- IN THIS ISSUE:
- * The Market Is Thirsty for Education on Wireless
- * Thoughts from Las Vegas
- * Thoughts from Austin
- * Reader Feedback: Keys to Success in Japan
- * New Wireless Venture Funds, Incubators,…
- * Mobile Internet Information Sources and Marcom Opportunities
- * Ericsson Improvement Opportunities
Neighbor update: I ran again into my neighbor who recently left CS First Boston to form his own VC firm together with other CSFB investment bankers. He says they have got investment commitments for $3.5 bn so far, the size of the fund will be $1bn - focusing on data communications and wireless. Even if the fund is not in place yet, they have already made over 20 investments - that tells you something about the speed that is needed in this business. He also mentioned that CSFB did not like his departure and offered him a re-signup bonus of over $10 million in cash. He declined. He also claims to know that Claes Rickeby owned 25 % of Qeyton Systems and that he got in the recent deal $200 million worth of Cisco stock. I guess I have to believe him.
To all those people who sent their CVs to me regarding job opportunities within BU BAPP: the management is still reorganizing but on a positive note now things are happening a lot faster. I will give you feedback when the time is ripe - perhaps only after the vacations.
In this newsletter I have put down some thoughts based on visiting two CTIA wireless events in the US - Wireless Partnering International in Las Vegas and Wireless Agenda 2000 in Austin, TX.
Best regards
Tapio Anttila
THE MARKET IS THIRSTY FOR EDUCATION ON WIRELESS
Both of the CTIA shows I attended clearly indicate that analysts, corporate customers and developers are craving for more information on the future business potential of wireless in general and mobile Internet in particular. Both of the shows were well attended (500+ people in Austin) and a general comment in Austin was: “There are incredibly many analysts here.”
Our presence in Las Vegas was Skip Bryan participating in a panel discussion. In Austin we had one very good presentation from Doug Johnson on m-commerce at the end of the conference when most people had left. Not good enough!
Neither of the shows was well organized: speakers exceeding allocated time, poor moderators who allowed ‘product pitching’. CTIA should understand that they are a good trade association but not a marcom company and they should outsource the marcom part to professionals. I told this to Mark Desautels, the CEO of Wireless Data Forum, and offered help from Ericsson. He was interested. They all are. It is great to work for Ericsson, we have all the opportunities to do this right. But so far we don’t.
Ericsson has now a golden opportunity to fight for mind share on the US market. Our competition is active and in the absence of Ericsson they of course try to marginalize our role. Be it the responsibility of EUS or EWIS, looks like nobody is taking action here. The analysts left Austin with the message from Andy Seybold that GPRS is a failure and CDMA is superior technology. Don’t come and cry afterwards when that backfires on the marketplace.
THOUGHTS FROM LAS VEGAS
SBC outlined their ‘fast follower’ position in entering the mobile Internet market. What was interesting was that they indicated they are discussing a major acquisition in the hosting area. Maybe Exodus?
Akamai seems to have a strong wireless strategy, they had sent one of their co-founders to the show. Their message is clear: “We are a content distribution service for the content industry and we want to extend our reach into wireless services through partnerships with carriers.” The company is obviously a prime candidate to partner with Ericsson in bringing content to our WISE Portal. This was the most important finding from my trip to Las Vegas - a real major opportunity! http://www.akamai.com/
We should also re-evaluate the Israeli WAP infrastructure company Exalink. They seem to have installations already in ten countries. Another company we should see as a service portal partner is Clickservices.com. They promise the ‘fastest time-to-market to transform and deploy wireless content in 12 languages’. http://www.exalink.com/ http://www.clickservices.com/bin/main
Senior executives from Motorola seem all to be quite comfortable discussing new economy, emerging business models and other topics needed when convincing a ‘new economy audience’. They are not necessarily brilliant but they seem to have had some systematical training since they all perform fairly well. I think it is time for Ericsson to train our top 500 executives in a similar fashion.
THOUGHTS FROM AUSTIN
Andy Seybold is one of the leading authorities on wireless Internet in the US. His Wireless Data University gives a very good overview on the current market situation. Unfortunately he has a rather pessimistic view on GPRS, he does not believe that the full-duplex four time slot technologies would be implemented in the US, due to competition from EDGE and CDMA 2000. Thus, the audience left the room understanding that GPRS is old European technology with modest data rates of maximum 38.4 kbps downstream and 9.6 kbps upstream. You might want to visit his website http://www.wirelessroadmap.com/ for current network availability forecasts. Interestingly, Andy believes AOL will bid in the upcoming 700 MHz auctions. He says that moving 20% of their users into wireless would make them the 5th largest carrier in the US and it would create an immediate new revenue stream.
Harry B Kargman from Kargo.com is developing a WAP design environment Ericsson should look into. I saw Harry talking Richard Lynch, Chairman of Wireless Data Forum and EVP & CTO of Verizon Wireless. “Harry, did you just try to hire that guy?” “Yes, how did you guess? I am doing it all the time.” It was very apparent at the show that senior executives in our customer organizations are constantly headhunted by mobile Internet startups. The industry consolidation adds more fuel onto the fire: the entire Omnipoint top management was fired after the acquisition by Voicestream. As a result Steve McCrudden, one of the SVPs found himself in the street. However, all he had to do was to accept the offer from Cellmania.com. And now more about the company… mobileID has entered into a strategic e-commerce partnership with Cellmania.com, a leading online cellular phone and accessory reseller. Through this joint agreement, Cellmania.com and mobileID will work together to add the mobileID bookmark to every Internet-ready mobile phone that is sold through Cellmania.com. http://www.mobileid.com/news/index.cfm?KEYPAGE=VIEWNEWS&NewsID=3
Microsoft is showing their warm support for the emerging mobile Internet market. They organized a special workshop alongside the event. Ericsson should look into working with Brauning Consultants, a marcom consultancy in charge of this and other Microsoft events. In the light of our new joint venture, we could certainly better reap synergies by learning from what Brauning has already done.
Inovate Communications Group is putting together a venture fund for mobile Internet related investments. One of the partners is Perry LaForge, the Chairman of CDMA Developers’ Group. Perry wants to grow the CDMA ecosystem and make money for himself while doing it. In comparison, the Chairman of the GSM Association, James Healy, is a tired old man barely capable of more than telling jokes in his presentation. We should try to get him consider a career move into golf as soon as possible. The GSM community needs someone who can accurately represent the wealth of innovation the technology generates in Europe and Asia.
I talked to Kendra VenderMeulen, SVP of Product Strategy and Development at AT&T Wireless. “Kendra, tell me three most important things on your wish list for Ericsson!” “Firstly, get us the phones quicker. I am very happy to have now the CDPD phone but boy, was that an effort to squeeze them from you! Secondly, make sure we get the EDGE infrastructure in time. Thirdly, drive the WAP Forum to produce commercially viable standards. The main reason why we wanted a Phone.com browser on our Ericsson phone was that they support commercially important features such as cookies. This is something the WAP Forum has not paid enough attention to”, says Kendra. Joining the discussion is Tom Trinneer, VP Data Product Development. “And how could Ericsson help you with applications development?” You have nothing to do with applications, just stick to your core competencies which are terminals and infrastructure. We listened to your portal strategy presentation once but did not really find it interesting. Besides, we already have a major partnership with Microsoft and BT underway”, says Tom. Boy, was that motivating! I guess we have to work harder to communicate our efforts.
READER FEEDBACK - KEYS TO SUCCESS IN JAPAN
One of the IOW readers in Japan writes: “Let readers know that this years was a major hit with Ericsson cusotmers - particularly re. understanding service applications & terminals from a Japanese perspective (remember at start of iMode talk in Spring ‘99 I told you of East/West contrast regarding approaches to the market - technology driven vs consumer focus), and about Japan being strongly terminal OEM driven: all applications are in the terminals. These guys walked away with heads-up insight into mobile internet (Japan now has 10m mob. internet users), access methods, and revenue models.
Please spread the word: J-Phone (#2 brand in Japan, 8m+ subs) mobile internet service is “J-Sky” - since
launch in Dec 99, there are now 1m J-Sky-enabled (internet access) terminals on the market. THESE PHONES
LEAVE I-MODE BEHIND IN DUST: feature Sharp’s brilliant (best in class) 256 color, 3-5 tone harmonized
melodies (utilizing c-MIDI server) both in terminal & of course tons avail on web & w-in the portal - the qty
and type of synthesized/harmonized songs (”melodies” in Japan) are limited only by imagination of all the
private little guys out there becoming such CPs for kicks & $. Tapio, the big thing here is that melodies, along
with Bandai (download images: Manga-type) have become killer sought after services among the portal CP choices. The biggest fad amongst kids (85% penetration) right now is to see who can find the newest “melody” on the web, download/save it, and then fwd it to friends in form of a message complete with picture & text (up to 6000 bytes - vs iMode’s 3000 bytes) The “J-Sky” phone, is also intuitively way ahead of iMode in its interface & usability - within the J-Phone’s portal, each content menu is prefaced by a nifty icon, symbolic of the content within!
Main lesson: we need to convince head office & Lund to pay attention to what’s going on here, use/gain more knowledge and leverage it into our global developments for terminals - - - -we would clean up on the terminal side! If in doubt, one only has to look around at consumer electronics gizmos that have been a huge hit in
the West since leaving Japan.”
NEW MOBILE VENTURE FUNDS, INCUBATORS,…
MobileSpring is a New York-based “startup factory” that develops and deploys innovative e-commerce, communications and entertainment services that focus on the unique needs of mobile consumers and businesses. It was founded in March 2000 by Marc Caron, one of the founders of Omnipoint. http://www.mobilespring.com/
Benchmark Capital and Idealab may be invading Western Europe, but Draper Fisher Jurvetson (DFJ) plans to take over the world. DFJ, with $700 million under management, quietly has been raising a huge new fund, hiring local VCs in far-flung countries, and making a handful of investments in foreign tech firms. Sources close to DFJ estimate the fund will range from $1 billion to $1.5 billion. http://www.redherring.com/vc/2000/0526/vc-eplanet052600.html
ci4net.com, a private equity firm, launched a U.K.-based Internet incubator called ismartlab.com. The new unit will target U.K. entrepreneurs with business ideas in four areas: WAP, interactive television, e-commerce, and online marketing and advertising. http://www.ismartlab.com/
U.S. VCs are actively scouting for European start-ups. Benchmark, for example, recently closed a $750 million fund dedicated to European start-ups. Other VCs are also beating hedgerows in the UK, trying to flush out new entrepreneurs. In many cases the money behind new funds dedicated to the European market is coming from U.S. sources. Some of the backers of Benchmark’s Europe I Fund include the U.S.-based founders of LoudCloud, eBay, Be, and other companies.
General Atlantic Partners, a private equity firm focused on investing in information technology, said it founded Apollis, a new independent company that will create, develop, fund, and acquire businesses focused on the wireless market. The company plans to operate throughout Europe. McKinsey & Company will provide advisory and consulting services for the new company. http://www.apollis.com/
Polaris Venture Capital, which is based in both Israel and the U.S., said it closed Polaris Fund III with $500 million in committed capital. The new fund, the fourth in the firm’s Polaris and Eucalyptus group, will target seed and early-stage companies in several fields, including communication infrastructure, optical networks and cellular technologies. http://www.polarisvc.com/
Sybase announced a $50 million “Innovation Fund.” The company plans to invest up to $5 million each in emerging technologies focused on online business markets. The fund will make investments in a variety of IT fields, including mobile and wireless technologies. http://www.sybase.com/
MOBILE INTERNET INFORMATION SOURCES & MARCOM OPPORTUNITIES
Wireless Business Information Network, a resource for companies wishing to utilize wireless technology in their businesses, announced its launch. It is funded by individuals. http://www.tobwireless.com/
Fiercewireless.com is a newsletter founded a few weeks ago by a young Harvard graduate Jeff Giesea. In a few weeks he has received close to 10,000 subscribers. Jeff’s ambition is to build a company that would be the ‘mobile economy equivalent’ of The Industry Standard. Warmly recommended. http://www.fiercewireless.com/
Unstrung is a new online lifestyle publication on mobile Internet. It is kind of the wireless equivalent of Wired Magazine. Also warmly recommended. http://www.unstrung.com/index.php3
ERICSSON IMPROVEMENT OPPORTUNITIES
Our phones distribution strategy is still a ’sleeping beauty’. Motorola seems to be associated with the leaders engaging them in strategic alliances. First came the $15m investment in Point.com, now they also seem to have a relationship with Cellmania.com. Also, mobileID has entered into a strategic e-commerce partnership with Cellmania.com. Through this joint agreement, Cellmania.com and mobileID will work together to add the mobileID bookmark to every Internet-ready mobile phone that is sold through Cellmania.com. I think we should be much more aggressive in this area than we currently are. We cannot just let Vodafone-Airtouch and AT&T Wireless define our mobile phone distribution strategy. How can Motorola get away with the same channel conflict as we have? I bet they just simply have more balls.
QUICK TAKES
VideoCell, an Israeli startup, develops enables real-time videoconferencing over cellular, wireless, and other low-bandwidth connections. The company’s technology enables 20 to 25 frames per second, higher than the two to five frames currently available. Oplink provides a platform for the transmission and reception of data by means of infrared light. http://www.yellowave.com/
Datria Systems, a provider of mobile speech application software that allows mobile workers to interact with remote databases in real time, said it received $5.3 million in Series B funding. Location-aware voice-based data collection. Cool! http://www.datria.com
Ewireless, which holds patents on abbreviated dialing technologies to respond to radio and outdoor advertising, received $11 million in its second round. Ewireless provides a free service that allows wireless phone users to respond to outdoor or radio advertising by dialing #333. The service works with all wireless carriers. The consumer launch of the service is scheduled for late summer. http://www.ewireless.net/
SalesMountain.com, which provides location-based personal shopping guide, shopper, and e-mail alert services, said it raised $12 million in its second round. The company will use the funds to launch its services in Europe
and expand its wireless and wireline products and services. http://www.salesmountain.com/
The Gatespace CEO Staffan Truve from Gothenburg did not come in vain to PC Forum in March… The startup, founded by CR&T and Ericsson in 1999 around the Open Service Gateway Initiative, got $11m first round financing from blue-chip VC firms. http://www.gatespace.com/news/20000522.shtml
AT&T invested $60 million in Tellme Networks, Inc. and will provide network services to support the voice portal’s operations on an ongoing basis. They have a trial version available for those living in the US. Lycos and Quack.com introduced a strategic partnership. Ericsson still does not have any voice portal strategy. http://www.tellme.com/ http://www.quack.com/
Lucent and Novell completed the draft specifications for a new API called “Presence and Availability Management” (PAM). The PAM specification describes a software platform designed for two key functions: first, service providers will be able to share customer data securely; second, they will be able to deliver advanced, customizable voice and data services that interact across both wired and wireless networks. Are we in? http://www.pamforum.org/
IBM is creating a new Internet marketplace, e2open.com, with ten major telecommunications and electronics companies to deal with suppliers. e2open.com includes such companies as Ericsson, Hitachi, LG Electronics, Matshushita, Motorola, Nokia, Nortel Networks, Philips, Seagate, Solectron and Toshiba. According to Mark Anderson of SNS News Service (one of the best industry analysts) this is the future gorilla of the industry - hopefully we have an equity stake in it…
Sybase (60% market share in mobile databases) just became an important player in the enterprise and vertical markets for mobile Internet with the announcement of iAnywhereSolutions. Ericsson is apparently involved. http://www.ianywheresolutions.com/
The Zkey is the first ever true platform and device independent, universal, alpha-numeric, private, field selective access code to personal, professional, and commercial information exchange. Got it? They have a fresh wireless strategy, time to take a look! http://www.zkey.com/corporate/wireless.php3
Wireless search is extremely important for the success of mobile Internet and WAP in particular. We all would like to find fast the right WAP site with good usability. Fortunately there is lots of activity in this area: PinPoint, Google, Looksmart, Xift,… Go take a look! http://www.pinpoint.com/wireless_search.html http://www.google.com/wap.html http://www.xift.com/
The Finnish company Codeonline is developing ‘universal feedback solutions’ for distance learning, games and so forth. They have a strong focus on WAP and they just opened their US operations in Austin, TX. These people are in the forefront of user interface design for distance learning. http://www.codeonline.com/press/release2.html
Corrigo’s suite of mobile service management (MSM) tools and their ASP model offers a solution for field/sales force management. This startup comprises mainly of ex-Motorola employees. CMGI participated in their recent $12m round. http://www.corrigo.com/
MobileLogic who completed a $25m round in March, launched in May their solution for secure wireless access to corporate data. Ericsson is one of their strategic partners - I wonder whether we ever invested in them? http://www.mobilelogic.com/
Done.com has put a task flow managent solution on top of conferencing tools and other business communication elements to offer a wireless task flow management environment as an ASP solution. Maybe our PROPS consultants have also come up with this…? http://www.done.com
Jarna is an early-stage ASP developing an intelligent communications platform for enterprise customers, combining wired and wireless worlds. They recently closed a $6.5 m first round. The company is founded by executives from Nortel, Sprint and Sun. http://www.jarna.com
Action Engine, whose technology uses Web-enabled wireless and wired devices to manage the logistics of tasks, said it closed on $7.7 million in its first round of financing. They have a blue chip management team from Microsoft, Boeing and Lockheed. http://www.action-engine.com/
Ivus, a provider of outsourced customer service and sales to Internet commerce companies, raised in December a $6m round from Draper Fisher Jurvetson and recently hired a senior executive from Lucent’s call center ,di,vision as Chairman. The business idea is excellent since outsourced customer service is a critical component for small web businesses to succeed. http://www.ivustech.com/
BulletIN.net, a developer and international supplier of wireless Internet messaging products, said it raised $15 million in its first round of funding. http://www.bulletin.net/
Rx Remedy, which provides interactive healthcare content and health-management resources, said it entered into a multimillion dollar agreement with InfoSpace, a publicly traded provider of infrastructure services for wireless technologies, merchants, and Web sites. InfoSpace will receive up to $17.5 million in cash and a 2.6% stake in the Rx Remedy http://www.rxremedy.com/
Check out the new group mobile telephone service from Incirco in Sweden! The service can be used for all kinds of things, from rebooking a meeting, organising a round of golf and updating a project group, to bringing about an executive decision in a crisis. Joining Incirco is free, with users pay only for the calls they make at standard mobile rates. http://www.incirco.com/company/english.shtml
ITERU.NET announced MEMOs, a Multi-platform Electronic Message Originator and COLONIES, Mobile-centric Online Communities. Designed for use with any WAP enabled device, MEMOs enables users to send a single message simultaneously to multiple recipient messaging platforms including SMS, E-mail, ICQ and Fax. http://www.iteru.net
SkyGo announced their formation as a new company dedicated to providing a platform for wireless interactive marketing that will be available for licensing to credit card companies, wireless services providers and Internet companies. The company will launch a trial of the platform and services late this summer. http://www.skygo.com/
(To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)
SELECTED THOUGHTFUL BROWSING
Here comes your monthly dose of ‘Nokia understanding’. “In 1993, Nokia sold shares of stock privately for the first time to U.S. investors. Mike Lu, then a 23-year-old analyst at Janus Capital Corp., liked the easy-to-use handsets and persuaded his bosses to buy into the private placement…. The decision proved a boon for Janus, Nokia’s biggest shareholder, with a roughly 5 percent stake worth $13.5 billion.” Go to http://webacademy.ericsson.se for article link.
Nokia is laying the foundation for its 3G strategy on entertainment. Ericsson is looking at Nokia’s venture investments in game companies and judging them as ‘blue sky’ investments. Think again. Read the article from Tornado Insider! http://tornado-insider.com/programs/publish/fv.asp?article_id=246
One day, maybe in 2005, the consumer-to-consumer media commerce will take off in a big way. Companies like Digital Indie will become huge digital home video portals. Don’t forget the Blair Witch Project in 1999: with $60,000 production and $260,000 post production costs achieved $140 million in box office revenues. Somewhere there is an opportunity for a real-time, low-end version of this - 3G. http://www.digitalindie.com/
What is a former senior banker from Lehman Brothers and a Harvard graduate doing at an upscale rap/graffiti etailer startup? You may wonder - times are-a-changin’. Anyway, they got a $12m round recently. Ericsson: talk to that Swedish ad agency who created the brand for Diesel youth wear! Swedes can do it. http://www.hookt.com/index_flash.html
Four years ago I made the mistake of predicting that background audio from Realnetworks would be an important customer retention component for e-commerce sites. However, with the advent of broadband, technologies like the interactive audio technology from Beatnik are enabling pretty compelling shopping experiences. Download the player component and go to Lycrashop, you will feel like you are in the middle of a traffic jam on Manhattan, rushing from one shop to the other. Enter one of boutiques and the music environment changes. One day we will all shop this way, the experience economy is moving online! Implications for mobile services? The company has MTVi as the lead investor, they just got $30m of new financing and they state they have a vision for mobile Internet services. http://www.beatnik.com/ http://www.lycrashop.com/
MIT Media Lab spin-off Charmed Technology is developing wearable computing devices in partnership with Motorola, Intel and Lucent. They just completed a $3.5m seed round of financing. Ericsson is not yet active in developing wearable computing solutions, as far as I know. http://www.infocharms.com/ This was also a way for the founder Alex Lightman to combine the boring world of tech types (http://www.infocharms.com/corporate/press/articles/iw-newyork-99/show/behind/4.htm) with the exciting world of fashion types (http://www.infocharms.com/corporate/press/articles/iw-newyork-99/show/7.htm).
