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Motorola Switches Wireless Strategy

Attempting to right itself in a difficult wireless business climate, Motorola said Monday that it would no longer keep its technology to itself and, instead, will license it to other device vendors.

For the first time in its company history, Motorola said its Semiconductor Products Sector -- the primary supplier of embedded solutions to Motorola's cellular handset business -- intends to take its portfolio of 2.5G and 3G platforms to competitors.

The Schaumburg, IL-based company made its annoucement at the same time that Yankee Group released findings that third-generation wireless technology, although expensive, remains essential to the success of European wireless operators.

The 2.5G and 3G platforms are total system solutions that bundle the chipset, software, development tools, reference design, test environments and type certification support with best-in-class system cost. These platforms are engineered to enable other global manufacturers of mobile communications products -- whether original equipment manufacturers (OEM) or original device manufacturers (ODM) -- to develop state-of-the-art products to enable anytime, anywhere communication for consumers.

Calling the new strategy "radical and rule-changing," company CEO Christopher B. Galvin, Motorola said the strategy was necessary to "redefine success in an industry no being rocked by disruptions."

The company said in a statement that it hoped its change in strategy will encourage competition by making it easier for more vendors, particularly smaller ones, to develop wireless phones.

The move also is a victory for Java, which Motorola supports in its platform.

Like other handset and wireless technology vendors, Motorola has been rocked by a series of bad financial reports in the last year.

Yankee Group predicts that European operators will invest a total of $274 billion to upgrade to 3G in the next five years. It also predicts that consumer and enterprise adoption of 2.5G GPRS services will start increasing rapidly by the end of 2002 and 3G services will be widespread by the end of 2004.

"Recent opinions on 3G have almost exclusively focused on the short term and consequently have been rather pessimistic," said Simone Roberts, senior analyst at the Yankee Group. "We take the approach that 3G is a long-term strategy and must be viewed as such. The vast majority of 3G operators will survive the next two to three years and will go on to achieve an acceptable return on investments."

--allNetDevices.com contributed to this article.