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Aether pumps $20 million into Novatel Wireless

The wireless data services company expands its relationship with the maker of modems that give notebooks and handheld devices a wireless connection to the Internet.

Aether Systems, a wireless Internet services company, said today it has invested $20 million in Novatel Wireless, building on their existing relationship.

Aether, based in Owings Mills, Md., provides wireless data services, such as real-time stock quotes and wireless messaging. San Diego-based Novatel makes modems that give notebook computers and devices, such as Palm's line of personal digital assistants and Microsoft's Pocket PC, a wireless connection to the Internet.

The market for this type of untethered Internet access is projected to be huge. The number of people using two-way wireless devices will reach 61.5 million in 2003, up from 7.4 million last year, an increase of 728 percent, according to International Data Corp.

"We are very pleased to receive this strategic investment from Aether Systems to continue development of products for the fast-growing wireless data market," Melvin Flowers, Novatel's chief financial officer, said in a statement.

Novatel announced earlier this month that it would begin making wireless modems to work with Handspring's Visor handheld computer. The Minstrel Wireless Modem will fit into the Springboard expansion slot on the Visor, which is based on the Palm operating system.

Novatel's Minstrel modem for the Palm V is marketed in conjunction with the OmniSky wireless service. Aether is a major investor in OmniSky, a venture it formed with 3Com.

"Aether and Novatel Wireless have enjoyed a successful relationship working together to provide leading wireless solutions," David Oros, CEO of Aether, said in a statement. "As the market for wireless data continues to grow, we hope this investment will help Novatel Wireless and Aether take advantage of the opportunities that await."