Ericsson, Microsoft joint venture causes stir

This week's news that Microsoft and Ericsson have formed a joint venture to develop and market wireless Internet software and products sent shock waves through the business and technology communities.

Following the announcement of the deal Ericsson was forced to release a separate statement saying it remains committed to Symbian. Symbian is the partnership between Psion, Nokia, Motorola and Matsushita Electrical Industrial founded to promote Psion's EPOC operating system for wireless information devices.

Stock in the London-based Psion took a hit on Wednesday, at one point losing as much as 40 percent of its value on the London stock exchange before Ericsson released the statement. By Thursday, Psion closed at 2585 pence ($US42.05) per share, a 14 percent drop from the 3005.5 pence per share at which Psion opened the day on Wednesday.

The effect on Symbian could not be gauged by market activity as it is not publicly listed. Officially at least, Symbian said it isn't worried since the Microsoft/Ericsson joint venture is about the operating system and wireless e-mail software, not Windows CE competing with Symbian's EPOC operating system.

"The joint venture is focused on linking through to MS (Microsoft) servers. We don't have any activities on the server at all and are strictly focused on client devices. MS has had very little success in the wireless OS space and they are probably trying to pursue new strategy," Paul Cockerton, head of corporate communications at Symbian, said.

A Motorola spokeswoman at the company's headquarters in Schaumburg, Illinois, said there was no indication that the joint venture spelled trouble for Symbian.

"We are pleased that Ericsson and Microsoft reiterated their support for standards such as WAP, Bluetooth and Symbian," said Jennifer Weyrauch. "Since Microsoft and Ericsson are members of the WAP forum we assume they will bring (proposed mobile devices) to the WAP forum to discuss how Microsoft Mobile Explorer will become consistent with future WAP microbrowser standards."

Analysts were also busy speculating about the effects of the Microsoft/Ericsson deal. "Combined with Bluetooth, Symbian is an equal competitor with Microsoft," said Tim Sheedy, International Data Corp. (IDC) analyst for wireless and mobile.

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