HANDSETS ABOUND DESPITE SHAKY DEMAND

Kyocera Wireless and Sony last week launched high-end handheld devices into a wireless market that is expecting to continue seeing soft demand at best.

At last week's TechXNY/PCExpo in New York, Kyocera unveiled its 7135 smartphone, which succeeds the QCP 6035 but with a smaller form factor and a high-resolution screen with 65,000 colors. It also can send and receive data at speeds of up to 153 kb/s.

“We expect it will have greater enterprise uptake,” said Rick Getter, Kyocera's senior vice president of marketing.

Historically, the company's principal distribution channel has been wireless carriers and their consumer customers, though it recently created an enterprise sales force. “With the converged device, the usage paradigm is different,” Getter said. “We can provide the platform, and carriers provide the wireless conduit.”

Kyocera, which currently provides CDMA2000 1X-capable phones to Verizon and Sprint PCS, has aligned itself with customer relationship management companies such as Oracle and Siebel to help drive its smart phones deeper into the enterprise. The 7135 model will be available in the U.S. during the fourth quarter.

Such a strategy may save the company from entering at the market's nadir. Sony however, is forging ahead with plans to launch its Clie T665C handheld, which will be priced at $399.99. At the same time Sony decided to drop the price of its earlier model, the Clie T615C, to $299.99.

Although handheld prices most likely will continue to fall, the rise of converged devices such Kyocera's smart phones could put pressure on the PDA market. “We see more uptake for integrated devices than PDAs,” said John Jackson, an analyst for The Yankee Group. “Whether the demand side rises to meet the hype, that is the million-dollar question. But the 7135 is a long way from the clunky initial [smartphone] efforts.”

There are, however, cost challenges for companies bringing high-end devices to consumers. “Companies need to figure out how to target the enterprise because carriers haven't been effective in this, which raises a distribution dilemma,” Jackson said.