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Cisco/Moto Cellular/WiFi Deal is Dead/Gone

Carmen Nobel
Globalcomm News Analysis
Carmen Nobel

A cellular/WiFi roaming technology partnership between Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT) has gone the way of the dodo. And the culprit could be carrier reluctance to buy in to some vendor fixed/mobile convergence ideas.

Last July, the two companies announced plans to deliver "a seamless enterprise mobility solution that will include Wireless Local Area Networking (WLAN) Internet Protocol (IP) telephony and cellular phone technologies." (See Moto, Cisco Go Dualmode.) In other words, the two would cobble together technologies that would allow mobile handsets to roam seamlessly between WiFi and cellular networks. And the products were supposed to hit the market sometime this year. It was to be a follow-on to Motorola's CN620, a heavily hyped device born of a partnership with Proxim Wireless Corp. and Avaya Inc. . (See Moto Ramps Up Convergence.)

But Motorola confirmed late Tuesday that it quietly called the deal off late last month, blaming initial carrier uncertainty about the companies' plans.

"Because the development process was so long, instead of bringing the next generation of the CN620 to market, we've decided to bypass that and go right into unified communications," says Lisa Barclay, a spokeswoman for Motorola.

"This was an industry first, and the initial device didn't include features that were important to cellular carriers only. For the next round, we'll be much more tightly integrated with them. We were really focused on enterprise needs with the first product. We focused on enterprise needs, figuring that the carriers would say that was great... Not so much."

Now that the deal is kaput, a broad launch of a new generation of fixed/mobile convergence devices won't happen until the first half of 2007. Cingular Wireless has been in trials with the CN620, and the plan is to migrate the trial customers to the next-generation phones. There won't be a broad release of the CN620. Barclay declines to say exactly how the company will meet its "unified communications" goals to appease carriers, although industry buzz has been tending toward the Unlicensed Mobile Access (UMA) standard. Motorola has already announced a handset, the A910, that supports UMA. (See UMA Services Near Reality.)

Industry insiders speculate that the decision to call off the deal with Cisco might have something to do with bad blood between other business units within the companies.

"Motorola got pissed at Cisco because of the Scientific Atlanta acquisition," says one source familiar with the situation. "It made Cisco a competitor in the set-top box market." (See Cisco to Acquire Scientific-Atlanta.)

"That had nothing to do with it," Motorola's Barclay says. She says the problem was "carrier uncertainty around the value proposition."

That said, Motorola is hoping to support all major PBX systems with its upcoming devices, Barclay says.

"Motorola cannot ignore Cisco's position in the enterprise PBX market and will support them along with Nortel Networks Ltd. , Avaya and others," says Ken Dulaney, VP of mobile computing at the research firm Gartner Inc. .

Cisco was not immediately available for comment.

— Carmen Nobel, Senior Editor, Light Reading

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User Rank: Light Beer
12/5/2012 | 3:55:59 AM
re: Cisco/Moto Cellular/WiFi Deal is Dead/Gone
that the Cisco-moto combination isn't compelling enough?

A more powerful combo would be Alcatel-Lucent or Ericsson-someone. What does Moto bring to the table in FMC?

User Rank: Light Beer
12/5/2012 | 3:55:57 AM
re: Cisco/Moto Cellular/WiFi Deal is Dead/Gone
no chance that this happened because of scientific atlanta. Large companies face compete and cooperate across product lines all the time.

It would be nice to know who started this. Who's the dumper and who's the dumpee?

- blj
User Rank: Light Beer
12/5/2012 | 3:55:56 AM
re: Cisco/Moto Cellular/WiFi Deal is Dead/Gone
The carriers/MSO's are moving to IMS solutions for seamless mobility. I think this solution failed because it lacks IMS support and it would've vendor locked the carriers to CSCO/MOT.

Both CSCO & MOT are in trouble in the IMS space. CSCO chose to distribute complexity to the endpoints/edge, which flies in the face of IMS. MOT has zero for an IMS story. They're obviously not well positioned with carriers/MSO's looking to deploy IMS in the next 2 years. The Street won't be kind.

Carmen Nobel
Carmen Nobel,
User Rank: Light Beer
12/5/2012 | 3:55:56 AM
re: Cisco/Moto Cellular/WiFi Deal is Dead/Gone
Where do you see UMA coming into play?
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