Geoworks To Provide Ericsson With SystemSource: Ed Ballot
DJ 1/23/96 3:08 AM
From The Wall Street Journal
ALAMEDA, Calif. -- Geoworks today will announce an agreement to provide the operating system for next-generation "smart phones" for Swedish telecommunications giant AB LM Ericsson. Geoworks already provides the operating system for smart phones from Nokia Oy of Finland, which along with Motorola Inc. is expected to dominate the market for the advanced digital cellular phones. Geoworks said its average royalty in such a licensing agreement is $12 a unit. Smart phones supplement voice communications with features like faxing, Internet connections, and electronic mail. The phones are expected to appear first in Europe, which unlike the U.S. has a single digital telephone communications standard. Ericsson expects to introduce its smart phone in early 1997, and Nokia's version may be out even before that. At first glance, it is a relatively small market, as telephone handsets go, but the growth prospects are good. There should be about 60 million digital cell phones shipped by 1998, said Clint McClellan, analyst at Dataquest Inc., up from 12 million last year. "About 15% of those will be high-end smart phones," he said, "but that number will increase dramatically as the price drops." The smart phones are initially expected to cost at least as much at high-end cellular phones, which can cost $1,500 or more. "This gets us beyond the 50% [market share] hump" for advanced digital phones, said Gordon Mayer, president of Geoworks. That exposure is important, he said, to attract third-party software developers to write applications for the phones. Motorola, which makes its own operating systems, isn't about to jump on the Geoworks bandwagon, however. Jim Caile, marketing vice-president in Motorola's cellular subscriber group, said the market will remain too small to be a threat to the U.S. cellular telephone market.(END) DOW JONES NEWS 01-23-96 6:00 AM
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