The companies will work together to embed PacketVideo's mobile phone video software into the microchips that Lucent creates for use in cell phones.
The deal marks at least the third arrangement PacketVideo has secured in its quest to make its software part of the basic infrastructure of wireless phones. It has also agreed to build its streaming-video software into Intel's and Texas Instruments' chips.
PacketVideo is one of several companies that are working to bring video to cell phones, even if few people have adopted text Web surfing as an everyday habit. The company's software has been shown off by AT&T and other carriers as an example of what will be possible when the networks upgrade to next-generation, high-speed wireless technology.
Despite PacketVideo's successes, it has been shadowed by some of the same clouds looming over other Internet companies.
The company filed to go public in March, riding the early wave of a tide that brought gold to anything wireless-related. But the company has since pulled its IPO bid and says it's pursuing "a number of funding alternatives."
A spokeswoman said the start-up is still considering a public offering but has no date set, and that it may elect to go with another round of private funding instead, among other options. The company's last round of funding was in May, bringing $16.5 million into the corporate coffers.