Motorola Inc. may cut EDGE technology from the initial shipments of its forthcoming handsets-including the highly anticipated Pebl and Slvr models-due to problems with chips from supplier RF Micro Devices Inc.
Motorola earlier this year promised that its forthcoming Pebl and Slvr devices would feature support for GSM, GPRS and EDGE networks. However, the company was not satisfied with the performance of RFMD’s EDGE technology. As a result, Motorola fined RFMD $5 million. The chipmaker recorded the fine in its first-quarter results, released in July.
Motorola said it now expects to ship different versions of the phones. Some may have EDGE support, but initial batches may not include EDGE. Interestingly, the chips inside the phones will remain the same-EDGE will either be turned on or off depending on whether the technology meets Motorola’s requirements.
Although Motorola fined RF Micro Devices, the two companies’ relationship appears solid. In a July press release, Rob Shaddock, Motorola’s chief of technology, praised RFMD’s EDGE chips and promised Motorola would continue to use them in its handsets throughout this year and next year.
Indeed, investment firm Piper Jaffray & Co. recently raised its price targets on RFMD due to the company’s successes on the chip front.
“In fact, recent discussions with Cingular suggest the Slvr is a very important phone in its product roadmap, and we expect strong promotional activity around this phone,” wrote Amit Kapur with Piper Jaffray. The firm makes a market in RFMD securities. “We believe such activity will further stimulate sell through of RFMD Polaris chipsets.”
Motorola’s Pebl and Slvr devices follow up on the company’s popular Razr phone. The clamshell-style Pebl features a rounded, metallic design, and the Slvr is a candybar version of the Razr. The Pebl is scheduled for release in the third quarter, and the Slvr is slated for release by the end of the year.
Motorola’s move to drop EDGE from its Pebl and Slvr devices initially was posted on Internet site Phone Scoop.
