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The Cutting Edge

Headsets Gaining a Firm Earhold

Sales of hands-free devices for cell-phone users are on the rise because of convenience and concerns over safety.

May 11, 2000|LISA LEVENSON | BLOOMBERG NEWS

Rick Stamberger thinks his is the most useful gadget he's bought in the last year, surpassing a Palm Inc. organizer and a two-way pager from Research in Motion Ltd.

Christine Davies calls hers "the Madonna," because it resembles the microphone the Material Girl hangs from her ear during concerts so she's free to dance while singing.

Even a model for designer Tommy Hilfiger sports one as she gazes from a balcony in one of his recent advertisements.

What the three have in common is they're using headsets, ear buds and other hands-free devices that let them gab on their cellular telephones while otherwise keeping their hands occupied. And as some people grow fearful that hand-held mobile phones can cause cancer and communities crack down on the use of such phones by drivers, the devices may be poised to gain more devotees.

"The market is coming toward us," said Ken Kannappan, chief executive officer of Santa Cruz-based Plantronics Inc., which he said dominates the $600-million segment of the headset market in which it competes.

Companies like Plantronics and closely held Jabra Corp. are counting on fans like Stamberger, chief executive of Internet start-up SmartBrief.com Inc., and Davies, a spokeswoman for wireless carrier Triton PCS Holdings Inc., to boost sales.

Stamberger, whose company provides news and information for specific market segments via e-mail, said that when he first started using an ear bud last summer, people either thought he was crazy or with the Secret Service. "Now it's pretty standard to see people walking down the street talking to themselves," he said.

Headsets and ear buds are third on the list of most-purchased cell-phone accessories, behind cigarette-lighter adapters and cases, Davies said.

Ear buds and headsets allow wearers to keep their cell phones strapped on a belt or tucked in a purse. The ear buds and headsets connect to the phones with an L-shaped jack and a thin, black wire like those used with personal stereos and compact-disc players. Some ear buds act as both receiver and transmitter; others have a microphone on the wire.

Today's smaller cell phones are "very, very convenient, but you can't do the same thing you can with an office phone, where you shift it over your shoulder and hold it in place," said Larry Meltzer, a spokesman for SBC Communications Inc., which is combining its U.S. wireless operations with those of BellSouth Corp.

A March study by Plantronics and Strategy Analytics Inc. revealed that 44% of wireless-phone users are interested in headsets, and 63% of those people based their interest on safety concerns, said Lisa Ihde, manager of wireless education programs at the Cellular Telecommunications Industry Assn.

Plantronics said it introduced more than 20 new headset models in the last fiscal year, including one type that's available in iridescent color to match Nokia Corp.'s 6100 series phones. Prices range from $19.95 to $49.95.

The company, which has a market value of about $1.4 billion, said sales rose 10% to $315 million in the fiscal year ended March 31, while net income climbed 19% to $64.5 million. Its shares have risen an average of 36.7% during the last five years.

Jabra, based in San Diego, is producing 24 times more EarSets each month than it did at this time last year, said Raleigh Wilson, senior vice president of sales and marketing. The company said sales will be up tenfold in 2000 from their level in 1998. Jabra's products sell for $39.95 and $49.95.

Helping increase interest are promotions run by wireless carriers. During Wireless Safety Week, May 22 to 28, Sprint Corp.'s PCS Group and Samsung Corp. will make ear buds available over the Sprint PCS Web site to existing customers with selected phones, said Ashley Pindell, a Sprint PCS spokeswoman.

From May 19 to June 4, new Sprint PCS customers who buy certain phones from Samsung, Motorola Inc., Sanyo Electric Co. Ltd. and others and choose a service plan for $29.99 or more each month will get a free ear bud, she said.

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