Strategic alliance reflects emerging trends
LAS VEGAS–The strategic alliance jointly announced by Kenwood, Icom and Trident Microsystems during IWCE 2006 is reflective of a couple of trends that promise to drive the land mobile radio business for the future, according to an alliance spokesman.
Rhett Grotzinger, Trident’s vice president of sales and marketing, suggested in an interview last week that such alliances would be a key precursor for future success for many companies, and not just those in the land mobile radio sector.
“There is a tremendous amount of energy when individual companies bring their strengths together … we can accomplish more than we can by remaining isolationists,” Grotzinger said. “No company is going to be the solutions provider for the 21st century without creating alliances with complimentary organizations, and we see that in every facet of business.”
He acknowledged that when companies of the stature of Kenwood, Icom and Trident come together, “it raises some eyebrows, because in a lot of ways we’ve been competitors.” But he quickly added that, given pre-existing relationships between the participants, the alliance announcement shouldn’t have been al that surprising.
“Icom and Kenwood had a pre-existing relationship for over a year, and Trident has relationships with both Icom and Kenwood. So it just seemed to be a fit, as opposed to something that was forced. It organically happened.”
The working alliance between Kenwood and Icom jointly produced a common air interface for digital radio systems that was demonstrated at IWCE 2005.
The focus of the Kenwood/Icom/Trident alliance is to provide customers with “a soft migration, a seamless migration,” from analog to digital, Grotzinger said.
“We believe that if the opportunity proposition for a customer is to get rid of everything that they have and replace it with all new stuff, then the digital transition will be delayed interminably, because no one can afford to do that,” he said.
The desire to help customers avoid forklift transitions to digital might represent an accelerating trend, as Motorola also introduced a digital radio platform for the professional tier—for example, utilities, construction and transportation—during IWCE 2006 designed to provide customers with an analog-to-digital migration path. The company’s MOTOTRBO handsets operate in both digital and analog mode, and Motorola has pledged to work with dealers to hold the line on prices for the line, to keep them close to what these customers currently are paying for analog devices, to encourage them to make the migration.
Motorola introduced the line to its dealers at a meeting held in conjunction with IWCE 2006. According to Craig Chenicek, director of Motorola Radio Products, dealers were “very surprised” at the vendor’s pricing pledge.
“There was a general expectation that, like other digital products, this would be a higher-priced solution that only those who fit the traditional digital model—those with more money to spend in their operational budgets—would migrate to,” Chenicek said. “Now they will be able to sell MOTOTRBO instead of a professional analog radio at a similar price point, and have things like embedded GPS and text-messaging … and this radio interoperates with everything they’ve ever purchased.”
While customers, particularly those in the cash-strapped public-safety sector, long have struggled with the cost of digital radios and, as a result, the notion of implementing forklift upgrades—particularly when they still are paying off legacy analog systems—Grotzinger believes two factors now are driving vendors to something about it.
“We’re running up against some FCC-mandated deadlines regarding spectrum efficiency,” he said. “I have to say that without the government mandate to do it, we’d probably still be churning out FM radios and working on the next generation of analog product.”
The other driver is that the costs to develop digital radios are coming down. “When it was bleeding-edge technology, it also was horrendously expensive and only available in the highest-tier products,” Grotzinger said. “But now we can affordably address this.”