Swedish Startup Challenges Palmtop Giants
europe.cnn.com
February 1, 2001
Web posted at: 1200 GMT
STOCKHOLM, Sweden (Reuters) -- Swedish startup Echoo plans to raise tens of millions of dollars in an initial public offering next year to launch a palmtop Internet device across Europe set to undercut more pricey rival products made by Palm and Nokia.
Echoo has burned about $5.0 million in venture capital since its creation in 1999 but aims for annual sales of $200 million within 36 months, its chief executive Ola Bartholdson told Reuters in an interview on Thursday.
"We will be profitable already next month. We can prove we are accepted on the market," Bartholdson said.
Echoo's Netboard palmtop computer is due to launch in Sweden next month and later in Britain, France and Germany, where it will challenge Internet-able mobile phones such as Nokia's Communicator and Ericsson's planned R520.
Bartholdson said he expected the European market for such data "communicators" -- personal digital assistants (PDAs) used for wireless Internet access -- to explode from about one million units now to 30 million by 2003.
Palm Inc, Echoo's most direct competitor, has already launched a similar data-only terminal, the Palm VII, but that only works in the United States for the moment.
Echoo hopes to corner the European market, capitalising on the low cost of its product, which like many subsidised mobile phones is sold with a two-year subscription.
Its basic Netboard will retail for about 316 Swedish crowns ($33) before sales tax with a two-year subscription of 79 crowns ($8.30) before tax per month, compared to $399 for a Web-enabled Palm VIIx or more than $500 for a Nokia or Ericsson Internet mobile phone.
The Netboard will be preconfigured to connect via a wire or infra-red beam to most GSM mobile phones, and to dial through Echoo's servers into the Internet. Later models will support third-generation mobile phones and Bluetooth wireless networking.
"Palm is selling a PDA (personal digital assistant) in a box. What we are selling is a PDA but that PDA is totally integrated with a server-based network for advanced data communications," Bartholdson said.
Echoo believes many consumers want a "two-box" solution to mobile communications: a compact mobile phone to carry all the time, and a compatible portable Internet access device that they can choose to leave at home when it is not needed.
"If you have a smart phone you will always be carrying around a brick," Bartholdson said, referring to the bulky design of Internet mobile phones.
He said Netboard had received 12,000 advance orders and planned to sell 50,000 to 80,000 units in Sweden this year, with a gross profit margin of 40 percent.
"The purpose will be to fund further expansion on new geographic markets," Bartholdson said. "We want to be in every GSM store in every single market in Europe." |
