RIM now gets double attack from Microsoft, Nokia

Microsoft Corp and Nokia announced an alliance on Wednesday to bring business software to smartphones and counter the dominance
Apple of Research in Motion Ltd's BlackBerry.

The alliance between the world's largest software company and cellphone maker means the latest versions of Microsoft's Office applications, including Word, Excel, PowerPoint and messaging, will be available on a range of Nokia cellphones, which make up 45 per cent of the global smartphone market.

The two companies, at one time fierce rivals in the mobile telecommunications business, expect to offer Nokia phones running Office sometime next year.

"This is giving some of our competitors -- let's spell it out, RIM -- a run for their money," said Nokia Executive Vice President Robert Andersson, in a telephone interview. "I don't think BlackBerry has seen the kind of competition we can provide them now."

Research in Motion's BlackBerry created the market for mobile e-mail, and its dominant position in the corporate sector, especially in North America, has protected it from Nokia's attempts to crack the market in recent years.

"RIM should be reasonably safe in the near-term because Nokia's presence in the US is relatively small," said Neil Mawston from research firm Strategy Analytics. "Partnering more closely with Microsoft will help to raise Nokia's profile in the US"

The alliance also aims to counter Google Inc's recent move into free online software, targeted at Microsoft's business customers, and the growing popularity of Apple Inc's iPhone device.

"It's clear that Nokia and Microsoft are both facing competitive challenges, most notably from Google," said John Jackson, an analyst at wireless research firm CCS Insight. "It makes sense for these two companies to work together to see if they can pool their competitive strengths to try and counter some of this pressure."

The alliance means Microsoft's new Office suite of applications could be available to a much wider audience than the users of Windows Mobile phones, which make up 9 per cent of the smartphone market.

"We see this as a great opportunity to deliver Office Mobile to 200 million Nokia smartphone customers," said Takeshi Numoto, an executive at Microsoft's Office business.

Analysts said Microsoft is clearly looking at the largest possible audience with the Nokia deal.

"The deal is a good win for Microsoft and it will surely now be hoping to upsell the Microsoft suite of operating systems
into Nokia's possible portfolios of smartphones, mobile Internet devices and netbooks over the next couple of years," said Strategy Analytics' Mawston.

The two companies stressed that the new venture will not affect the future of Microsoft's Windows Mobile and Nokia's Symbian operating systems for smartphones. Executives said Nokia has no plans to make a Windows Mobile device.

"We are extremely committed to Symbian," said Andersson. "This is very clear. This is a multi-year collaboration building on Symbian. We are as committed as before, if not more," he said.

Microsoft shares rose 2.1 per cent to $23.62 on Nasdaq while Nokia rose less than 1 per cent to 9.30 euros in Helsinki. Shares in RIM were 0.5 per cent lower in Toronto.

Agencies

Is IBM no longer keen on buying Sun anymore?

IBM is no longer interested in buying smaller rival Sun Microsystems Inc at any price, CNBC reported, although many investors appear to believe a deal was still possible.

Citing sources close to Sun, CNBC said the high-end computer maker had approached International Business Machines Corp earlier this week to ask it to return to the negotiating table, indicating that Sun would be flexible about price.

But IBM has decided it is not interested in any further negotiations with Sun, the cable news network reported, citing sources close to IBM. IBM and Sun declined to comment.

IBM had withdrawn a $7 billion offer for Sun earlier this month, after the smaller company rejected the bid of up to $9.40 per share as too low, sources with knowledge of the matter have said.

Shares of Sun were up 4.24 percent at $6.39 after the CNBC report, but lower than before the market opened on Thursday. Sun traded at around $4.97 before talks between the two technology companies were first reported in March.

Avian Securities' head of research, Avi Cohen, said he believed the two sides would talk again.

"If the deal made sense a couple weeks ago, it certainly would still make sense today," he said. "If there was a willingness, which I think there is, if there was a business case, which I think there is, I think they will start up talks."

CNBC said IBM decided against the move after looking at Sun's structured contracts, as well as change of control clauses that would make an acquisition of the company costly.

It also reported that IBM's contacts within the US Justice Department, US Securities and Exchange Commission and the European Union have all advised the company that such a merger could be subject to an antitrust review lasting six to nine months.

Analysts have said a deal may be crucial for Sun's long-term survival as it has been losing market share in servers to IBM and Hewlett-Packard Co, and analysts expect it to report a third straight quarter of losses excluding special items.

Sun, which rose to prominence in the 1990s, had been searching for a buyer for several months, according to bankers.

The Silicon Valley company never fully recovered from the burst of the dot-com bubble burst in the early 2000s, when demand for servers cratered. It has also failed to fully capitalize on its software assets, including its Java software platform.

Agencies