When Verizon Wireless introduced the Kyocera 6035 smart phone last week, many were surprised by how quickly the country’s largest wireless operator brought the new phone to market.
“Time to market is very important, and Verizon did a good job of getting the phone to market,” said Sylvia Panayi, senior analysts at The Strategis Group.
Jeffrey Nelson, executive director of corporate communications for Verizon Wireless, admitted the company was proud of itself for being the first U.S. carrier to launch the new generation of wireless smart phones.
“We have been working with Kyocera for a while on getting the phone to market,” said Nelson.
Even with a price of $500 when signing up for a one-year contract with Verizon Wireless, Nelson said the phone has been flying off the shelf, though it was just launched. That is good news for handset manufacturers and carriers hoping to launch additional smart phones into the U.S. market-a market many felt would not be receptive to a $500 phone.
“Demand has been staggering,” Nelson said. “It is a market that has been there since Palm [Inc.] was launched. The market was there and is still there, and people are clamoring for the device.”
While Kyocera said it expected the phone to be available by the end of the first quarter, the company said the actual release date was about a month ahead of schedule. The release gives the handset manufacturer a leg up on competitors looking to roll out similar devices in the United States.
“We believe in terms of timing we have the whole smart-phone market for at least six months,” said Rick Goetter, senior marketing manager for Kyocera Wireless Corp.
Most analysts see the market for smart phones as a small percentage of total handset sales, but note that should not deter manufacturers from launching the devices. Other handset manufacturers looking to launch smart phones include L.M. Ericsson, which has showed off its R380 World Smartphone using Symbian’s operating system, and Nokia Corp., which displayed a plastic prototype of its GSM handheld, dubbed the 9210 Communicator, last year.
“It won’t be a volume leader for manufacturers,” Panayi said. “But, I don’t see why volume has to be the final judge to success.”
Panayi noted the Kyocera phone had a good chance for success due to its robust nature and the backing of Verizon Wireless’ extensive network. In addition to the usual tri-mode phone features of Verizon Wireless handsets, the 6035 includes a slim-downed version of a Palm handheld running Palm 3.5 OS, a monochromatic screen only slightly smaller than current Palm handhelds and weighs in at around seven ounces. The phone also features 8 MB of internal memory, similar to high-end Palm handhelds.
“Kyocera did a good job of getting the size of the phone down,” Panayi added. “There is great potential for the phone, even though it is priced for the higher-end market.”
The pricing of the phone has not gone unnoticed by Verizon Wireless, which admitted the handset would not be the choice for many of its customers.
“It’s a price point that is definitely not for everyone,” Nelson said. “The price is out of the reach of many.”
But, Nelson said the phone was a perfect fit for people who are early technology adopters, or those who cannot live without their Palm’s.
“It’s for those who will see a bottom-line benefit from using the device. They know who they are,” explained Nelson.
Ericsson has said its smart phone will retail for around $700 when it is released in the U.S. market later this year.
Kyocera said the company has been receiving inquires about the handset since last Thanksgiving, and has even heard from many in Europe about the possibilities of a GSM/GPRS-model.
“It’s an obvious flagship device for us to break into other markets,” Goetter said. “We have received inquiries from Moscow to the Atlantic. We are looking at GSM technology for the phone but have not made any decisions.”
European interest in smart phones has seen a lot of activity recently with Microsoft Corp. recently announcing plans for its smart-phone-specific Stinger operating platform, which was announced at the 3GSM World Congress in France. Microsoft already has announced partnerships with Samsung, Sendo, Mitsubishi, VoiceStream Wireless Corp., T-mobile and Telstra.
But, last week, Psion plc reported it was dropping out of the smart-phone market, and instead focusing on industrial WAN and LAN products. Psion’s device, jointly developed with Motorola Inc., was scheduled to hit the market this summer. Psion blamed the slow uptake of WAP technology, delays in 2.5- and third-generation technology and the cost of spectrum licenses dragging down the supplier industry as reasons for its decision.
Prior to entering the European market, Kyocera hopes to reach agreements with additional U.S.-based CDMA carriers, including Sprint PCS. Sprint PCS was thought by many to have an inside track on being the first to market with the Kyocera phone because of its aggressive nature in rolling out new devices and services.
Sprint PCS said it has not made an announcement on carrying the phone, but has said it will carry one or two phones using the Palm OS software.
“I am waiting to talk with Sprint about its plans for offering the phone,” Panayi said.
If Sprint PCS does decide to offer the device, Kyocera said it is confident it can handle the increased demand.
“We are more than confident we can meet the demand needs as they are now, and meet any surges in the future,” Goetter said.
