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Qualcomm-Microsoft Venture Wireless Knowledge Will Close
Jun 05, 2003 (The San Diego Union-Tribune - Knight Ridder/Tribune Business News via COMTEX) -- Wireless Knowledge, a San Diego company created as a joint venture between Qualcomm and Microsoft, will close tomorrow.
Almost since its inception, Wireless Knowledge, which aimed to create a market for wireless data for businesses, faced troubles. From internal struggles between its two parent companies to a revolving door of chief executives, Wireless Knowledge failed to make inroads.
While the company was one of the first to focus on such services as wireless e-mail and calendars, it was eventually eclipsed by other companies, such as Research in Motion with its BlackBerry service.
After several years, Microsoft pulled out of the company in November 2001, and Qualcomm transformed Wireless Knowledge into a wholly owned subsidiary.
While Qualcomm portrayed that move as a positive for Wireless Knowledge, the company still couldn't sustain its business. After assessing Wireless Knowledge's potential over the past few months, Qualcomm decided it was best to fold the subsidiary into the parent company.
"Basically, they ran out of cash and are going home to mommy," said Isaac Ro, an industry analyst at Aberdeen Group, a Boston market research firm.
Most of Wireless Knowledge's employees are being transferred to Qualcomm along with the company's intellectual property. Qualcomm would not disclose the number of employees at Wireless Knowledge. At one time, it employed 170 workers, but the number had fallen to 130 by November 2001.
Ro said Wireless Knowledge, which was founded in 1998, was part of a crowded field of companies that aimed to provide wireless data applications for corporations. But the wireless networks were not ready to supply quality wireless data. As the economy faltered, corporations cut back on spending and were reluctant to spend on newfangled wireless applications that didn't have a clear impact on profitability, Ro said.
"The question was how do you justify wireless e-mail," he said.
Norm Fjeldheim, Qualcomm's chief information officer, who also served as chief executive of Wireless Knowledge since November, said the company had met its main objective.
"The bottom line is that Wireless Knowledge was created to get the wireless enterprise data market going," he said. "To some degree, we were successful."
As proof, Fjeldheim pointed to the number of major companies, such as Microsoft and IBM, that now are focusing on the market. Part of the reason Microsoft exited the joint venture was that Wireless Knowledge was increasingly competing with Microsoft's new wireless data product.
That's par for the course with the software giant, Ro said.
"Anytime you jump into bed with Microsoft, do so with caution," he said.
Another reason to fold Wireless Knowledge into Qualcomm was that Qualcomm increasingly has been focusing on the enterprise market. That new emphasis created what Fjeldheim called "redundant functions" between Qualcomm and Wireless Knowledge as the two organizations were making sales calls to many of the same customers. And it was the Qualcomm name that was more apt to open doors.
"It is easier to talk to Oracle as Qualcomm than it is to talk to Oracle as Wireless Knowledge," Fjeldheim said.
Because of those facts, he said, most of the Wireless Knowledge employees understood the decision to close the company.
Michael King, an analyst with Gartner Group, a market research firm, said the move to shut down Wireless Knowledge should come as no surprise because the company struggled for much of its existence. The company came to the market too early and was hobbled when the stronger parent exited the business.
"It is not necessarily a bad thing for Wireless Knowledge," King said. "It has been on this path for a long time. This is sort of like the other shoe dropping."


By Jennifer Davies
To see more of The San Diego Union-Tribune, or to subscribe to the newspaper, go to http://www.uniontrib.com
(c) 2003, The San Diego Union-Tribune. Distributed by Knight Ridder/TribuneBusiness News.
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