New Company To Bridge Wireless/Backbone Gap

Ericsson and Juniper Networks Inc. are launching a $50 million joint venture that will make equipment to bridge the gap between wireless networks and IP backbones. The companies together will go after a market that execs say will reach $50 billion in annual sales by the end of 2003 as the ranks of mobile Internet users swell to 600 million people.

The as-yet-unnamed company will be 60% owned by Ericsson, which will contribute its mobile-communication expertise, and 40% by Juniper, which will add its IP-routing know-how. Ericsson will appoint a CEO, and Juniper a chief operating officer, Ericsson president Kurt Hellstrom says.

"If the wireless IP market for handheld devices is successful, this is a very good" partnership, says Greg Howard, an analyst with the HTRC Group. But since the venture addresses the market for the next generation, "the question is whether the market will really take off like people predict," Howard says. The main challenge is that current wireless phones and other handheld devices are clumsy and difficult to use.