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Microsoft, Qualcomm To Get Wired

Microsoft and Qualcomm are set to unveil plans Tuesday aimed at expanding the uses of cellular phones to handle data traffic, e-mail and Internet browsing for corporate clients.

While data is quickly becoming the dominant form of traffic over regular phone networks - surpassing old-fashioned voice calls - barely any data at all travels over wireless networks.

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QUALCOMM (QCOM)
Companies like Qualcomm (QCOM), a maker of wireless phones based on its proprietary CDMA standard, want to sell equipment that will boost the ability of individuals and companies to send data over wireless networks. For its part, Microsoft (MSFT) hopes its Windows CE software will become the application for phones designed for data traffic.

In recent trading, Qualcomm's stock fell 3/16 to 56 7/16. Microsoft shares rose 5/16 to 111. The two companies will announce their plans at 4:15 p.m. EST from Microsoft's headquarters in Redmond, Wash.

The Qualcomm-Microsoft venture comes shortly after the formation of Symbian, a wireless-phone alliance that includes Motorola Inc. (MOT), Ericsson (ERICY) of Sweden and Nokia (NOK.A) of Finland. Symbian plans to develop wireless phones based on an operating system of Britain's Psion PLC.

The goal is to enable laptop computer users to connect reliably and speedily to corporate computer networks over cellular or other wireless systems, while at the same time providing tip-top security. Previously, companies have been concerned about lax security and the slow speed and frequent cutoffs of data transmission over wireless networks.

The alliance with Microsoft likely will give Qualcomm a boost. The scrappy San Diego-based telecommunications pioneer is struggling to gain acceptance for its code division multiple access digital cellular standard. If the venture succeeds, that could sharply boost sales of Qualcomm wireless phones.

Microsoft, meanwhile, is trying to head off the challenge from Psion in the market for software to run devices such as wireless phones, handheld computers, consumer electronics, set-top boxes and the like.

Ironically, one of Microsoft' longtime allies, Motorola, hooked up with the Symbian alliance, spurning offers from Microsoft to create their own venture, The Wall Street Journal reported last week. Motorola apparently was worried about Microsoft capturing a toehold in another high-tech sector.

Written By Jeffry Bartash

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