Siemens, Motorola partner on 3G handset delivery

Motorola Inc. and Siemens AG have formed an alliance for the development of 3G (third-generation) mobile phones, the companies announced April 15.

Beginning in the fourth quarter, Motorola, of Austin, Tex., will provide Siemens with its first 3G terminals, specifically customized for the Munich company, as part of a silicon-to-software, integrated UMTS (Universal Mobile Telecommunications System) service agreement, the companies said in a joint statement.

Financial terms of the agreement were not disclosed.

Siemens has long been looking for a 3G partner. The company was initially looking to follow the example set by Sweden’s L.M. Ericsson Telephone Co. and Japan’s Sony Corp., which merged their mobile-phone operations in October. However, after potential partner Toshiba Corp. nixed its alliance with Siemens in December, Siemens indicated it might have to brave the 3G market on its own.

As part of the alliance, Motorola will provide Siemens with its 3G UMTS platform, called i.300, which includes an advanced chipset, UMTS application platform software, development tools, reference design, test environments and type certification support, the companies said. The first UMTS terminals based on the i.300 platform are expected to be available in early 2004, Siemens and Motorola said.

“We basically provide essentially 100 per cent of all key components…for the Siemens 3G handset,” said Mike Zafirovski, president of Motorola’s personal communications sector, on a public conference call on April 15. Motorola will provide all the front end, radio frequency, and power-management technology and the Dragonball application processor, he said. “It’s a full chip set, plus the communications engine…It is truly a total platform win for Motorola.”

The first device that Siemens intends to bring to market in 2002 will be based on Motorola’s A820 mobile phone, the companies said.

Essentially, Siemens will offer a Motorola phone with a Siemens brand name on it, said John Thode, vice-president and general manager of 3G handset development in Motorola’s personal communications sector.

“There’s lots of opportunity for Siemens to differentiate themselves starting with the A820,” he said, referring to Motorola’s A820 3G mobile handset, which has a built-in video camera and supports audio and video files as e-mail attachments.

“We think it’s a very good thing for both companies from the perspective of enabling the adoption rate and decreasing the risk and time required to interoperate the solution,” he said. Executives said Motorola remained committed to its brand in Europe.

At the CeBIT trade show in Germany last month, Motorola and Siemens announced separately that they would have 3G handsets for the European market available by the fourth quarter, though Siemens was vague on the details of its planned mobile-phone product.

Motorola and Siemens will face stiff competition from companies like Nokia Corp., which announced a Sept. 26 launch date for its first mass-market 3G mobile-phone service and handsets. Samsung Electronics Co. Ltd. and Sony Ericsson Mobile Communications are also aiming for 3G European product launches by the end of the year, though both have said that 3G products won’t begin to surface in stores in any meaningful way until 2003.

(George A. Chidi Jr. in Boston contributed to this report.)