InterDigital Inc (IDCC)

[nieves]

PRODUCT PROFILE: Nextel Gets Nudged in Push-To-Talk Realm
Apr 17, 2003 (NewsFactor.com via COMTEX) -- By now, most TV viewers have seen the ads with actor Dennis Franz using Nextel's (Nasdaq: NXTL) Direct Connect instant communication service to chat with his wife as he shops. Departing from his well-known tough guy character, New York cop Andy Sipowicz, Franz does his best to persuade the viewing audience that he really is not a shill for the carrier.
Maybe he means it -- Nextel might not actually need his help. The company has virtually cornered the push-to-talk (PTT) market with its offering of a walkie-talkie type connection for mobile phones . Still, that has not stopped other IT providers and operators from going after a piece of the action.
Togabi Technologies is one of them; PacketChat is its alternative to Nextel's voice over IP (VoIP) wireless packet-data service. Togabi is taking a two-pronged approach to the market, providing PacketChat as a client to phone manufacturers and as a server product to wireless operators.
The Push for PTT
Togabi can take on Nextel because PacketChat works on more networks, says company spokesperson Andrew Rimkus. Direct Connect is available only on Motorola's (NYSE: MOT) iDEN system and handsets, but PacketChat runs on the more widespread GSM/GPRS and CDMA 2000 1x wireless networks, as well as Wi-Fi (802.11) local-area networks.
"The packet-data networks needed to support push-to-talk are being set up by all of the major carriers, and this quick communication channel is now gaining a lot of traction," Rimkus told NewsFactor. "We have the software they need to get PTT up and running."
Targeting Device Makers
PacketChat offers instant one-to-one and one-to-many PTT calls and is based on standard IP technologies. It can be integrated into any 2.5G or 3G wireless handset, or distributed through infrastructure partners to wireless operators.
Togabi recently inked a deal with handset maker Samsung for its product, and has similar agreements with IT providers HP (NYSE: HPQ) and Commworks. PacketChat is sold as a software license on a one-time, per-subscriber basis. Commercial availability is expected in summer 2003, with a number of GPRS and CDMA carriers worldwide currently conducting trials, said Rimkus.
End users of the service are expected to come from both the enterprise and consumer markets.
Instant Gratification
"We see push-to-talk as the first application for our software, with other real-time voice and data applications, such as multimedia, group-entertainment content delivery, and multiplayer games eventually using the same infrastructure," he said. Togabi sees PTT as instant messaging with voice, and foresees carriers offering chat groups as well as information services like 411 number lookup.
Indeed, PTT has gained traction among major players in the wireless industry. Verizon Wireless , Sprint PCS (NYSE: PCS) and AT&T Wireless (NYSE: AWE) all reportedly have plans to deploy such services in the near future. Nokia (NYSE: NOK) is developing PTT products for GSM/GPRS networks, and Qualcomm (Nasdaq: QCOM) has Qchat, a CDMA version of PTT for which Nextel now holds exclusive rights.
Togabi competes directly with Sonim and Winphoria , two companies that offer similar software-based systems.
Challenges Ahead
"Nextel has demonstrated a higher RPU (revenue per user) than anyone else, based primarily on its Direct Connect service," said IDC wireless analyst Keith Waryas, "but the uniqueness is wearing off as others enter the market." He did note that Nextel aims to stay ahead of the curve by extending Direct Connect from a local to a nationwide service.
For Togabi and others, though, there are some challenges. PTT suffers from latency -- pauses of a second or more between pushing the phone's walkie-talkie button and receiving a call -- that is typical of handling voice calls on a data network. Also, Waryas told NewsFactor, customers have to purchase a new handset, and widespread acceptance of PTT will hinge on roaming and/or interoperability agreements among carriers.
That said, Direct Connect has developed a strong following among construction and transportation businesses that appreciate the convenience of instant communications. "If location-based applications can be added, PTT could also generate interest as a sales force automation tool," Waryas said. "There is some opportunity for these services."
By Jay Wrolstad
URL: http://www.nextel.com http://www.togabi.com http://www.motorola.com http://www.samsung.com http://www.hp.com http://www.verizonws.com http://www.sprintpcs.com http://www.attws.com http://www.nokia.com http://www.qualcomm.com http://www.sonim.com http://www.winphoria.com http://www.idc.com
Copyright (C) 2003, NewsFactor Network. All rights reserved
-0-