Phone Makers Getting DECTed Out For The Holidays

New York — The hot new cordless phone technology filtering onto retail shelves in the fourth quarter is actually quite long in the tooth, yet despite its advanced age, DECT phones will be marketed as a premium product by many cordless phone manufacturers.

DECT, for Digital Enhanced Cordless Technology, operates on the 1.9GHz frequency and was approved for use in the U.S. by the FCC in 2005. The technology has been sold overseas for years but as it enters the United States market, it will be trumpeted as the successor to 2.4GHz and 5.8GHz under the moniker "DECT 6.0."

"Up until last year there was very little interest" in the technology, said Richard Tosi, president, Uniden. "Then with the launch of DECT 6.0, we've seen a lot of interest from our retailers."

There is a tension in how to market DECT in the U.S., said Matt Ramage, marketing VP, VTech. Since the technology is mature, it's less expensive to develop so it can conceivably hit aggressive price points, but the "6.0" designation and the need to stem the category's price erosion have convinced vendors to aim high.

"We see it as the step up from 5.8GHz," Tosi said. Thomson, which has started shipping DECT-based phones to Wal-Mart, is also eying a step-up customer for the technology's U.S. launch, said Doug Delor, Thomson's Americas marketing communications director.

VTech will leverage the technology to offer very stylized phones in 2007, Ramage said.

As far as the technology goes, DECT does offer some real benefits over its other digital competitors, vendors say, chief among them is the lack of interference. All DECT products proclaim to be "interference free" since its 1.9GHz frequency is devoted solely to DECT products, unlike the increasingly cluttered 2.4GHz band that's shared by microwaves, baby monitors and wireless home networks.

"DECT is fundamentally better technology because the frequency is dedicated solely to other DECT products; that's a huge deal," Delor said.

The technology also allows for the transmission of both voice and data, said Jordan Riggs, Thomson product manager. Indeed most DECT phones on the market today are so-called dual phones that combine a PC VoIP technology like Skype with landline telephony.

In terms of battery life and range, DECT stacks up comparable to the other digital technologies, Ramage said. However, since DECT supports adding multiple base stations to a single line, users can expand the total number of handsets they use in their homes with additional base units. Uniden's recently introduced DECT phones can support up to four base units with a total of 24 handsets between them — though the handsets can not "trade off" between base stations like a cellphone between towers.

The DECT Forum, the Switzerland-based industry association supporting the frequency, estimates that over 600,000 DECT products will be shipped in the U.S. this year. In 2007, the group expects shipments to climb to 2.3 million and reach 6.8 million in 2009.

Like 5.8GHz before it, DECT won't ride to the rescue of the cordless category, vendors admit. "We don't think DECT will change the market, it will cannibalize it," Ramage said.

For the year, the overall cordless market will likely drop in units and dollars, said Ross Rubin, NPD industry analysis director. The culprit, he said, is cellphone users who ditch their landlines. "Cellphone users have really hurt the replacement cycle."

Yet there are silver linings in the category's clouds, Rubin observed. In addition to the promise of DECT, VoIP and fixed mobile convergence products could provide a needed boost.