Weekly Wrap: Dropping More Than a Call
By Carlo Longino, Fri Jun 27 14:45:00 GMT 2003

Sony Ericsson cuts back, Microsoft rebrands its mobile software, and more...


Struggling handset manufacturer Sony Ericsson said this week it would pull out of the North American CDMA market and cut about 500 research and development jobs to focus on the Japanese and GSM/UMTS markets. The joint venture will continue to make CDMA devices for the Japanese market and machine-to-machine modules based on the standard. Separately, Ericsson CEO Carl-Henric Svanberg said the JV will turn a profit in the second half of the year, something that would surprise most market observers, and he added that although Ericsson won't see a return to the heady growth of the 1990s, the telecom industry will provide stable growth for the the company.

Microsoft this week released the latest version of its mobile operating system for PDAs, rebranding it as well as its smartphone OS. Now called "Windows Mobile 2003 for Pocket PC," Microsoft says the new OS was built with three key trends in mind -- wireless, e-mail synchronization, and multimedia. The OS upgrade at this point looks more utilitarian than groundbreaking, as Microsoft is expected to unveil a radical overhaul of the software next year. Keep an eye on this space as the release of Palm OS 6, which is supposed to cater to corporate IT types, nears.

Speaking of Palm, the company this week released its fiscal fourth-quarter and full-year results, narrowing its quarterly loss on better-than-expected revenues. The company lost USD 15.1 million in the quarter, down from USD 27.5 million last year, on revenues of nearly USD 226 million, short of last year but well exceeding analyst expectations. The company said same-quarter sales of devices were up 5 percent over last year, the first increase in six quarters, but consumers' attraction to cheaper, low-end devices held down revenues.

Japan's NTT DoCoMo said this week it would license its i-mode service to Italian carrier Wind, making Italy the sixth European country to feature the service, which has disappointingly only attracted 500,000 subscribers across the continent. DoCoMo and Hutchison 3G also this week released more details of their earlier announced cooperation on 3G services. The two companies said they'd work together on developing handset specs and 3G standards, as well as implement seamless roaming across their networks.

Orange CEO Sol Trujillo this week gave an update on the carrier's strategy, setting agressive financial targets and looking to boost its muscle across Europe. As expected, the company confirmed it was joining an alliance with Telecom Italia Mobile, T-Mobile, and Telefonica Moviles to integrate their networks to better serve roaming customers. Trujillo also said that any Orange national operation that wasn't the first or second-biggest carrier in a country or had less than 20% market share in two years' time would risk being put on the selling block.

But at least those Orange national carriers will have plenty of customers to fight over, says some new Yankee Group research. The research and analysis firm says the number of wireless users worldwide will grow by 49 percent to 1.72 billion by 2007, and total global cellular subscriber revenue surging to $584 billion, putting it on the same level as global crude oil production.

Finally, rumors swirled this week that WLAN chipset leader Intersil would be acquired by Texas Instruments, giving TI a much-needed boost (and instant leadership) in the WLAN market. But the move would also make Intel's big push into WLAN and mobile chips a little more difficult.