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Microsoft Corp.

Microsoft and Ericsson's Mobile Phone Software Deal Alarms Psion Shareholders

Strategic Insights

— 1 min read

The surprise deal between Ericsson and Microsoft has sent Psion's shares plummeting, from £30.05 to £17.50 before rebounding to £26.38. The agreement between the two technology giants will see them collaborate on software that enables email reception on mobile phones. This move is seen as a threat to Psion's dominance in the mobile phone software market, as it had previously relied on Ericsson as a key ally through its joint venture, Symbian.

Key Takeaways:

  • Microsoft's Windows CE operating system has struggled to gain traction in the mobile phone market, with Symbian's EPOC software enjoying more success.
  • Ericsson and Microsoft's collaboration on mobile phone software may pose a threat to Psion's Symbian joint venture, which currently dominates the fledgling market.
  • Klaus Esser, Mannesmann's chairman, has rejected Vodafone AirTouch's advances, despite the company's shares dropping due to the deal.
  • The mobile phone market is rapidly expanding, with the market for mobile phone software set to explode over the next few years as mobile phones become Internet-accessible.
  • Microsoft's president, Steve Ballmer, has shown his intention to make a significant impact on the mobile phone market by partnering with Ericsson.
  • Symbian's lead in the mobile phone software market may make it difficult for Microsoft to catch up, with estimates suggesting that several players may be able to coexist in the market.

Statistics:

  • Psion's shares dropped from £30.05 to £17.50 before rebounding to £26.38.
  • The mobile phone market is expected to reach a stage where only a handful of large global players can survive.
  • Symbian has a lead in the mobile phone software market, making it a challenging player to compete with.
  • Mister Ballmer's plan for Windows CE is to install it in everything from television set-top boxes to mobile phones.
  • Ericsson and Microsoft will work together on software to allow email reception on mobile phones.

Sources:

  • The Times, "Microsoft joins forces with Ericsson in blow to Psion", 1999
  • The Times, "Mannesmann's chairman Klaus Esser rejects Vodafone offer", 1999

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