San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
Cordless phones are evolving. Not content to play Neanderthals wiped out by the Cro-Magnons of emerging technology, cordless makers are adapting and co-opting cellular and IP telephony, creating a series of hybrid products to stem the cordless market's decline.
As a result, multiple cordless suppliers here at CES will introduce the industry's first cordless systems that enable users to send and receive cellphone calls through the cordless handsets. Suppliers will also integrate new features into their cordless phones, including control of home security systems and built-in security cameras (see p. 12 for more details.).
The cordless decline was quantified by NPD Intelect's retail sell-through figures (excluding Wal-Mart) for the 12 months ending September 2004. They showed unit sales dropped 15 percent to 17 million, while dollars slid approximately 13 percent from $822 million to $710 million.
“The residential phone market is challenged,” admitted Lisa Castor, VP of North American operations for Atlinks/Thomson.
Cordless manufacturers are buoyed, however, by the rapid adoption of pricier 5.8GHz models, the potential co-option of cellular, and the promise of VoIP.
While few vendors see “cord cutting” – consumers ditching landline service completely in favor of a cellphone — as an acute long-term threat, it did affect the back-to-school selling season, said Wayne Borg, Panasonic's marketing manager. “When a kid goes away to college, they used to need a phone for the dorm, now they use their cellular phone,” Borg said. “We do find though, that once they move out of the house and get an apartment or buy their own home, they get a landline.”
The consumer embrace of cellular led cordless vendors to import features — such as photo caller ID and downloadable ringers — to keep the product current, said Uniden CEO Al Silverberg. “It has definitely affected the way we design our products.”
Rather than simply mimicking cellular styles or technologies, however, a number of manufacturers — Uniden, Panasonic, Motorola, and Thomson — plan to introduce cellular-to-landline docks that blend home telephony with mobile, allowing consumers to send and receive cellular calls using their cordless handset.
While cordless vendors are excited about the potential, they are daunted by the prospect of creating an elegant solution in which hundreds of cellphone models with proprietary connectors will seamlessly integrate into a cordless system. Some suppliers, such as Uniden and VTech in Canada, have skipped the cables and gone straight to Bluetooth. Others, including Thomson, tried to cast as large a net (25 percent of existing cellphones) as they believed the market would allow.
“The mechanics of cellular docking are tough,” said VTech marketing VP Donna Silbert.
If the overall cordless picture is a “mixed bag,” then the success of 5.8GHz and multi-handset bundles are definitely bright spots, Silbert added. “The technology is being adopted at a faster rate than 2.4GHz was.”
Another potential boon is the rapid growth of VoIP in the retail market. All of the aforementioned suppliers will offer a multihandset cordless system with a built-in terminal adapter that plugs into a cable modem to allow VoIP calling to all the accessory handsets.
“We think a cordless works better with a VoIP service because we can get their features embedded into our products,” like caller ID and voice mail, Silbert said.
Like integrating cellular, VoIP is not without its own burdens: there is no single connectivity standard, so equipment must be pre-programmed to access a specific VoIP network. By mid-December, only VTech had committed to partnerships — with AT&T and Vonage — while other vendors were evaluating how, and with whom, to launch their own VoIP products.