Motorola to Build Cell Phones Into Ski Jackets

Tue Jan 4, 6:00 AM ET

Technology - Reuters

By Deborah Cohen

CHICAGO (Reuters) - Motorola Inc. (NYSE:MOT - news) said it will unveil plans this week for a line of outerwear that uses interactive cell phone and portable music technology in snowboarding jackets, in a bid to win over twentysomethings.
Motorola and privately held apparel maker Burton of Burlington, Vermont, will jointly develop jackets, helmets and caps aimed at the snowboarding set, to be released in the latter half of 2005.

The jackets will have a padded casing for a Motorola cell phone and an MP3 music player. They will feature a device on the sleeve that lets the wearer control incoming and outgoing calls, and toggle back and forth to music, sending audio signals to removable speakers in the hood.

Motorola, which has been cultivating a hipper image, had been criticized by analysts for reacting slowly to trends. It suffered during the 2003 holiday season when it had a delayed launch of cell phones with built-in cameras.

The new clothes will use Blue Tooth, a popular technology that allows devices such as headsets and computers to communicate with each other over a short range without wired connections.

"You'll see more things coming down the pike from us where we'll be taking this technology and vetting it with other partners," said Bruce Hawver, who heads Motorola's accessories unit.

Neither Motorola nor Burton would discuss the amount of their investment nor the expected pricing. Burton's jackets typically start at about $200 and can cost up to $700 or $800.

Analysts said the joint venture is not expected to boost overall cell phone sales. Motorola in December lost its No. 2 spot in global handsets to Korea's Samsung Electronics (005930.KS).

"They're trying to connect with the upcoming generation," said Neil Strother, an analyst with In-Stat MDR, a research firm. "Will it lift Motorola to No. 1? I doubt it, but it won't hurt. It could go beyond a fad and be longer-term."

Strother estimates that phones sold as part of apparel-type packages could eventually represent 1 to 3 percent of Motorola's handset shipments.

But he said the deal also affords Motorola an opportunity to cross-promote a partnership it announced in July with Apple Computer Inc. (Nasdaq:AAPL - news), whose iPods have become the MP3 player of choice. Apple is developing a slimmed-down version of its iTunes jukebox software to be installed on some of Motorola's phones.