DECT Phones Get Off To Strong Start

By Greg Scoblete -- TWICE, 6/4/2007

NEW YORK — DECT based cordless phones have surged out of the gate, selling over a million units since their introduction in 2006 and poised for a much larger share of the cordless market in 2007.

Sales of DECT-based models will likely prop up declining average selling prices (ASPs) in the category but won't offset unit volume declines, manufacturers say.

The DECT launch has been the most successful technology introduction in the cordless category in five years, exceeding the early returns from 5.8GHz digital, said Tom Bratton, sales and marketing VP, Thomson. It took 5.8GHz digital six quarters to reach the sales volume that DECT has achieved in three, he added.

"We've been thrilled with launch," said Richard Tosi, president, Uniden. His company will expand its number of DECT models from two lines to between eight and 10 new models in the mid-summer or fall time frame. The company will continue to position it as a premium product, priced above 5.8GHz digital phones.

Tosi credited the success of DECT to its interference free pitch, which is attractive to the growing number of homes with wireless networks.

Thomson will also add four to six new DECT models to its lineup this year, Bratton said.

One of the reasons DECT has had such a successful U.S. launch is the fact that DECT is old news for most of the world. The overwhelming majority of phones made in the world are based on DECT. "There are economies of scale that you get using DECT that you don't get with other technologies," said Adam Somer, co-president, American Telecom Services. His company transitioned entirely to DECT technology for 2007.

For its part, Thomson committed early to DECT and has thrown a considerable amount of marketing muscle behind its launch, Bratton said. "We wanted to make an explosion with it, not just dribble in."

While strong, DECT is also accelerating the extinction of its rival digital technologies — 2.4GHz and 5.8GHz digital. In short order, manufacturers expect there to be a two horse race between DECT at the high end and 5.8GHz analog at the low.

"DECT is definitely putting the hurt on 2.4GHz and 5.8GHz digital," said Brad Pittmon, VTech product manager. "That's going to create a unique situation in 2008 in the category with just two main platforms."