Sprint Plans To Open Center To Foster Connected Devices -Exec

16th Jun 2010 19:19

By Roger Cheng Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Sprint Nextel Corp. (S) plans to open up a center to help foster the development of devices using a cellular connection later this year, according to a company executive. As the traditional business of providing cellphone voice and data services begins to peak, carriers are racing to stake a claim in a new area commonly known as connected devices. Sprint, which moved early in the area and pioneered a wholesale business model with the Amazon.com Inc. (AMZN) Kindle, has since fallen behind its larger peers Verizon Wireless and AT&T Inc. (T). But Sprint is making more of a concerted effort in the area. The company is looking at creating a machine-to-machine collaboration center in the San Francisco area to tap the local tech talent, said Danny Bowman, president of Sprint's integrated solutions group, who points to the area of digital signs as one opportunity for growth. The company believes its lead in fourth-generation, or 4G, technology gives it an edge when attracting customers looking at this new area. "All of us are in building mode," Bowman said in an interview Wednesday. "The key is finding the right partnerships." The collaboration center follows a similar move by Verizon Wireless, which partnered with Qualcomm Inc. (QCOM) in July to form a joint venture designed to spur more connected devices. AT&T has gotten aggressive and vocal in its own effort. For the first time, the telecom giant disclosed that it had 5.8 million connected devices on its network, having added 1.1 million in the first quarter. Verizon Wireless, which is owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD), also disclosed for the first time that it had 7.3 million connected devices. Sprint hasn't disclosed any specific numbers, but Bowman said that there were "a couple of million" devices on its network. The company does have some catching up to do. The wireless technology it uses for 3G and 4G is limited to only parts of the world, meaning it isn't suitable for consumer devices. For example, while the Kindle initially used Sprint's network to wirelessly download e-books, Amazon.com eventually switched to AT&T because of its ability to roam overseas. Bowman said he sees an opportunity to add cellular connections to digital signs, from large billboards to smaller flat-screen televisions found in malls, stores or by subway stops. He noted that many of the digital signs using an older telephone line or DSL line, likely run by Verizon or AT&T, are likely less inclined to cannibalize their own businesses. "This is disruptive to the traditional methods of connection," he said. Sprint, however, can be free to aggressively go after the market because it is solely focused on wireless, and Bowman said the company is willing to work with customers on the appropriate business model. A faster 4G connection could allow for more interactive displays, including features such as a "human kiosk" with clerks who can remotely help customers with questions or problems. "This is one of the larger spaces over time," he said. The move to a wireless network could potentially be more expensive and require upfront investment, but Bowman said that with an increased amount of content put on the digital signs and the increased mobility, the owner would get a payback on their investment after about four months. Sprint shares fell 2.1% to $4.79. -By Roger Cheng, Dow Jones Newswires; 212-416-2153; [email protected] (END) Dow Jones Newswires June 16, 2010 14:19 ET (18:19 GMT)