Michel Alard didn't intend to take on giants Nokia (NOK ) and Motorola (MOT ) when he co-founded his company, Wavecom (WVCM ), in 1993. He wanted to be their servant. Wavecom, based in Issy-les-Moulineaux, France, began as a consultant to wireless manufacturers. Then, in 1996, Alard got an idea: He could create a ready-to-go kit containing the basic components of a cell phone that would allow phonemakers to churn out new models in a fraction of the normal time. Suddenly, a new business was born.
Soon, Wavecom was shipping the inexpensive but sophisticated kits to everyone from China's TCL Mobile Communications to Japan's NEC (NIPNY ). More than 1 million modules have been sold since 1999. Wavecom's sales nearly quintupled last year, to $290 million, and net income hit $8 million, up from a loss in 2000.
Selling cell phone kits seems like a simple enough idea. But in fact it represents a major innovation. Traditionally, companies such as Nokia have engineered their handsets in-house. Alard's modules eliminate that need--a boon for phonemakers that lack Nokia's technical prowess. Coupled with the appropriate software, Wavecom's kits can be slapped into plastic cases, and sold cheap. In short, Alard, 47, believes wireless phones are becoming commodities--just as computers did before them. He hopes to cash in by providing the hardware for future cell phones, while Microsoft (SCH ) and others provide the software. Alard also thinks his modules can add wireless communication capabilities to autos and industrial machines.
A graduate of France's Ecole Nationale Supérieure des Télécommunications and a former engineer at a France Télécom venture, Alard doesn't see himself as a revolutionary. Yet his phone kits could shake the wireless business to its roots. Watch out, giants.