Finally, a Continental Lift for Motorola?

Long a Euro laggard behind Nokia, the U.S. company's new Accompli handset has instant-messaging capabilities that could put it out front

By Stephen Baker

When I attend technology trade shows, like last month's Cebit fair in Hannover, Germany, I arrive with a list of 10 or 12 stories in my head. Some are sure bets, others mere hunches or prayers. I won't go into my entire Cebit list here, since a few may show up soon in the magazine or online. But I will say that this year, like last year and the one before, I included one longshot toward the bottom of my list: Signs of a turnaround for Motorola on the Continent.

In previous years, the Motorola story -- if you can call it that -- didn't survive a single day of Cebit reporting. It was enough to talk to a few people and compare the lonely Motorola stand with the mob scene at Nokia's booth. The Finns, it was clear, were clobbering the colossus of Schaumburg, Ill., in the world's richest wireless market.

But this year was different. Very different. One rainy Cebit morning, I found myself at the Motorola stand, and the strangest thing was happening -- I was having fun. I was playing with a wireless machine and people were pushing and prodding to look over my shoulder. I forgot the trade show's smoky air and my sore back, the downpour outside, and my wet shoes. In short, I forgot I was at Cebit. And suddenly it occurred to me that if I was having this much fun with a Motorola machine, perhaps the Motorola turnaround story, that phantom of Cebits past, could finally be taking shape.


  The device I was enjoying was a Palm-like cell phone with a touch screen and a clamshell lid. It's called the Accompli, and it could fit easily into a pants pocket. (But one word of advice for trade-show novices: Testing how well tiny and expensive machines fit into your pocket can lead to big trouble.) The Accompli is engineered for the next stage of the mobile Net, the so-called Generation 2.5. This system, which will be rolling out across Europe and much of the U.S. this year, is similar to Japan's popular I-mode. Its appeal is that users no longer have to place a call to log into the mobile Net. Instead, they're online, for sending or receiving messages, whenever their phone is switched on.

The catch? Users who want to jump into 2.5G need to buy new and expensive phones. It's this prospect that has Motorola excited. The American company has 2.5G phones already on the market, with others, like the Accompli, en route. Most of them cost $400 and up, just the pricey niche Motorola has been missing. Archrival Nokia, meanwhile, probably won't be shipping its own models until Halloween.

What was so fun about the Accompli? I was playing with an instant-chat feature, much like AOL's. The names listed in bold type, like AOL's Buddy List, were hypothetical friends who had their smart phones or PCs on. Theoretically, it wouldn't matter if they were in Madrid or Stockholm. The chatting is easy. You simply click on a buddy's name and send a few words from your smart phone or PC and zap it. The buddy responds, and the chat is on, whether you're in a train, a classroom, a bar, you name it.


  It works wonderfully. I could imagine using it at work for sending quick questions to colleagues. But the users who are likely to go gaga over mobile instant chat are kids -- particularly teens. In the last year, teenagers have been driving dramatic growth of mobile text messages (SMS) (see BW Online, 4/5/01, "Sanyo's Best-in-the-U.S. Cell Phone"). Some 20 billion of these messages now fly from phone to phone per month, five times as many as a year ago. Unlike SMS, which can take a minute or two, mobile instant chat is nearly simultaneous, and it allows for an instant reply.

This is SMS on steroids. Mobile chatting is already a phenomenon in Japan, and American companies such as Sprint and AOL are introducing the service in the U.S. It's likely to take off a bit more quickly in Europe than in America, simply because more kids have phones here -- and they all work on the same technology standard.

So will the Accompli launch Motorola's comeback? Is the long-awaited story materializing? (Hint: If it were, would I be breaking the news in the eighth paragraph of this column?)

No, no. Complications exist. First, the 2.5G market requires a rollout of new networks. That's a process that's taking place gradually throughout this year. That means that even if you buy a Accompli, it won't do many of its data tricks in large parts of Europe, and you won't have many friends to chat with. And sadly for Motorola, 2.5G isn't likely to make much of a splash until Nokia, the market leader, plunges into it late this year with an offering of new phones and an advertising blitz. Around Christmas, with the networks running, lots of phones available, and promotion in high gear, sales of the new phones should start to pick up. Motorola, chances are, won't get much credit for being there first.


  That's the lot of the underdog. Still, I was impressed with the Accompli, and I mentioned it to Tim Sheedy, the cell-phone analyst at International Data Corp. in London. Sheedy said he had tried out an early version of Accompli while vacationing in his native Australia. He had some technical complaints.

But what really bugged him was fashion. It seems that the clam-shelled Accompli has an uncanny resemblance to Motorola's StarTAC, a tiny phone associated with the company's tumble in the late '90s. So here was Sheedy whipping out his state-of-the-art phone, and his friends were ridiculing him for carrying a StarTAC. "It was embarrassing," he said. Finally, he switched to a Nokia and the hazing ceased.

One lesson for Motorola is not to underestimate the power of fashion in cell phones -- a point I've made before in this space (see BW Online, 3/6/01, "Sell Cell Phones Like PCs? Wrong Number"). Still, I left Cebit wishing I had one of those little Accomplis in my pocket. That's a good sign for Motorola. I'm bumping the turnaround story a couple notches up my list.

When he's not playing with new gizmos at trade shows, Baker covers technology for BusinessWeek from Paris

Edited by Thane Peterson

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