Motorola Eyes iPod Market

Motorola is set to go after the market that Apple has broken open with its iPod handheld digital music player.

Motorola Chief Brand Officer Geoffrey Frost on Monday demonstrated the E398--a compact cell phone outfitted with stereo speakers, a digital camera and removable memory--at M.I.T.'s Designing Bits & Pieces Conference in Cambridge, Mass. The conference, sponsored by the Consumer Electronics Association, focuses on work being done at M.I.T.'s Consumer Electronics Lab.

The E398 is slated to begin shipping this summer, according to Frost. T-Mobile plans to market the E398 in Europe this fall, and Motorola is still talking to carriers about offering the product in the United States, he said. Pricing hasn't been finalized.

"It's sort of a mini iPod that makes phone calls," said Frost, who was wearing the E398 around his neck during his presentation and demonstrated the unit's stereo capability. "It's pretty cool," he added.

Frost positioned the E398 as a complement to the iPod. "I love my iPod," he said. "It has everything I own on it musically, and I do take it with me sometimes. I always have this [E398] with me."

Motorola plans to release another cell-phone/iPod device at the end of this year that also plays video, in addition to the E398's other features, Frost said.

The digital convergence market for home and small-business network integrators is huge, Frost said. "I think this is the future opportunity: the convergence space. It is going to be worth a lot of money," he said. "Add up what it's all worth today and double it, because you're adding really compelling services."

Motorola has "turned around" and is becoming a much bigger force in the digital marketplace, said Nicholas Negroponte, chairman of the M.I.T. Media Laboratory and a member of Motorola's board of directors. "It's a big change," Negroponte said. "It's obviously going to be a lot about mobility--seamless mobility."

Frost said Motorola aims to bring more digital technology to the table that allows consumers and business professionals to seamlessly access information and entertainment. The challenge for Motorola is to create what he called a "seamlessly intuitive" environment, he said. For example, Frost envisions consumers watching or listening to a sporting event in their living room, leaving their home and getting into a car, and then having a network automatically pick up the broadcast from the point where they left off.

Motorola's goal is to "embed intelligence" everywhere in the network, Frost said. He added that wireless networking is still in its infancy and compared the field to the automobile industry in its early days. "We don't refer to the [early] auto industry as 'horselessness.' Eventually, wireless networking will be second nature, just like the atmosphere," he said.

The challenge for Motorola and carriers, Frost noted, is to create experiences that consumers will pay more for.

Indeed, M.I.T.'s Negroponte said that although he has spent his entire adult life trying to make computers easier to use, they have become harder to use, less reliable and slower. Many manufacturers have used Moore's Law of increasing processor power to deliver products that are "bigger and fatter," he said, adding that this "feature-itis" has pushed the computer industry to the breaking point.

"This just cannot continue," Negroponte said. "I'm not picking on laptops or cell phones, or Microsoft vs. Dell."

Eventually, if you put more and more power into a battery, it becomes a bomb, according to Negroponte. "That is what is happening [in the computer industry] metaphorically," he said.

James Young, chairman of Teleportec, a Dallas-based maker of a 3-D image beaming system aimed at the videoconferencing market, agreed that the opportunity for home network integrators is huge. "The general public and most big business do not understand what this opportunity is and what it means," said Young, a former EDS executive.

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