The company announced Tuesday that it is establishing a wholly owned company, Ericsson Internet Applications and Solutions, which will be headed by Ericsson veteran Lars Bowman.
The division will develop software applications and services for mobile computing and will replace the company's Internet applications division. The move is part of an ongoing trend, with competitor Nokia also looking to software as a means to play a larger role in the emerging wireless Net industry.
"By concentrating our competence in this new company, we will stimulate and support the large roll-outs of mobile Internet systems," Bowman said in a statement.
Bowman is replacing former division head Haijo Pietersma. Ericsson said Pietersma has "decided to leave Ericsson to pursue new opportunities."
The move comes as the handset market seems to be getting hit by a sales malaise.
Motorola disclosed that it expects handset sales for 2001 to be about 525 million, about 50 million less than expected. The slowdown has also struck Nokia, which project that 550 million units will be sold in 2001, below company expectations.
Gartner Dataquest's latest figures show that Nokia has a 30.6 percent market share of handset sales. That is more than double Motorola's market share of about 13.3 percent.