they could do without the politics and religion over there.
found this article on phone.com. do you see this as an area for microsoft?
regards
PHONE.COM - THE WIRELESS INTERNET COMPANY
By Michael Barrett
I do not pretend to know everything, and many
times I am just plain
clueless. For example, last June, some hip
company named Phone.com went
public. I was fed up with useless dot com
offerings and I paid them no
attention. "Phone.com", I thought to myself,
"what could they do? Offer
Internet phone services? I don't need them!"
Soon thereafter, Phone.com
was trading at over $300 per share, and I finally
decided to see what all
the commotion was about. Needless to say, after
some investigation, I
felt just a tad silly.
Phone.com is not a phone company. What they are
is a software company,
and their software allows you to access the
Internet through your mobile
phone or handheld Palm computer. They make both
the browser, which is
installed on your phone, and the server software
that your cellular
provider uses to get you to the Internet. The
development platform used
is called WAP (Wireless Application Protocol) and
was developed to be a
standard by a wireless conglomerate consisting of
Phone.com, Motorola,
Nokia, and Ericcson.
After realizing what I had missed, I still had
questions. Seriously, what
good is a 2-inch, minimum resolution screen for
cruising the net? What
exactly will users be able to do? How will they
make money? What is the
purpose? I was very skeptical and somewhat
closed minded. Just then it
struck me that my concerns were irrelevant. What
is important is that
wireless Internet access is a reality, and
Phone.com is a leader in that
revolution. The technology was only going to
improve, and the uses -- as
I found out -- are increasing in number every
day. I further recognized
that I found a business in its infancy, and it
would be wise to learn as
much about it as possible.
What's to like:
-- Solid Business Plan. Phone.com is a key
player in the WAP forum, and
they give their browser away. By giving it away
for free, it encourages
providers and developers to use it. That
technique is what allowed
Microsoft to win the browser war. Phone.com then
licenses the server
software to the wireless provider (Bell Atlantic,
Airtouch, GTE, etc.),
and they even collect fees from $10 to $15 from
every user who decides to
use the service.
-- Standardized Platform. Getting a grip on
wireless standards is tough,
but it doesn't matter what system a provider uses
because Phone.com's
software will run on all of them. CDMA, TDMA,
GSM -- any of them. It
also will work on any data-capable handset,
including Palm devices and
certain pagers.
-- Market Penetration. Wireless access is so new
that many providers
(like mine) do not even offer it yet. Still,
Phone.com has access to
nearly half of the world's wireless users. They
are not only the beasts
of their sector with a great first-mover
advantage, but their lead over
the competition seems to be increasing daily.
Their most recent victory
was a deal with British Telecom. Amazingly, the
US is behind the curve a
bit with regards to wireless access. Phone.com
has deals with AT&T,
Nextel, Sprint, Bell Atlantic, and US West, but
there are dozens more
providers that do not yet offer these services.
The US has several large
contracts up for grabs and given Phone.com's
success so far, it would not
be a stretch to assume they will win a good
portion of them.
-- Strategic Investments. Phone.com has made a
few strategic purchases
to strengthen their position. First, they bought
@Motion, a voice
recognition company. Integrating voice features
into a mail client or web
browser is a natural progression, and this move
brings that intricate
development effort completely in house. Then
they went after Paragon, a
company that specialized in synchronization
technology that allowed mobile
users to link up to Microsoft Outlook, Lotus
Notes, and other sources.
They could then download e-mail, contact lists,
or other items using
FoneSync, Paragon's main software product.
Finally, they gobbled up
privately held Onebox.com, a leading
communications application service
provider with 2.5 million registered users
worldwide utilizing unified
email, voicemail, fax, and wireless-enabled
communication applications.
-- Growth. In the past quarter, subscriber
growth quadrupled to over
700,000 around the world. Last week, it was
announced that they had over
1 million subscribers in Japan alone! With new
deals being made
constantly, analysts are having a difficult time
creating revenue models
since they are always increasing. Banc of
America Securities claims that
in 2002 there will be three times as many
wireless Internet users than
were Internet users in 1999 alone. This sector
is just getting started,
and Phone.com is right in the middle of it.
What's not to like:
-- Limited Use. Sure, you can link into e-mail,
but you cannot handle
attachments or reply in detail. Getting the
weather is good if you need
it, but that won't keep them coming back. Online
trading is available,
but you won't have access to charts or other
advanced features. Speed is
also an issue, as most Sprint users will attest
to. The networks are not
yet up to snuff there. Services are expanding
and speed is expected to
increase, but overall, wireless access is still
the equivalent of the 9600
bps AOL Internet experience.
-- Competition. The boys in Redmond will not go
down without a fight,
will they? Microsoft continues to make noise
about the wireless game, and
they even have a joint venture with Qualcomm that
is aimed at taking some
market share from Phone.com. Handset makers like
Nokia and Ericsson could
be a threat, as are wireless network operators.
Phone.com may have a huge
lead but, in order to maintain it, they must
continue to execute and
innovate in a fast paced, ever-changing industry.
All in all, Phone.com will have obstacles, but
the market penetration that
they have already achieved should continue to pay
dividends. Their
numbers speak for themselves as to the growth
potential of wireless
Internet access, and I doubt they are done making
deals at this point.
Institutional interest has been picking up and
the company has emerged
from a 38 million share lockup expiration totally
unscathed. Phone.com is
part of The Bull Market Wireless Portfolio.
Phone.com (PHCM, $170, down 9)
Shares Outstanding/Float: 69/45 million
Market Cap: $11.7 billion
Mike Barrett
Mfbarrett@mail.com
Mike Barrett owns a technical consulting firm
specializing in financial
applications development, and he trades his own
account. At the time of
this writing, he was long PHCM. This article is
not to be construed as a
recommendation to buy or sell any of the
companies mentioned.
(C) Copyright 2000 The Wireless Investor and The
Bull Market Report, LLC.
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