Motorola, DoCoMo seal 3G phone deal

TOKYO: Motorola Inc. and NTT DoCoMo Inc., Japan's top wireless operator, said that they would jointly develop third-generation (3G) handsets, aiming at a market largely out of reach for foreign manufacturers.

The new handsets, aimed for early 2005 launch in Japan, will work on both high-speed 3G networks and GSM/GPRS networks -- second-generation standards widely used in Europe and Asia -- making them operational outside Japan.

The widely expected deal is seen to give DoCoMo strong bargaining power in price talks with existing Japanese suppliers.

For Motorola, success in the technologically competitive Japanese market is expected to raise its profile as a 3G handset maker and help boost its global sales.

The high-end phones, capable of having access to regular Websites and compatible with wireless local area network (LAN) services, will be targeted at business users, DoCoMo and Motorola, the world's second-largest cellphone maker, said.

The phones will come in a shape similar to personal digital assistants (PDAs) and are expected to retail at a premium to existing 3G phones, which sell for around 30,000 yen ($273) apiece in Japan. The companies have yet to set a sales target.

DoCoMo currently sells 3G handsets from five Japanese makers -- NEC Corp., Sharp Corp., Fujitsu Ltd., Matsushita Electric Industrial Co. Ltd. and Mitsubishi Electric Corp.

It procures 3G handsets from Motorola only for limited rental use.

Global mobile phone suppliers such as Motorola and Nokia have had little presence in Japan, in large part because Japanese second-generation mobile phone networks were based on a unique, home-grown technology.

But that has changed since DoCoMo became the world's first mobile operator to launch a 3G service based on the global W-CDMA standard in 2001.