Microsoft will try to grab a share of the booming market for converged voice/data networks, through a joint venture with wireless equipment maker Qualcomm.
The two companies will announce the creation of the new company next Tuesday, in a move seen as a counterstrike to the Symbian wireless voice/data consortium.
Like Symbian, the new venture will look at ways to integrate cellphone and handheld computer technology to offer mobile voice/data services. In the first year its work will be primarily research based, with products likely to appear in 2000.
Symbian is working to integrate mobile phones from its founders - Nokia, Ericsson and Motorola - with palmtop computers from Psion.
While Symbian bases its efforts on Psion's Epoc operating system, Microsoft and Qualcomm will focus on CE, the cut down version of Windows. Key applications will be emerging 'smartphones' that display email and Web pages.
Although the two owners will not release details until Tuesday, analysts speculate that early projects will include making data in Microsoft Office accessible from mobile phones, and developing a smartphone that incorporates CE and MS' new 'microbrowser'.
Some observers fear that this deal gives Microsoft a foothold to try to set standards in the cellphone world, as it does in PCs and is trying to do in WebTV. "Symbian was an anti-Microsoft move to stop it getting power in the mobile phone and convergence world. But Qualcomm is giving it a foot in the door," said an analyst at the Yankee Group in Boston. "Symbian left Qualcomm without a cellphone partner."
The new partnership could spell the end of Qualcomm's deal with 3Com, whose Palmpilot is the dominant player in the handheld PC market, running its own alternative to CE and Epoc, the Palm OS.
Its strength will make 3Com a potential key player in the alliances emerging around smartphones, but it may have to look for an alternative partner to Qualcomm, although their joint product, a combined digital phone and Palm personal digital assistant, is due to ship in the first half of next year.
Separately, Qualcomm announced that its net income jumped by 33 per cent in the third quarter to $39.9 million or 54 cents per share, topping analyst estimates of 50 cents. Revenue rose 54 per cent to $926 million.
Earnings would have been higher, about 66 cents per share, without losses associated with Qualcomm's spin-off of its Leap Wireless holdings.
The company pointed to growing global acceptance of the CDMA wireless standard as a key factor in its healthy results, especially as its CDMA products have higher margins than its older portfolio.
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