Microsoft, Ericsson Form Dynamic Wireless Duo

Microsoft Corp. and Ericsson Wednesday formed one of the most formidable wireless partnerships yet.

The industry powerhouse and Swedish telco equipment maker will partner to develop and market wireless Internet products that are intended to work from any device. A joint venture between the two companies, with Ericsson (ERICY) as the majority stakeholder, will deliver mobile e-mail solutions for network operators.

Ericsson will bring its Wireless Application Protocol (WAP) stack to the table and promises to use Microsoft Mobile Explorer, the new browser for wireless devices launched today, on its phones. The new dual-mode MME microbrowser displays both HTML and WAP 1.1-compliant content and allows secure corporate data access, e-mail, Internet and other services from both feature phones and smart phones.

The joint venture will use Microsoft NT server and exchange platforms and Ericsson’s infrastructure as well as its current wireless Net designs.

The new deal, which is the first alliance between the two companies, includes an agreement that the two companies will collaborate on developing open industry standards for such projects as the Universal Plug and Play, Bluetooth, WAP, and overlapping markets such as WAP and XML. Ericsson added that all of its phones will be WAP-compliant by 2001.

Ericsson’s newfound coziness with Microsoft (MSFT) may make its Symbian partners uneasy. Symbian, which developed EPOC as the main rival for Microsoft’s Windows CE operating system for handheld devices, includes UK-based Psion, Motorola (MOT) and Nokia (NOK) as its partners. Each partner has been adamant that it will continue to support the alternative O/S, despite rumors of the lure of a Microsoft deal.

In a statement meant to address concerns about EPOC and the Symbian alliance, Ericsson said that it “fully recognize the need to embrace open standards”, and that the new alliance with Microsoft “does not include joint development or licensing of operating systems.”

“The close cooperation between Ericsson and Microsoft does not influence
Ericsson’s engagement in Symbian or Ericsson’s Epoc-based projects,” says Jan Ahrenbring, Ericsson Mobile Communications’ vice president of marketing and communications. “Epoc is a robust, scaleable operating system and it is thanks to the fact that it is scaleable that we can incorporate other applications in our devices.”

Ericsson said that both it and Microsoft are committing to deliver solutions that meet demand on “timeliness, open standards, robustness and scalability.”

Ericsson’s stock was up 11 percent on the news, while Psion and Nokia both fell.

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