L.M. Ericsson Telephone Co. has agreed to license its mobile handset technology to South Korea's LG Electronics Inc., allowing the Seoul-based company to develop GPRS/UMTS (General Packet Radio Service/Universal Mobile Telecommunications System) dual-mode 3G (third-generation) handsets, the companies announced Thursday.
Ericsson will provide LG Electronics with component specifications, printed circuit board schematics and software, which LG Electronics will use to customize the upcoming handset, Ericsson and LG Electronics said in a joint statement.
Ericsson and LG Electronics could not immediately be reached for comment.
Though the companies did not disclose specific terms of the deal, LG Electronics will pay Ericsson a license fee for its core mobile handset technology, Ericsson and LG Electronics said.
This is the second such 3G licensing deal Ericsson has inked, having agreed to similar terms with Sony Ericsson Mobile Communications AB, the joint venture it launched with Sony Corp. last August.
According to Ericsson, it holds the world's largest 2.5G (or GPRS) and 3G IPR (Intellectual Property Rights) portfolio and its licensing agreement allows it to profit from its intellectual property holdings. LG Electronics can benefit from those technologies without having to sink investment money into research and development, the companies said.
The Swedish telecommunication equipment maker -- which has been battling losses at its handset business while losing market share -- is increasingly moving into supplying software and services for other companies. On Tuesday, Ericsson announced it will be supplying multimedia messaging software (MMS) to Vodafone Group PLC, the world's largest mobile phone operator.
MMS is being billed as the successor to SMS (Short Message Service) and will allow users to send multimedia messages containing graphics, photographic images, audio and video clips between devices. Those devices would use such mobile technologies as WAP (Wireless Application Protocol), GPRS and UMTS or 3G technologies.
Ericsson has been closely involved in the development and testing of MMS, particularly through its Sony Ericsson joint venture, as well as working with Motorola Inc., Siemens AG and software and systems developers CMG PLC, Comverse Technology Inc. and Logica PLC.
Vodafone plans to offer its customers MMS services in the second half of the year, Ericsson and Vodafone said in a joint statement. The companies did not disclose any terms of the deal.