SpectraLink Calls On Wi-Fi Phones To Fuel Growth In Coming Years.(THE IBD 100)

Byline: JONAH KERI

All things being equal, many consumers opt for cordless phones over fixed phones in their homes. If you can pay equal price for both, why not gain the convenience of taking the phone with you to do the dishes or take out the trash?

Some businesses have seized on the same concept. In high-traffic settings, workers can benefit greatly from talking on the run. Such go-go enterprises -- from nurses flitting through hospital wards to technicians buzzing through manufacturing plants -- are the biggest fans of SpectraLink's rugged phones.

Unlike the choice of phones for home use, though, wireless local area network phones still cost considerably more than nonportable alternatives. Advancing technology is closing that cost gap.

"As enterprises are deploying wireless LAN, you can amortize the cost (of SpectraLink phones) across many applications, not just voice," said John Elms, SpectraLink's CEO. "Then as costs come down and wireless LAN becomes more ubiquitous, we want to be in position to become the business wireless phone."

The company splits its business into two segments. Its Link phones offer voice services, and work off a 900 mhz platform. Businesses that have been in the same building for a few years tend to favor the Link. The NetLink system works off local area networks, and transmits voice and data to multiple mobile devices, including phones, laptops and PDAs. Businesses moving into new buildings, as well as enterprises rewiring their facilities, tend to favor the NetLink wireless fidelity, or Wi-Fi, system.

At the end of the third quarter, SpectraLink derived 71% of its revenue from 900 mhz systems, 29% from Wi-Fi based products. In its fourth-quarter earnings report, announced Wednesday, the firm said the split is now 58% 900 mhz Link, 42% voice-over-Wi-Fi NetLink. Elms said NetLink and Link should hit the 50-50 mark by the middle of this year.