AETH in wireless data services and wireless carriers are under great pressure. It may survive 2002 but I'll buy it at $1-$2.
Wireless Network Carriers
We believe our relationships with wireless network carriers are mutually beneficial. We believe we are among the largest buyers of wireless data network capacity for many of the carriers we use. As a result, we are able to negotiate favorable rates. Typically, we have one-year contracts to buy data network capacity either for an agreed amount of kilobytes at a flat fee or on a cents-per-kilobyte basis. We have contracts with wireless carriers including Verizon Wireless, AT&T Wireless, Cingular Wireless, and Motient. As a result, we can give our customers a wide variety of wireless carrier choices.
Hardware and Software Vendors
Our services increase the usefulness of wireless handheld devices, and we believe our solutions will increase sales of these devices. We have therefore entered into a number of arrangements with mobile device manufacturers, including the following:
- In February, 2001, we announced a strategic partnership with Symbol Technologies, Inc., to offer our wireless data systems and services with Symbol handheld devices.
- In December 2001, we entered a partnership with Sharp to develop a wireless e-mail solution based on Aether Fusion for the new Sharp Zaurus device. The device will carry the "Unwired by Aether" branding. The initial phase of deployment will provide an ISP (POP3 and IMAP formats) e-mail service targeted to what Sharp terms the "pro-sumer". This service is expected to be launched in the first half of 2002. The second phase of deployment is an Aether developed wireless e-mail solution for the corporate user with more stringent security (Microsoft Exchange and Lotus Notes back-ends). We are providing all the wireless integration for both today's and tomorrow's networks.
- In April 2000, we entered into a strategic agreement with Research in Motion (RIM) to market and sell RIM wireless devices.
COMPETITION
The market for our solutions is competitive. We believe we offer the broadest range of applications and services to businesses necessary to enable the development, offering and ongoing support of wireless data communication systems for their employees and customers. The widespread adoption of industry standards may make it easier for new market entrants to offer some or all of the services we offer and may make it easier for existing competitors to introduce some or all of the applications and services they do not now provide, or improve the quality of their services. We expect that we will compete primarily on the basis of the functionality, breadth, quality and price of our services. Our current and potential competitors include:
- wireless systems integrators and database vendors, including IBM, Oracle, and EDS.
6
- mobile and/or wireless software companies, including Openwave Systems, Comverse Technology, Inc., AvantGo, Inc., Extended Systems, Inc., and Puma Technology, Inc., Everypath, Inc., and Brience, Inc.
- wireless data services providers, such as 724 Solutions Inc. and GoAmerica, Inc.
- wireless network carriers, such as Verizon Wireless, AT&T Wireless, Cingular Wireless, Sprint PCS Group, and Nextel Communications, Inc.
Some of our existing and potential competitors have substantially greater financial, technical, marketing and distribution resources than we do. In the category of wireless network carriers, some of these companies may also sell us airtime for our solutions. Additionally, many of these companies have greater name recognition and more established relationships with our target customers. Furthermore, these competitors may be able to adopt more aggressive pricing policies and offer customers more attractive terms than we can.
Notwithstanding the competitiveness of our market, we believe that our potential competitors face substantial barriers to market entry. Development of wireless data systems comparable to those we have already developed is time consuming and costly. |
