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Host of wireless providers preparing for iPhone battle

By David Ho

Cox News Service

Sunday, June 10, 2007

To hear many wireless companies talk, the iPhone from Apple and AT&T is a welcome industry addition.

It will spur interest in mobile technology and music phones, they say, while posing little competition because of its high price.

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But that hasn't stopped carriers and handset makers from bracing for a fight.

"iPhone killer" is the popular behind-the-scenes term at many companies, said Jupiter Research analyst Michael Gartenberg.

"Expect to hear that phrase a lot in the months ahead as other

handset vendors or carriers who aren't offering the iPhone are going to try to offer equivalent products," Gartenberg said.

While Apple dominated the digital music world with the iPod and iTunes, questions remain about whether it can repeat that success in the wireless market.

Verizon Wireless

Verizon Wireless, which passed on being an iPhone carrier and is the chief wireless rival of San Antonio-based AT&T Inc., is working with a handset maker to launch an iPhone response later this summer, executives say.

With the iPhone initially an AT&T exclusive, New York-based Verizon also is emphasizing its network as a superior choice.

"For us to lose sight of that and focus on a single device wouldn't be good business," spokeswoman Brenda Raney said.

But by embracing Apple's product and hot brand name, AT&T has made itself stand out, said Hugues De La Vergne, a Gartner Inc. analyst.

Sprint Nextel Corp.

No. 3 carrier Sprint Nextel Corp. has its own response: Bring it on.

"Sprint has been leading the wireless industry in the area of music," said Oliver Valente, Sprint Nextel's senior vice president of product management and development. "It's a very competitive industry right now, and Sprint welcomes the competition."

The digital music player industry where Apple dominates makes money from hardware sales and not services, but it is the reverse with wireless, Valente said.

"We're talking apples and oranges. No pun intended," he said.

This means a high-priced handset such as the iPhone, which is to cost $499 and up, "will not be a mass-market mover," Valente said. He said music phones costing less than $100 sell the most.

Nokia Corp.

Nokia Corp., the world's No. 1 cell phone maker with more than a third of the global market, sees the iPhone as validating its vision for phone handsets that merge many technologies, said Bill Plummer, Nokia's North American vice president for multimedia.

But Gartenberg warned that people who are "dismissive of Apple's role in the phone market are going to do so at their own peril."

LG Electronics

South Korea's LG Electronics teamed up with the fashion brand Prada to create a large touch-screen phone that's available in Europe and bears more than a little resemblance to the iPhone. Samsung Electronics' Ultra Smart F700 announced in February offers up a phone-spanning touch screen plus a slide-out keyboard.

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