If recent announcements by paging vendors and carriers are any indication, two-way paging products and services are poised to make a big splash in 2000.
Both Motorola Inc. and Glenayre Technologies Inc. unveiled their long-awaited ReFLEX 25 compatible two-way paging devices last week at the Consumer Electronics Show in Las Vegas.
Motorola displayed the ReFLEX 25 version of the Talkabout T900 two-way pager at the show and said a ReFLEX 25 version of the Timeport P935 is ready as well. Glenayre introduced its AccessLink II pager using the technology.
The introduction of these devices allows ReFLEX 25 network operators like Paging Network Inc. and WebLink Wireless Inc. to begin selling two-way paging services on their own networks. Until now, only 1.5-way, or assured messaging, devices were available in ReFLEX 25 models. Both have been reselling SkyTel’s two-way service while they awaited these new devices.
In the same week, WebLink Wireless unveiled its plan to offer wireless e-mail and instant messaging services on two-way devices priced for the consumer market. WebLink said the two-way service will allow customers to send and receive Internet e-mail, content and wireless instant messaging. It plans to sell the AccessLink II for $200 and set monthly service costs beginning at $10.
Officials at Arch Communications Group Inc., which is in the process of acquiring PageNet and its ReFLEX 25 network, said it plans to begin offering ReFLEX 25-based two-way paging services immediately.
This obsession with two-way service is a result of the fact that two-way paging and assured messaging services are expected to comprise the bulk of paging’s growth in the next five years.
Yankee Group analyst Darryl Sterling predicts paging’s growth rate will be 1.5 percent during the course of the next several years, with an annual revenue growth rate of 7.78 percent, due mostly to advanced messaging. By 2004, he said, there will be 51 million paging users, 25 percent of which will be two-way customers.
In the last several years, paging carriers have been preparing for this by building out their nationwide networks and engaging in rapid consolidation. From the network side, the carriers are ready.
“Arch has got so much spectrum now, with PageNet, that they can start upgrading their technology and speeds to match (American Mobile Satellite Corp.) and BellSouth Wireless Data (L.P.). Maybe even faster.” Sterling said. “They can trade off spectrum for speed. They can speed up their networks by adding a frequency band to increase capacity … When you speed up transmission, you can compete with cellular and PCS.”
But to effectively attempt such competition, device prices must fall. Cellular carriers have three major vendors to choose from for devices, in addition to the many other secondary handset manufacturers. While several manufacturers make FLEX and POCSAG one-way devices, the paging industry lacks that diversity in ReFLEX two-way devices.
So in this new wireless landscape, vendor focus has switched from paging infrastructure to subscriber devices and services.
Motorola has transitioned much of its resources away from paging infrastructure, merging its Paging Systems Group into its Network Solutions Sector. Although a small team of Motorola personnel remain focused on paging infrastructure, overall concentration on the business is low.
Motorola had planned to license all its infrastructure business to Glenayre, sparking negotiations this spring to do so. Since then, Glenayre has undergone a massive management and operational restructuring, and the new management opted instead for expanded licensing of device technology, culminating in licensing agreements announced earlier this month.
“The overall significance is that it gives us the opportunity to expand into international markets and expand into the vertical market domestically,” said Gary Hermansen, senior vice president and general manager of Glenayre’s Consumer Products Group. “We’re still focused domestically, but this expands us internationally, where we haven’t had as much impact.”
The agreements also dramatically expand Glenayre’s ability to create new two-way paging products and devices, particularly wirelessly enabled mobile computing devices. Glenayre has long wanted to add wireless technology to mobile computing devices and telemetry products, but never had the licenses to pursue those thoughts.
In addition, Glenayre has formed alliances with wireless data application software providers HiddenMind Technology Inc. and Infowave Software Inc. to enhance the value of its AccessLink II product. HiddenMind’s HiddenMessenger wireless communication platform will be integrated into all Glenayre paging devices for such functions as work flow processing and user group messaging. HiddenMind technology allows multiple device types to interact via the Internet.
Glenayre also plans to bundle Infowave’s Symmetry software with the AccessLink II. Symmetry is desktop software that extends Microsoft Outlook-based e-mail, calendar, personal schedule and contact list information to the AccessLink II pager. In addition, users can respond to e-mail from the pager and query Outlook contact lists.
While it has effectively exited the paging infrastructure business, Motorola said expanding its ReFLEX licensing agreement to Glenayre does not mean it is leaving the paging device space as well. Motorola characterized the licensing agreement with Glenayre as a way of driving the ReFLEX market.
“It’s to further promote ReFLEX as a protocol,” said Motorola spokeswoman Amanda Dahlke. “The more manufacturers out there and the more applications written to it, the more opportunity consumers have to purchase these devices.”
She said the company is forming a new sub-unit of its Personal Communications Sector-which oversees paging and other wireless devices-dedicated to paging, called Worldwide Paging Operations. It will have its own management team and will report to the head of PCS. Mike Pellon, currently vice president and general manager of Motorola’s U.S. Paging Operations, will assume responsibility of the new unit.
The new group “is focused on growth on two-way paging in particular,” Dahlke said.
Sterling said he expects even more such licensing agreements from Motorola in the next year.
“The point is, there’s only two companies making two-way units, not counting Research In Motion,” he said. “You have to create enough handsets in the market so people will buy them. But two manufacturers are not enough. They’ve got to take some gambles now and push the envelope on the handset side. The only way to do that is to get as many devices out in the market as possible. The only way to do that is to license the technology to as many manufacturers as possible.”
Rumors have surfaced that a third well-known consumer electronics company may enter the two-way paging market soon, with Samsung at the top of the list of speculative firms. Dahlke could not comment directly on any such rumor, but would not rule out the possibility of Motorola extending ReFLEX licensing to other manufacturers.
Hermansen said he would like a third manufacturer in the space.
“It would start to create segmentation in the market,” he said. “If another consumer electronics company were to offer high-end or low-end products, you can start to address different market segments. I think that would be awesome. I think it would be great if three or four more players were in the market providing solutions.”
