As Mobile Web Startups Proliferate Making Money Is Still Elusive

July 16, 2009

A new wave of mobile startup is creatively reshaping the way people will think of and use their mobile phones in coming years.

Before long today’s pocket-sized communicator will become a credit card, a photo store, as well as a user’s primary source of information from the Web.

Micro transactions are promising, says Tapulous Andrew Lacy

Micro transactions are promising, says Tapulous' Andrew Lacy

But this vibrant incubation of new applications is missing one key ingredient: a straightforward way of turning turn technical innovation and site development into revenue.

The proliferation of smart phones, such as Apple’s iPhone, the latest Blackberries and the Palm Pre, is enabling this transformation – opening the door to more complex applications and pushing data in steady streams to mobile users.

The dramatic shift is still several years away. But several early innovators were on display at the MobileBeat 2009 conference Thursday in San Francisco.

One startup, AppStore HQ, wants to create an easier way to locate useful iPhone apps. With tens of thousands of applications available, “it’s easier to get your applications found than get a camel through the eye of a needle,” says exec Chris De Bore.

The company is starting with the iPhone and hope to expand to apps for Google’s Android and the Blackberry.

Boku has already begun turning the phone into a payment device and now boasts operations in 50 countries. Urban Airship plans an alternative way to push data to cell phones and is even working on push alerts for RSS feeds – a potentially huge market. (Apple and other phone developers have begun offering their own push technology for phone data.)

Another promising startup – Touchnote – is rooted in the real world. It wants to make money by turning cell phone photos into postcards it mails to recipients.

But making money is no guarantee. Opentable has been able to use its iPhone application to deliver dinners to local restaurants, for which it gets a fee.

But Flixster’s hope of selling movie ads into its movie location app is a work in progress. The evolution of the phone payment system is also creating confusion.

Payment restrictions make it hard to know whether to charge for a game application and make money with virtual products or to charge for the game itself, says Andrew Lacy of Tapulous.

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Posted by Mark Boslet

Texas Instruments, Sony, Samsung And Qualcomm Score With Palm Pre

June 11, 2009

Several of high-tech’s largest players are hoping the new Palm Pre will be a raving success.

Surprising design choices give Palm Pre a potential market advantage

Surprising design choices give Palm Pre a potential market advantage

These firms – Texas Instruments, Sony, Samsung, Qualcomm, Elpida and Cypress Semiconductor – are major suppliers of components to the new smart phone, according to a teardown of the product.

The dissection by iSuppli uncovered a number of surprising design choices that offer the Pre a potential advantage over Apple’s iPhone – as well as higher costs.

For instance, the Pre uses an advanced polysilicon LCD display from Sony that produces higher resolution and faster response times than conventional LCDs. But the screen comes with a higher price: $21, as estimated by iSuppli.

The phone also uses 2 gigabits of SDRAM memory capacity, twice as much as the iPhone 3G. Suppliers of the chips include Elpida, the market’s number two SDRAM manufacturer.

Also in the Palm Pre is a premium choice of flash memory from Samsung, though Palm could use other suppliers as well. The eMMC MoviNAND flash from Samsung offers higher performance. It also costs more: about $17 a phone.

ISuppli’s teardown found a baseband processor from Qualcomm, an applications processor from Texas Instruments and a touch-screen controller from Cypress Semiconductor.

All will be routing for the phone’s success.

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Posted by Mark Boslet

Palm Needs More Money

March 3, 2009

Troubled times for the former leader of the smart-phone industry continue.

Palm’s new Pre receives accolades, but isn’t scheduled to ship until closer to June (the official target is the first half of the year).

Palm Pre to reach the market by June, but current smart phone sales are slumping

In anticipation, the company’s present smart phones are tanking and the stopgap Treo Pro is late. That means Palm is burning money to stay alive: between $95 million and $100 million in the third quarter ended Feb. 27.

That will leave it will between $215 million and $220 million in the bank, not enough of a cushion to satisfy management.

On Tuesday, Palm said it would raise more money to conduct the Pre launch and weather the downturn. It also said third-quarter sales were roughly three-fifths of what they were expected to be: between $85 million and $90 million compared with the $157.8 million Wall Street had projected.

In this environment, the options aren’t plentiful. Here’s the plan: to exercise some of the shares underlying the Series C preferred stock owned by Elevation Partners.
In other words: convert up to 49 percent the Series C convertible preferred warrants Elevation received for a $100 million investment into common stock and sell them on the market. If they sold at $7, Palm would raise $67.5 million. (Thanks to Barron’s Tech Trader Daily for the details.)

“As expected, we’ve got a difficult transition period to work through,” said Palm CEO Ed Colligan.

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Posted by Mark Boslet

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