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After slow start, Motorola banks on Starfish

Starfish's high-profile efforts to promote connected information appliances are off to a slow start, but Motorola has big plans for the company it snapped up a year ago.

Starfish, a maker of software for wireless devices, hasn't yet proven to be as big a catch as Motorola hoped, but hope springs eternal.

A year ago, Motorola snapped up Starfish, the brainchild of the flamboyant Philippe Kahn, as the chip and device maker creeps along toward a vision of a world filled with gadgets that can connect to the Internet without wires. Starfish is known for technology that automatically updates and shares data across a range of devices such as a personal computer, pager, cellphone, or a handheld computer.

Since then, one of Starfish's high-profile efforts to promote connected information appliances has stalled. New technologies have not come out as quickly as expected.

"Nothing that Starfish has done has really set the world on fire," said Alan Reiter, president of Wireless Internet & Mobile Computing, a consultancy.

But while the Starfish acquisition hasn't yet really resulted in a completely "new Motorola" that is cranking out new technologies--as one Motorola executive promised last year--the strategic value of the acquisition is finally looking like it will pay off.

Perhaps a slow burn would be a more apt description of the Motorola-Starfish progress. The company has forged some good partnerships, and a lot of new products from Motorola are in the pipeline, Reiter said. One of the reasons for the delay is that making devices with stringent power and processing requirements is "harder than it looks," he said.

Nevertheless, with Starfish, Motorola seems to be well positioned in the wireless Internet market as a new generation of cellphones--which can send and receive email as well as share data with PCs--become more widely available. Further out, Motorola is teaming up with Kahn in a new venture that will meld multimedia capabilities with cell phones and other gadgets.

Growing interest in wireless Internet
The ability to offer email, stock prices, and weather will be important to a growing number of wireless users in the next few years, said Becky Diercks, director of wireless research for Cahners In-Stat.

"Wireless Internet has always been a market poised to take off," said Diercks, but the infrastructure to offer these services has been slow in coming. Now, with a number of roadblocks such as high-service cost, service availability, and speed being addressed, the market really is poised to grow rapidly. Motorola teamed with Starfish technology could move in rapidly.

Another firm, Strategis Group, thinks that the corporate market will be a huge target, with more than 32 million potential users for higher-cost mobile data services, compared to the estimated 2.8 million workers who currently use such services.

But problems remain. The Rex handheld, made by Franklin, is an example of Starfish technology that hasn't taken off. Starfish provides utilities for the device. Despite the early hype, the Rex line hasn't caught on, and its makers have made ominous statements about its future.

Marketing is the problem, Kahn said.

"The disappointment was of course the poor marketing job that Franklin has done on Rex and Rex Pro," said Kahn in an email interview with CNET News.com. "[Franklin] has been in turmoil for the last 18 months, going through 3 CEOs and numerous re-structurings." News that the company is considering selling the Rex business is a positive, Kahn said, which should lead to better sales of the device.

Motorola is hoping to capitalize on this wireless boom with a growing array of products that are just starting to hit the market. The concept of the Rex has evolved into a new device that clips onto Motorola's ultralight Startac phone, a category of device which Kahn expects will be more popular than phones and that feature integrated contact and email functions. Also, Motorola has introduced a pager that uses Starfish technology.

Starfish is also branching out into other markets. Kahn points out that in the year since the merger, Starfish's TrueSync technology is being used by Internet portals Yahoo and Excite to synchronize data from Web-based calendar and phonebook applications with devices such as pagers and Palm Computing devices.

Additionally, the technology is in the process of being embedded in every Motorola wireless device, which represents more than 35 percent of such devices worldwide, Kahn claims.

Perhaps most important of all, Starfish's technology will be included in devices based around Symbian's operating system. Symbian is the consortium of Motorola, Ericcson, Nokia, and Matsushita, who together manufacture the bulk of all cellphones in use today. The first Symbian devices are just starting to hit the market, and more are on the way for 2000.

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