. Nokia said it expects to begin shipping the device in the fourth quarter of this year for an unsubsidized price of about $1,000. Nokia’s Communicator line of advanced mobile phones, which are now almost a decade old, have earned the nickname “brick” due to their notable size and solid shape.

In conjunction with Nokia’s 9500 release, the company announced an expanded agreement with technology giant IBM Corp. to support the device. IBM’s WebSphere platform will connect Communicator users to corporate information including e-mail and instant-messaging services. Nokia also announced pacts with Cisco Systems, SAP, Cap Gemini and others to support its enterprise plans. And it appears the company’s work is paying off; Pfizer, Ricoh and Daimler Chrysler have embraced Nokia’s enterprise products.

Nokia’s expanded enterprise efforts follow the company’s recent corporate restructuring to create an enterprise division. The company said it expects its enterprise division to reach financial breakeven by the middle of next year. Nokia’s plans to take on the corporate market are sorties in the company’s war against corporate behemoth Microsoft Corp. As Microsoft has been working to entice handset makers with its corporate-friendly phone software, so too has Nokia been looking to block Microsoft’s advances with its own products.

“We believe that Nokia’s Enterprise business unit will see the most challenging outlook (as shown by our projection of ongoing losses), especially in the context of the competitive pressures from traditional IT vendors such as Microsoft,” wrote Credit Suisse First Boston in a recent research note.

On Microsoft’s side stands the world’s No. 2 mobile-phone maker and Nokia’s closest competitor, Motorola Inc. The company during the show introduced two new advanced handsets running Microsoft software, devices the company said would be available later this year. First, Motorola’s bar-style, tri-band GSM/GPRS device, the MPx100, features an integrated digital camera and support for Bluetooth connections. Motorola’s even more advanced clamshell-style MPx device features a 1.3 megapixel digital camera, Bluetooth support and embedded Wi-Fi 802.11b connectivity. The phones are aimed squarely at the business user.

Also on the enterprise front, Sony Ericsson Mobile Communications L.P. announced it would add BlackBerry technology to its new P900 smart phone. Sony Ericsson, which previously announced a deal with BlackBerry maker Research In Motion Ltd., said the service would be available later this year. Separately, RIM said it would sell the BlackBerry 7730 with GSM/GPRS and Java support through French carrier SFR, set to be available in April.

Most notable in Motorola and Nokia’s announcements is the integration of Wi-Fi into their devices. Using such technology to target business users is an obvious first step as corporations rapidly have embraced wireless local area networks as an efficient campus communications tool. However, consumers in the future could use Wi-Fi networks to make Voice over IP calls in their homes, and combined cellular/Wi-Fi devices would fit in that scenario as well. However, the technology could make carriers squeamish as it could potentially cut down on voice revenues.

While Wi-Fi made a notable showing at the 3GSM show, third-generation mobile phones did not. Motorola stood out as one of the only companies to release W-CDMA phones, including the advanced A1000 and E1000 devices. Also on the 3G front, Sharp Corp. said it would use reference designs from Ericsson Mobile Platforms to build W-CDMA phones. Executives from both Vodafone Group plc and T-Mobile underscored the situation by complaining of the relative lack of 3G phones. In response, Nokia’s chief executive Jorma Ollila acknowledged the company’s slow 3G phone rollout, but said the nascent nature of 3G networks made phone testing a time-consuming task.

“For a device targeted at the enterprise market, the lack of W-CDMA support will be disappointing for many mobile operators,” research firm Current Analysis wrote in examining Nokia’s 9500 device. “Whilst the performance of GPRS or EDGE networks will be adequate for many applications, the lack of 3G support will be seen as a weakness of the device in a market where speed of delivery is perceived as very important.”

Nokia and Motorola were not the only handset makers to show off new devices during the show, however. Other announcements included:

c Panasonic’s X700 smart phone running on Nokia Corp.’s Series 60 user interface, which is based on the Symbian operating system. The advanced clamshell phone features an integrated digital camera, support for miniSD memory cards and Bluetooth. Panasonic said it will be available across Europe in the fall.

c Samsung’s PMG Sleek Module, which is based on technology from startup IXI Mobile. IXI’s technology, which is for sale to mobile-phone makers, essentially connects a variety of Bluetooth devices to one wide area wireless device. IXI has promised to commercially offer several devices in Europe and the United States by the middle of this year.

c AlphaCell Wireless’ M5 Music mobile phone, which the company said supports MP3 music files and MMC SD memory cards. The company said the phone is targeted at the youth market.

c Siemens’ wireline multimedia messaging phone, the SL740/SLX740isdn. The cordless phone includes an integrated digital camera and support for MMS services.

c Sendo’s new S600 camera phone and M570 picture-messaging phone.

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