Nokia unruffled as Motorola sells 2.5G and 3G technology

Finnish market leader probably won't get its wallet out to buy products from its biggest rival
Written by Graeme Wearden, Contributor

Motorola is claiming that its decision to start selling its proprietary mobile technology could redefine the whole mobile industry -- but rival handset manufacturer Nokia played down the news on Monday.

The US mobile phone maker -- which enjoys the second-largest market share behind Nokia -- is going to allow other companies to buy the fruits of its 2.5G (GPRS) and 3G research. Until now, semiconductor products such as Motorola's chipsets, protocols and mobile Java technology have not been available to third parties.

Motorola recently announced its second successive loss-making quarter, as it tries to cope with the recent slowdown in the growth of the mobile phone sector. It is hoping that its new strategy will help it succeed in what analyst group Gartner believes will be a £25bn market by 2004. "Motorola's new wireless strategy is radical and rule-changing -- with the potential to redefine success in an industry now being rocked by disruptions," said chairman and chief executive officer Christopher B. Galvin.

Many industry experts see Motorola as a market leader in GPRS, and it claims that by making its knowledge available -- at a price -- it might "redefine the value proposition across the wireless industry". But Nokia didn't sound overawed by the news.

"I very much doubt that we'd want to source equipment from Motorola. It sounds to me like they're targeting the smaller manufacturers," said a Nokia spokesman on Monday. He added that Nokia already shared some of its mobile technology with other companies.

"Nokia already licenses some products, such as our latest WAP browser. Motorola's move is very similar to that," he said.

Motorola's vice president Fred Shlapak explained that as mobile phones get more powerful and sophisticated, the sector increasingly resembles the PC market -- where products sell on the basis of "brand, style, and distribution". His comments probably rang a chord with Psion, which earlier this month said this was the reason it had sacked 250 staff and shelved plans to build a Bluetooth-enabled PDA.

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