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new phones
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Posted by: amphibian

http://www.wirelessweek.com/index.a...reless+Internet

Its Virgin Mobile Pact Just The Latest Boost For Kyocera In U.S. Its Cell Phone Sales On Rise Japanese company plans to make a name for itself in crowded handset field

Monday July 15 12:00am
Investor's Business Daily

If you've ever been on a bad date, you might appreciate the "rescue ring." It's a feature on two new U.S. cell phones from Kyocera Wireless. Users can preset their phones to ring at any time. That offers a handy way to, among other things, cut short a bad date. Rescue rings are offered by Virgin Mobile USA. Its new youth-focused wireless plans are available only via two phones made by Kyocera Corp.'s wireless unit. The phones, aptly named the "Party Animal" and the "Super Model," cost $ 99 and $ 129 respectively. They play music, download ringtones, give movie listings and even do wake-up calls. Kyocera is Virgin Mobile's exclusive cell phone maker, at least through February. It got the gig because it was willing to design special phones targeting youths, says Virgin Mobile spokeswoman Kristi Gates. "Our total focus on the youth market is what differentiates us," she said. But while Virgin Mobile, a unit of U.K.-based Virgin Group, is new to the U.S. wireless market, Kyocera already is a player. It's a top seller of cell phones in the U.S., says Bryan Prohm, an analyst with Gartner Inc. Kyocera makes top-notch phones, say analysts. "They're extremely well-made," said Ken Hyers, an analyst with researcher In-Stat/MDR. The company specializes in phones that run on the code division multiple access, or CDMA, standard. The competing GSM, or Global System for Mobile Communications, is the largest worldwide, but CDMA is growing faster.

In the U.S., Verizon Wireless, Sprint PCS and Alltel use CDMA. Together they hold some 40% of the U.S. wireless market. Each sells Kyocera phones in its product mix. "Kyocera is definitely one of the strongest CDMA players," said Prohm. He also says it needs to beef up its handset lineup. Now the Virgin Mobile deal gives Kyocera one more way to get its phones into customers' hands. Virgin Mobile, which leases its transmission capacity from Sprint, sells its service through 21 Virgin stores, 450 Best Buy stores, 1,050 Target stores and some 2,200 other stores. "Any time you get exclusivity with a carrier, it's a positive thing" for a cell phone maker, Prohm said. Kyocera Wireless was formed in February 2000 when Japan's Kyocera Corp. bought Qualcomm Inc.'s cell phone business. It also got much CDMA know-how, since Qualcomm invented the standard. "We have a lot of engineers that wrote the CDMA specifications," said Dana Knight, director of marketing for San Diego-based Kyocera Wireless. Knight says Kyocera stresses innovation in its cell phones. In September, she says, the company plans to start selling the 7135, a handheld computer-phone combo. She says Kyocera has gained market share in the U.S. by bringing new products to market fast. But Kyocera faces hurdles. "It's probably the worst possible time for a new entrant to wireless," said In-Stat's Hyers. Nearly half of U.S. adults already have cell phones. Growth has stalled in the face of such high penetration. And Virgin Mobile, Hyers points out, is targeting customers who are tough to retain. "Youth are extremely fickle," he said. They switch carriers often, he says. Also, the Virgin brand name isn't seen as hip in the U.S. as it is in the U.K., Hyers says. There the parent company is big in a number of consumer categories, such as music and cola. Like most of Japan's tech companies, parent Kyocera had one of its worst years in 2001. It's the world's largest maker of ceramic casings for computers, and it makes other components as well. Sales fell 19.5% to $ 7.8 billion. Its wireless unit posted a loss of $ 50 million. But in the first quarter, Kyocera beat sales forecasts by 15%. Its wireless unit, which includes cell phone sales worldwide, posted sales of $ 1.2 billion and 8 million handsets. "It's a nice ray of sunshine in a very stormy technology area," said David Katz, manager of the Matrix Advisers Value Fund. "Over the last three months, the company has been one of the few technology firms that has been providing upbeat guidance." But he noted that wireless is a small part of Kyocera's overall business. Katz added Kyocera to the fund in January. He says it makes up 1.7% of Matrix's total $ 800 million fund.