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Optical/IP

Verizon's Slow BREW

Where's the BREW?

That's a good question, considering there are only four handsets that support Qualcomm Inc.'s (Nasdaq: QCOM) new binary runtime environment for wireless (BREW) available in the U.S. at the moment.

Verizon Wireless had two standard CDMA handsets that support BREW applications ready when it first rolled out the service in June of this year. These were the color Z-800 from Sharp Electronics Corp. (NYSE: KYO) and the Kyocera Corp. (NYSE: KYO) 3035e. At the end of September, the carrier rolled out the first BREW handset for its faster 1xRTT Express network, the color Motorola Inc. (NYSE: MOT) T720. This was followed last month by the green-screen VX10 from LG Electronics Inc..

Compare this to what some International carriers have managed: South Korean operator KT Freetel Co. was the first carrier to launch BREW services, back in November 2001. KTF now has over 20 color handsets available for its CDMA 1xRTT service.

So why has Verizon been so tardy in delivering color 1xRTT compatible handsets? After all, these are the products that are expected to drive gaming applications and other content from its "Get It Now" marketing campaign.

According to one source that we spoke to, the problem lies in the way that U.S. operators "set expectations" for their handset suppliers. Apparently, they're not aggressive enough in getting suppliers to deliver.

"This has to do with the behavior of U.S. carriers, not BREW or the handsets," the source says. "The Koreans manage their relationship with their suppliers very aggressively."

The vendors in the South Korean market are acutely aware of what the carriers are looking for -- this means delivering phones with color screens that run on high-speed networks and sport the latest feature sets. Americans, apparently, are a little slower on the uptake of the fancy new stuff.

"The American carriers… had been somewhat slow to appreciate color," the source continues.

Some analysts wonder what part production and integration difficulties might have played in the slow rollout of BREW-compatible devices. "Generally speaking, you might conclude that there have been some difficulties in getting 1x handsets on the market," says John Jackson, an analyst at the Yankee Group. "Also [BREW] software integration issues are taking up more time than had been expected."

Such issues, Jackson says, have delayed the rollout of new BREW-enabled handsets like the "Jupiter" from Samsung Electronics Co. Ltd. (Korea: SEC).

"I don't agree with that contention at all," says Jeremy James, product marketing manager of internet services at Qualcomm. Verizon, he says, has concentrated on offering phones that will work nationwide on its installed CDMA network, rather than offering lots of handsets for its new Express network.

"Remember, BREW does not require a 1x network to work," he says.

However, there are more 1x BREW handsets on the way, James noted. These include the aforementioned Jupiter from Samsung, the 4400 from LG, and others that we can't talk about yet.

The price of BREW handsets has also started to come down, according to Yankee's Jackson. The Sharp Z-800 was nearly $300 when initially launched; now the Motorola T720 is being offered for $99, after the mail-in rebate.

Verizon did not return our calls about the BREW issue by press time.

— Dan Jones, Senior Editor, Unstrung www.unstrung.com
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