UPDATE 2: Cisco, Motorola Build Wireless 'Net

Cisco Systems Inc. and Motorola Inc. today said that they will jointly invest US$1 billion [B] 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 Internet Protocol-based wireless networks aimed at uniting different standards for wireless services worldwide, company officials said at a press conference today during the Wireless '99 trade show in New Orleans.

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 [B] 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 vapor 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. (IDC).

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. Today'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, Gillott said.

Cisco, in San Jose, California, can be reached at +1-408-526-4000 or on the Web at http://www.cisco.com/. Motorola, in Schaumberg, Illinois, is at +1-847-576-5000 or http://www.mot.com/.

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