Motorola and Cisco have cancelled a planned dual-mode cellular and Wi-Fi phone, because it could not keep up with products in the market.

Last July, the companies announced plans to develop a device and release it in early 2006. The aim of the project was to let enterprise employees use one phone both outside and inside the office, with calls smoothly shifting over to a wireless LAN in the office and to the cell network when a user went outside. Typical office phone features, such as dialing by extension within the enterprise, would be built in.

Dual-mode phones are a key component of fixed-mobile convergence, which should give companies lower cellular bills and better indoor coverage. If indoor calls can migrate to cheaper fixed networks, mobile operators stand to lose airtime, or else revenue from cellular calls as they cut prices. But the convergence puts mobile and fixed operators in more direct competition to provide a single solution for indoors and outdoors.

The Motorola-Cisco partnership remains but the product , which never had a formal name, has been canned, according to John DeFeo, Motorola corporate vice president of enterprise products.

"It just simply took too long to get it moving," DeFeo said. "The market is moving very fast." Among other things, the industrial design of the device and the wireless LAN radio to be used in it were too old to make for an appealing product, he said. The development process involved coordinating product road maps between the two companies and working with mobile operators and other partners that would offer the phones, DeFeo said.

The planned device was intended as a successor to the CN620, a phone jointly developed by Motorola, Symbol and Avaya that was never produced in commercial volumes, DeFeo said. Unlike the CN620, it would have been fully interoperable with Cisco's CallManager IP PBX (private branch exchange) and wireless LAN gear.

Motorola's new approach will be to develop a single platform that can be used for any dual-mode device the company wants to make and will work with IP PBXes from all vendors, DeFeo said. He would not say when the first products based on that platform would be available. Motorola wants to branch out to many devices in order to support the same type of roaming capability for applications such as instant messaging, push-to-talk and location-based services, he said.

Meanwhile, Motorola has introduced other dual-mode phones that offer fixed-mobile convergence using other technological approaches, such as UMA (unlicensed mobile access), DeFeo said.

Cisco representatives were not immediately available for comment.