Motorola and Cisco Systems said on Monday they will jointly build a system that will provide Internet access over wireless networks to portable devices.
The system, to be developed over the next five years, will use Internet protocol -- the technology that sends data throughout the Net -- to send voice and data to cell phones, laptops, and handheld computers.
Motorola (MOT) and Cisco (CSCO) said they plan to spend US$1 billion on the venture, a move both companies see as vital for keeping up with rivals. More important, neither company wants to be left behind as more people turn to portable devices to tap their home computer networks.
"The market, while it is growing rapidly, is characterized by even bigger competition out there. And just saying that you do better quality voice is not enough anymore," said Don Listwin, executive vice president at Cisco, at a wireless-industry convention in New Orleans.
Cisco and Motorola aren't the only ones working on wireless voice and data technologies. Cisco's biggest competitor, Ascend Communications, and its soon-to-be-parent, Lucent Technologies, are in the process of developing high-speed wireless systems for voice and data traffic. Other competitors, including Nortel Networks and France's Alcatel, are also working on similar systems.
With demand for wireless calling and Internet access steeply on the rise, companies see a huge market for services that combine the two technologies. In the next six years, the number of wireless phone customers worldwide is expected to soar to 1 billion -- about equal to the projected number of Internet users.
Cisco and Motorola plan to publish proposed technical standards for their wireless networking system in May, and expect to launch some joint networking services by the end of the year. The two companies said their strategy is to create an "open architecture" -- a set of standards that other technology developers can base new services and equipment on.
The system will also tie in with Motorola's new product plans. The company also unveiled its i1000plus, a handset with a small screen that supports wireless Internet access.
