Cisco Systems Inc. and Motorola Inc. announced they will jointly invest US$1 billion over the next four to five years to develop and deliver a global wireless Internet architecture.
As the first step, the companies will develop a “New World” framework for IP-based wireless networks aimed at uniting different standards for wireless services worldwide, company officials said at a press conference during the Wireless ’99 trade show in New Orleans last month.
The architecture is expected to work across existing wireless standards, including GSM (global system for mobile communication), CDMA (code division multiple access) and TDMA (time division multiple access) that will allow devices that can be used anytime and anywhere worldwide, the officials said.
The alliance is designed to create an open Internet-based platform for integrated data, voice and video services over cellular networks, that could help to jump-start a new category of advanced products and services. The alliance is not exclusive and officials from the companies said that their plans already are drawing industry support.
“The really important part is the openness of this,” said Don Listwin, Cisco’s executive vice-president.
In addition to a joint investment of $1 billion over four or five years, the two companies also plan to cross-license technology and develop complementary products, as well as jointly set up four “Internet Solutions Centers” that will encourage third-parties to develop and create new wireless services and products.
A white paper on the architecture is expected to be released in May, with services being rolled out within the next few months, Listwin said.
Advanced wireless services can be anticipated and will include offerings such as integrated messaging and easier methods for using credit cards to pay for things such as cab fare, which now often involve a laborious process to authorize the transaction.
But at least one industry analyst detected a whiff of vapour in the announcement.
“What they’re saying is, ‘Here’s our vision, we’ll get back to you in May,” said Ian Gillott of International Data Corp.
Although Cisco and Motorola said that products for their new wireless Internet future are expected to be on the market by the fourth quarter of this year, Gillott said, “I’m not holding my breath here.”
The truth of the situation is not quite as compelling as the announcements might sound.
“There’s only one problem here, you can’t actually buy any services,” Gillott said.
Nortel Networks and Bay Networks Inc. announced wireless strategies last year, which means that Cisco is trying to catch up with those competitors, he said. Cisco’s announcement should take care of speculation among industry observers about what company Cisco would chose to buy or partner with to make its entry into the wireless Internet market, said Gillott, who was not at the Wireless ’99 show, but listened to a replay of the press conference.
Mark Lowenstein, an analyst at The Yankee Group who attended the trade show, thinks that Cisco and Motorola are working “in accelerated mode” to match the strategies of competitors, who also are taking the partnership route in the wireless Internet market.
The alliance with Cisco will help Motorola fill a gap in its wireless product line. For Cisco, the partnership provides “an important entryway into the wireless market.”
Press and analysts during a question-and-answer session during the press conference wanted to know how the companies will manage to develop an architecture that can bridge the various existing standards.
Lowenstein apparently isn’t one of the doubters. Asked if he thinks that the companies can pull off their plans for such an architecture, he said, “They’re going to have to over time.”
Cisco and Motorola realize that the “tower of Babel in standards that we have in the U.S.” has got to eventually end in order for wireless services in the United States to reach the same level as is available in other countries, he said.