Monday, August 22, 2005

Will Carriers Support Dual-Mode Handsets? writes that Motorola and Cisco are teaming up to develop dual-mode handsets that combine WLAN IP telephony and mobile phone technologies. According to the article, it is predicted that in the next two years enterprises will have mobile phones using Wi-Fi networks inside the office that will seamlessly hand off to cellular networks outside.

Analyst Ellen Daley at Forrester commented on how both companies are trying to meet both enterprise and user demands. "The key to a lot of this is that everyone wants simple calling capabilities. They're easy to use and easy to manage. Motorola did that effectively with Cisco so the phone can act as another extension within the enterprise and it's pretty easy to understand," she said.

Daley pointed out that while the manufacturers are making progress on dual-modes, a critical element is missing. Yep, it's the carriers.

Remarked Daley, "Cisco and Motorola came together for something that works on cellular and WLAN networks, but they aren't requiring a carrier. That's a naive decision. I think it's a great offering, but they're missing an ingredient: which carrier is going to allow that handset with Wi-Fi calling capabilities on its cellular network?"

Daley predicted handset pricing to drop to mass market levels by 2007, and thought Cingular would be the first to carry them. "Because so many companies have WLANs deployed, they're hoping to reduce cellular costs by using the WLAN for mobile calls. Over 50% of companies are interested in [Wi-Fi cellular calling], but it's not a technology stopper. It's really authorization of the handset," Daley commented.

Will the carriers buy into a dual-mode universe? It'll be hard to shake off their "closed garden" mentality, but it's usually good business to keep your high-ARPU enterprise customers happy, in an ideal, common-sensical world that is...