Motorola, Huawei tie up for UMTS

Motorola and Huawei Technologies today said they are combining their UMTS portfolios in a pan-pacific joint venture that will allow them to split R&D costs and boost Motorola's lagging 3G market share.

Though the companies did not reveal any financial terms of the partnership, Motorola Networks and Enterprise President Greg Brown said Motorola would be the public face of the venture, leading the marketing, sales, design and deployment of the network as well bringing to the table 120 Motorola GSM customers that have not yet announced UMTS plans. Huawei will be providing its phase 1 UMTS and high-speed downlink and uplink packet access (HSDPA/HSUPA) base station designs, which will serve as the basic reference for a jointly-developed product line built in the venture's new R&D center in Shanghai, China.

The deal sounds very similar to an OEM agreement, in which Huawei provides its core technology and cheap Chinese manufacturing capabilities, while Motorola sells the finished product. In fact, Brown said Motorola will be branding the final joint product under its own name to its current customer portfolio, and it is not clear whether Huawei will continue to market and sell its UMTS line independently.

The collaboration will provide many other benefits beyond scale, Brown said. It will give both companies time-to-market advantages and the pooling of R&D resources will allow the companies to rapidly evolve the overall UMTS product line through the various iterations of HSDPA, HSUPA and long-term evolution (LTE) technologies, Brown said. But what sets this venture apart from most, Brown said, is that it is very focused on specific next-generation technology, not massive top-to-bottom mergers being undertaken by competitors Lucent Technologies and Alcatel or Nokia and Siemens. By focusing on UMTS and dividing the two companies' roles among their specialties, Motorola and Huawei will be much more nimble and efficient from day one, while their competitors are focusing on integrating their businesses, he said.

"What it's not is the consolidation of legacy technologies," Brown said. "It puts us in a disruptively positive, disruptively low-cost position [in which] we can expand our portfolio and pass the savings onto our customers."

Motorola unveiled the new partnership at an analyst event in Rosemont, Ill., near its corporate headquarters outside of Chicago. At the two-day event, Motorola also unveiled several new phone lines for the year, including the successor to the RAZR, a device called the KRZR that slims down the width as well as the depth of the phone. While Motorola expects the KRZR to have significant appeal among certain demographic groups such as women and in the Asian markets, it certainly isn't giving up on the RAZR, its most popular phone in history. In fact, Motorola released several new RAZR models at the event, including its first HSDPA phone, built with an ARM 11 processor and a later-generation HSDPA chipset, which can support a maximum theoretical downlink capacity of 3.8 Mb/s.