Sizzling new cell-phone games, burning-fast video transmissions, and hotly sought-after messaging services have touched off an explosion in global cell-phone manufacturing, giving Agilent Technologies Inc.s Liberty Lake research-and-development operation a much-needed boost.
Mobile-phone makers shipped a record 516 million units in 2003dwarfing their previous high of 435 million units in 2000and now project that their production this year will jump by another 13 percent.
Theres major life back into the wireless industry, Al Schmidt, site manager and vice president of Agilents Liberty Lake-based wireless division, says with a smile.
The cell-phone surge is great news for Agilent, which develops here complicated testing equipment, called test sets, that cell-phone makers use to test 70 percent of the wireless phones produced in the world.
Meanwhile, cell-phone application developersthe dudes who come up with the cool new games, video functions, and servicesare providing a burgeoning market for test sets as they determine whether their latest offerings will work on the worlds cell-phone networks.
Agilents engineering staff here constantly upgrades the companys test setswhich sell for $60,000 to $85,000 a popso the suitcase-sized boxes can keep up with the powerful new cell phones and data-hungry applications that drive the market.
As cell phones become camera phones become video phones become gaming phones, we have to upgrade our product, says Schmidt.
Rick Cox, product development manager at Agilent, says the software the test sets use is essentially obsolete if we dont make a major change every six months.
Agilent, a publicly traded Palo Alto, Calif.-based company with facilities in more than 30 countries, doesnt release sales by location, although Liz Cox, Agilents spokeswoman here and Rick Coxs wife, acknowledges that we have an uptick in wireless business.
Schmidt says the cell-phone industrys resurgence has helped Agilents Liberty Lake operation, which is located at 24001 E. Mission, stabilize its employment after big cutbacks.
The facility, which once housed manufacturing of printed circuit assemblies, first under Hewlett-Packard Co. and then under Agilent after it was spun off from H-P, employed 1,200 people as recently as August 2001, but now has just 400 employees.
Im just comfortable weve stabilized, Schmidt says. I think well be doing some hiring for attrition now. A year ago, I wouldnt have said that.
Agilent manufactured its last printed circuit assembly here Oct. 31. While it still makes prototypes of its test sets here, and also tests those prototypes to see how well they hold up to variations in humidity, temperature, pressure, and vibration, it manufactures the production models at South Queensferry, Scotland, outside Edinburgh. Currently, Schmidt has responsibility for the manufacturing of those units, although he will relinquish that task soon.
Recently, Agilent sold to Huntwood Industries Inc., the big Spokane cabinetmaker, a large tract of property next door, at the southeast corner of Appleway Avenue and Molter Road, where Huntwood has broken ground on a 490,000-square-foot manufacturing plant.
Still, Schmidt says, Were going to keep enough property here so that we can expand. He doesnt think that would happen for a period of years, however, and says Agilent also has no current plans to add to its staff.
On markets leading edge
Yet, an air of excitement permeates Agilents cavernous facility now, because, Schmidt says, Weve got to lead the market.
That a test-product developer would serve as the knife edge of a major technology market might be difficult to grasp, but Liz Cox says test equipment plays an unusually important role in the development of cell phones and cell-phone applications.
The capability of testing these devices in development allows them to be developed, she says. If youre a designer, you cant make these devices until you have the testing tools.
For cell-phone makers, Agilents test sets help achieve goals that are as old as the manufacturing industry: namely, producing more products, and doing that better, faster, and at less cost.
Its a matter of economies of scalevast scalebecause many cell-phone plants are enormous. Rick Cox recalls that as he walked around a catwalk in one plant, he could barely see the other end of the building. In a plant that big, any change that can speed up production can cut costs dramatically, Cox says.
Seconds count, so if you can test something in nine seconds rather than 12, thats good, he says.
Says Schmidt, Weve been places where weve been able to keep people from building a new building. For a manufacturer that pumps out 30 million to 40 million cell phones a year, holding down floor-space, worker, and shift needs can produce huge savings. The ability to help a manufacturer achieve such goals can sell a lot of test sets, Schmidt says.
Such unrelenting competitive pressures in its customer base also can cause things to happen fast at Agilent.
Well get a call from someone who will say, We want 250 of those boxes in 30 days if they can test X, Schmidt says. He says when that happens, Rick Cox and the rest of Agilents product-development team spring into action, working against tight deadlines to win business.
Providing customer support also can be a daunting task. Manufacturers who face such massive production issues have a common need to have their suppliers deal with problems yesterdayand because of that, Agilents engineers keep their passports current.
I have someone in Korea who has been there for a week and half; two weeks ago, he didnt know he was going to be in Korea, Schmidt says.
Its not as if the cell-phone plants are nearby. In addition to Korea, theyre located in Japan, Malaysia, China, Taiwan, Mexico, Brazil, Eastern Europe, and Finland. Schmidt himself recently circled the globe while making calls, traveling a total of 10 days and flying for more than 20 hours a day three separate times during his trip.
Agilents test sets confirm how well components are receiving or transmitting data at different speeds and frequencies, as well as how theyll work as the network signal grows weakerin effect as a device is used farther away from a cell tower.
Game and application developers use the test sets to emulate cell-phone networks, enabling them to see how well their products work with various networks. They also point out pitfalls. For example, one application developer who was testing a new cell-phone bowling game found to his horror that the bowling ball in the game was floating through the air instead of rolling down the alley.
Data-handling speed is important. While cell-phone videos initially took 10 minutes to load before they would play, now theyre ready to view much more quickly thanks to increased data-handling speed.
Cell-phone gaming has provided Agilent with new markets, because while the cell-phone manufacturing industry has consolidated, the number of application makers has shot up with the blossoming of games, services, and video and photo products.
Still, some of the Liberty Lake facilitys most intense relationships are with its development partners, who are among the worlds biggest cell-phone makers, although for proprietary reasons Agilent cant say who those partners are.
Agilents work with those partners is closely guarded, and industrial security regarding a cell-phones exterior design also is important. Liz Cox says that cell-phone makers have sent Agilent prototype phones with the internal guts, or electronics, in place, but with the faceplates removed. Says Rick Cox, Weve gotten phones literally in black boxes that we cant open. Portals punched through the walls of the sealed boxes enable Agilent to connect the phones to test sets.
Youthful customer base
To understand the light-speed market changes that challenge cell-phone makers, application developers, and Agilent, it helps to look at who covets cell technology.
A hint: a lot of these people arent very old.
A high school student Schmidt knows of rang up 17,000 messages in one monthat 5 cents a message, for a total bill of $850via a short-messaging service he had on his cell phone. Mom and Dad intervened when the bill arrived.
Also, a lot of these people arent Americans.
In Europe, soccer-mad fans subscribe to services that send to their cell phones video clips of plays when goals are scored in matches, while in Japan network television news programs run live video of news events transmitted by people on the street with their cell phones. Words streaming across the television screen say, If you have a video phone and you see news, send it here.
Liz Cox says that early adopters of cell technology in Korea, China, and Japan cant wait to get their hands on the latest gear and games. Gaming is really big in Asia, as well as some interactive things, like gambling, she says.
Unfortunately, Cox says, The people who are really drawn to the new technology are in their late teens or early 20s. Thats the perennial difficulty on thisthe new stuff costs money, and young people dont have a lot of it.
Even those who covet new technology usually dont want to buy it until they can see what it will do, and sometimes the cell-phone industry will salt the market by doing things such as deploying actors outside busy terminals on Londons famed underground, she says. The actors will be doing something cool on their cell phones, and theyre dressed great, and theyre handsome people, Cox says.
Something far more exciting to Agilents engineers, though, is the advent of an entire new generation of cell-phone technologythat should create demand for new cell products and services. The technology is called 3G, or third generation, which Cox describes as the long-awaited merger of voice and data in broadband at screaming speeds.
Verizon Wireless, the Bedminster, N.J.-based communications giant, said Jan. 8 that it will begin expanding its BroadbandAccess 3G network nationally immediately after deploying it in Washington, D.C., and San Diego in October. Liz Cox says thats the first major 3G rollout that shes aware of.
Even though 3G is in an embryonic stage, already the wireless industry is forming standards committees to talk about what fourth-generation wireless technology will be.
Thats great for us, because such work will push future technological development, Schmidt says.
While Agilents Liberty Lake unit is much smaller today than it once was, at least the 400 employees Agilent still has are all engineers, managers, and professional support people, says Rick Cox, whos been at the facility since 1982.
Many are Ph.D.- or masters-level graduates of engineering schools at such universities as MIT, Stanford, Purdue, Washington State, the University of Idaho, Gonzaga, and Montana State, Liz Cox says, adding, Theyre pretty-well compensated. Unlike when the facility manufactured the printed circuit assemblies, Agilent doesnt employ laborers now.
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