Article (ChinaOnline News): Spyglass Eyes China Market
By William J. McMahon
ChinaOnline News
chinaonline.com
(1/12/2000) Internet pioneer Spyglass Inc., one of the first Internet browser developers, is finding itself ? and its stock ? back in vogue again after a surprising revenue turnaround in 1999, several new Internet software products, and an increasing international reach that includes the red-hot Greater China IT market.
Last week, shares of Spyglass (Nasdaq: SPYG) jumped to a 52-week high after market guru Steve Harmon named the Internet software company as one of his "Top 10 Stock Picks for 2000." Following the news, the company?s share price rose from around US$25 to US$54 per share before settling down to around US$44 on January 12.
Harmon?s excitement was in part due to a series of licensing deals Spyglass secured last year to put its Device Mosaic browser, and other related Internet technologies, on a wide array of consumer related products.
Spyglasses? Device Mosaic and content converter technologies work in synch to create electronic programming guides, video-on-demand services, and an array of other commerce services via a set-top box, hand held PC, or other Web appliance.
Greater China Prism, Hong Kong Trigger
Positioning itself at the forefront of the convergence movement ? the merging of telecommunications, cable TV and the Internet ? will only strengthen Spyglass? position in Asia, according to Kazumi Tagami, Spyglass general manager of Japanese professional services.
Admitting that currently his company still has a relatively small footprint in the Asia market, Tagami told ChinaOnline that his company plans to use its North American strategy of partnering with established firms to pay big dividends in the Asia market.
Tagami says one of the company?s strongest clients is Hong Kong Telecom, which has already signed up for 10,000 technology licenses for Device Mosaic. "And they are planning to expand," he added.
Explaining Spyglass? move into Hong Kong, and not the mainland, Tagami said the mainland?s "web world is not yet mature."
"Hong Kong is still the trigger," he said. "Hong Kong?s market is very mature."
Running Device Mosaic in tandem with Prism, a content conversion, caching, and filtering program, provides the technical fix to pipe web content across delivery platforms, including through televisions, cable and Internet set-top boxes, Tagami said. He said Internet TV is currently the hottest application for this technology in the Asia market.
"Interactive TV in Hong Kong is the most advanced in Asia," Tagami said. "Japan is advanced, but still behind the U.S."
Spyglass intends to capitalize on this convergence boom underway in Hong Kong by not only selling its technology, but by using its reputation as an Internet first mover to gain ground in the lucrative Internet consulting market.
With China?s Internet users growing at a spectacular clip, up from 2.1 million a year ago, climbing to some 4 million users at the end of August, and around 8 million by the end of December, and with projections as high as 20 million in the coming two years, the move to quietly position itself at the backend of a booming market appears to be a smart one.
Web appliance boom, licensing deals
At last week?s Consumer Electronics Show in Las Vegas, the enthusiasm in the IT industry for web appliances was clearly evident. Most noticeable was Intel?s move into the Internet ready consumer electronics area. Last week, Intel said it plans to roll out a whole range of new Web appliances by mid-2000.
"We see a significant business opportunity to bring the Internet to new devices in the home,' said Claude Leglise, vice president, Intel Architecture Business Group, and general manager of the Home Products Group.
Noting the near ubiquitousness of cell phones in some areas, Spyglass? Tagami says the Asian market is particularly drawn to web appliances, which range from handheld notepads, cellular phones, laptop computers, to Internet TV devices.
Last May, IBM Microelectronics picked Spyglass? Device Mosaic to use on its digital set-top platform in a deal that allows set-top box manufacturers, including makers of digital video broadcasting systems, to license the technology.
Japan?s NEC, which is supporting Intel's Web appliance development in Japan, is also in partnership with Spyglass, Tagami said. However, he declined to provide details of the NEC deal.
NEC has already announced that it is concentrating its Web appliance development in the financial services market, working with application service providers to roll out a home service terminal by mid-2000.
In December, Spyglass announced that Rockwell Collins, whose customers include American Airlines, Delta Air Lines Inc., and British Airways, will put Device Mosaic system in its new in-flight Internet entertainment system.
Last spring, Spyglass bought Navitel Communications, a developer of programs for Windows CE-based Web appliances.
Spyglass reported that fiscal third quarter revenues rose 49 percent, driven by its technology licensing and professional services businesses. Third quarter revenue numbers, which ended September 30, increased to US$9.2 million from US$6.2 million in 3Q 1998.
Last September, Spyglass said the growth was due to a 68% increase in technology licensing revenue and a 32% jump in revenue from its professional services business.
To contact William J. McMahon:
P: (312) 335-3024
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E: bmcmahon@chinaonline.com |
