ON Topic Off Topic i am not sure but it is interestingWRAPUP-Ericsson, Microsoft join to take Web mobile
(Adds fresh analysis, combines reports from all centres)
By Belinda Goldsmith
STOCKHOLM, Dec 8 (Reuters) - Microsoft (NasdaqNM:MSFT - news) and Sweden's Ericsson on Wednesday joined forces to offer web browsers and e-mail over mobile phones, in a deal promising to free the Internet from wires and put it in your pocket.
The ground-breaking agreement drove shares in both companies higher and initially shook their competitors as investors assessed the combination of the world's most powerful software house joining with the third-largest mobile phone manufacturer.
``This is going to have a long-term impact on the whole wireless industry,' said Ilkka Rauvola, analyst at Paribas. ``Ericsson has handsets, Microsoft...has been looking for a way to enter the wireless industry.'
Ericsson closed in Sweden 12 percent higher at 549 crowns, Microsoft traded up a dollar mid-morning in New York at $94.
The initial jolt on Finnish mobile phone rival Nokia was deep, the stock falling as much as six percent. And Britain's Psion (quote from Yahoo! UK & Ireland: PON.L) sank 40 percent before both staged a spectacular recovery as traders decided there was room for all four in the exploding market for mobile Internet devices.
Nokia closed up 3.35 euros at 170.55 while Psion ended the rollercoaster day down just 4.34 percent at 24.89 pounds. U.S. mobile comms major Motorola (NYSE:MOT - news) hit a 52-week high at $136.
EVERYONE WINS
Analysts said the Ericsson deal was a plus for the whole wireless industry and a strategic win for Microsoft, which has lagged the market in developing software for mobile Internet access devices, struggling with its Windows CE operating system.
That was left outside of the Ericsson deal.
``Microsoft cannot impose its standards on the mobile phone industry because the mobile phone industry is not interested in its operating system,' said Keith Woolcock, IT analyst at Nomura in London. ``So Microsoft can either walk away or address a mobile phone industry that will be roughly three times the size of the personal computer industry.'
Microsoft said the deal was far from exclusive.
``I really think you're going to see it's going to be one of many you're going to see in coming months,' Phil Holden, group product manager for Microsoft's productivity applications division, told Reuters in a telephone interview.
The deal could not have come at a more explosive time for the European mobile phone industry, whose stocks have spiralled over the past year, building on global leadership in wireless technology because of Europe's GSM standard.
THE WEB IN YOUR POCKET
Combining that leadership, the ubiquity of mobile phones and Microsoft's computer industry strength lit the fuse.
Mobile phones globally already outnumber personal computers and are forecast by some to hit one billion units in a couple of years, driving a mass e-commerce market -- brokerage Durlacher sees the market for mobile e-commerce worth 23 billion euros by 2003, from 300 million in 1998.
Markets initially saw the deal as a key salvo in a battle for dominance in mobile operating systems, but Ericsson said it would not affect its commitment to the Symbian venture which builds around British palmtop computer group Psion's EPOC operating system -- a direct rival to Microsoft's Windows CE.
``EPOC is a robust, scaleable operating system and it is thanks to the fact it is scaleable that we can incorporate other applications in our devices,' said Jan Ahrenbring, vice president of marketing at Ericsson's mobile communications unit.
Psion is the largest shareholder in Symbian which partners Motorola of the United States, Ericsson, Nokia and Japan's Matsushita Communication Industrial Co .
``It's bullish for Psion,' said Nomura's Woolcock. ``This will help promote Symbian and help validate the whole concept of mobile Internet.'
MICROSOFT JOINS THE GAME
News of the deal came as Microsoft unveiled its Mobile Explorer Internet browser, including one version specifically for the Windows CE operating system, and one to work on any operating system.
Ahrenbring said Ericsson expected new products from the joint company, to be majority owned by Ericsson with about 100 staff, would have a positive impact on earnings in one to three years, mainly by boosting traffic on the mobile phone network.
Mobile phones are simpler than personal computers, so the role of the operating system that steers them could be less crucial than the browser itself which will have to offer simple, clear, easy, even one-handed use.
Ericsson said the new company will market and deliver mobile e-mail solutions for network operators, giving users access to information, personal files and e-mail from any wireless device.
Ericsson will provide its technology -- Wireless Application Protocol (WAP) -- that shrinks the Internet for mobile phones while Microsoft will adapt Microsoft Mobile Explorer browser.
(Additional reporting by Sara Ledwith and Kirstin Ridley in London)
(Stockholm newsroom, +46-8-700 1003, fax +46-8-211601, stockholm.newsroom@reuters.com)) |
