Microsoft shuts Swedish mobile technology unit

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ComputerWire: IT Industry Intelligence

Microsoft Corp has shut its mobile internet business unit in Sweden in a move widely seen as indicating the software giant now believes it has the core technology it needs in the wireless markets. Michael Nash, deputy chief executive of Microsoft's security business told the Swedish paper Dagens Industri that the decision "is strategic and came because we simply don't need the technology."

The Swedish unit was the result of Microsoft's $130m acquisition in May 1999 of Sendit AB, a Swedish developer of mobile internet application server platforms for GSM mobile phone networks. At the time, Microsoft enthused at the potential of the area, saying the Nordic countries had established themselves as the "wireless Valley" of the world and it recognized the level of technical skills that existed in the region.

"The acquisition of Sendit will take Microsoft one step closer to its vision of providing software and services that deliver information to everyone any time, anywhere and from any device", it said at the time.

Its sudden exit added to the gloom in Sweden over the wireless sector and recalled memories of how an alliance, announced in 1999, between Microsoft and LM Ericsson Telefon AB to create a joint-venture company that would develop applications for mobile devices, fizzled out into a licensing agreement for mobile handsets running a Windows-derived OS.

The 80 staff at the Swedish unit will be offered jobs at other Microsoft operations and, having integrated Sendit's technology into its products, Microsoft clearly reckons that the Nordic countries no longer provide a pool of unique expertise.

With delays in the rollout of 3G technology, and a modest take-up of data services, there has been disillusion in the growth potential of mobile technology, reflected in a continuous slide in the share price of both wireless carriers and their suppliers. When the world's largest software company pares back its own commitment to the sector, the pessimism will grow.

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