New Horizons spokesperson Steve Romeo told Wireless NewsFactor that the phone differs significantly from other disposables in that it can both make and receive calls.

"Ours is more like a real phone; it is a very simple device, but users can receive calls by having a local phone number," he said.

Environmentally Friendly

Romeo also pointed out that the Cyclone is recyclable -- making it attractive to the environmentally-conscious -- and rechargeable. Those who purchase the US$39.95 phone get 60 minutes of nationwide airtime. They can either buy more airtime or return the phone to the company or carrier for recycling and receive a $5 rebate.

"We are encouraging people to recycle the phones, although they are priced so that they are disposable," Romeo said.

The phones initially will be offered through wireless services resellers nationwide, Romeo said, and New Horizons plans to make them more widely available on store shelves with direct-to-retail marketing starting in March or April. They have been under development by the Orlando, Florida, firm for about three years, he said.

Travel Accessory

"This phone goes beyond providing safety and security features. There are millions of people who want a cell phone but have never owned one because they are too expensive," Romeo said. With Cyclone, New Horizons is targeting vacationers, business travelers and young phone users, he said.

In fact, the company will offer a "travel fun kit" featuring both a phone and disposable camera for the tourist set.

There are no roaming or long distance charges with the Cyclone, and additional airtime cards can be purchased at participating retailers, the company said. New Horizons said it has lined up airtime agreements with as yet unnamed operators and resellers looking for low-cost cell phone service alternatives.

The company will shift its focus to the mass retail market once these agreements have been reached, putting the Cyclone in gas stations, convenience store chains, and grocery and drug stores.

"We created this telephone to fill the void created by the more than 70 percent of Americans that cannot meet the financial requirements for traditional, post-paid and prepaid cell phone programs," said Karen Wilson, founder and CEO of New Horizons.

"The Cyclone phone fills this void and opens new doors for the sales and marketing of cellular products."

Competition in Emerging Market

New Horizons faces competition from Telespree Communications, which last spring said it would begin offering an over-the-counter prepaid disposable wireless phone.

The one-touch, voice-driven handsets use a combined prepaid airtime and power pack and will be available for about $30 at convenience stores, grocery stores, drug stores and gas stations, according to San Francisco, California-based Telespree.

Analysts contend there may well be a market for disposable cell phones as long as they can be offered at a cheap price, are widely available at retail outlets, and allow carriers a piece of the action.