Ericsson as a CMDA supplier
Persson, who had been behind the acquisition of Qualcomm’s systems operations, was asked to manage it as part of the new business division for CDMA within the framework of Ericsson Wireless Communications Systems. Head office was in San Diego, with a unit in Boulder, Colorado.
A complete CDMA-based system architecture was developed under the leadership of Håkan Djuphammar, building on the nucleus taken over through the acquisition; the services division also developed a CDMA offering. In all, Ericsson’s CDMA operation eventually employed 3,000 staff.
“I ran into the most difficult task in all my years at Ericsson in San Diego,” Persson says. “Qualcomm employees were all taking part in an options program but were going to lose their options in connection with their transfer to a new employer. What could we offer them instead?”
The answer was a new stock-option system. This encountered internal opposition in Ericsson, where such programs were largely unknown. “There was a lot of internal discussion, and many people within Ericsson felt you should not be able to earn money like that. But in the end I managed to introduce an option system that also included the rest of the group,” Persson says.
The options issue was to have more of an impact than he could believe. “I guessed that Qualcomm’s share price would rise by a factor of two or three as a result of the deal but instead it went up 2,600 percent. I selected 1,400 people from Qualcomm that I wanted working for us. Because of their options, those who were left behind ended up rolling in money.”
BILL GATES ONE DAY TOO LATE
There were two new concepts introduced in the mobile world in 1998: WAP and Symbian. WAP stands for Wireless Application Protocol, and offered a technology to enable mobile phones to communicate with the internet. Ericsson’s route to WAP started in an internal project in 1995 but the company soon concluded that it would be better to develop the protocol in cooperation with the rest of the industry. The result, in September 1997, was that Ericsson, Nokia, Motorola and Unwired Planet, based in Silicon Valley, jointly presented the architecture for WAP. WAP 1.0 was launched in April 1998 as an open, license-free standard.
Symbian was the name given to an operating system for mobile phones launched through similar cooperation. The starting point was an operating system called EPOC, adapted for small screens, that had been developed by a company called Psion, founded by Sir David Potter, a university professor. In 1997 Psion began providing support for touch screens, which was licensed to Ericsson and other companies. In the following year, Ericsson, Nokia, Motorola and Psion established a jointly owned company to continue developing EPOC, which now changed its name to Symbian OS.
The road that led to Symbian was not, however, as smooth as it appeared to outsiders. Ericsson’s preferred partner in this cooperation was initially Microsoft, which for a long time displayed little enthusiasm. On several occasions, the head of Microsoft, Bill Gates, expressed interest in both WAP and cooperation on a mobile operating system. But it was not until a visit to Kista in February 1998 that he did anything about it, inviting Ericsson to an in-depth seminar at Microsoft’s head office in Redmond later that spring.
But Gates was one day too late: the day before his visit, the companies had reached agreement on Symbian.
Author: Svenolof Karlsson & Anders Lugn
Morgan Bengtsson, right, CEO of Ericsson Nippon, signing the agreement to make Matsushita a new part-owner of Symbian.