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LBS Authors: Liz McMillan, RealWire News Distribution, Kevin Benedict, Shelly Palmer

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LBS: Article

Mobile 'Mergermania' to Drive Mobile Data Adoption?

Mobile 'Mergermania' to Drive Mobile Data Adoption?

(June 12, 2002) - With Openwave Systems, Inc., on a recent buying binge in which it snapped up SignalSoft for $59 million and acquired mobile data downloading technology from Ellipsus Systems for over $17 million, and with Extended Systems acquiring mobile data vendor ViaFone for $11.4 million, it would seem that the mobile data world is due for a (much-needed) renaissance of activity.

In buying SignalSoft, Openwave clearly hopes to expand its line of wireless data services, and the Ellipsus deal will ensure that these services include the delivery of J2ME-enabled apps like games and other multimedia content.

The location-based service developed by Boulder, Colorado-based SignalSoft allows wireless consumers to receive such information as the location of the nearest ATM or movie theater. So this will nicely complement Openwave's existing mobile IM and Web browsing software, and the beauty of the deal is that SignalSoft's LBS offering can now be offered immediately to the existing Openwave customers - including no fewer than 80 wireless carriers.

Since SignalSoft has $45 million in cash on hand, $59 million seems a pretty decent price from Openwave's point of view. On the other hand since SignalSoft's losses for the first two quarters are likely to be $14 million on revenues of just $8.4 million, it isn't too bad a deal for SignalSoft either. Openwave will be hoping that, for once, a wireless consulting firm has gotten its math right: Ovum estimated recently that there will be 385 million location-based users worldwide by 2006, generating nearly $11 billion in revenues.

As for the Ellipsus purchase, that too is premised on the assumption that enterprise and consumer customers alike will soon be demanding that wireless operators offer voicemail, e-mail, a Web browser, Java-based downloadable applications, location-based services, messaging, and multimedia. "We believe that Java is a key enabler of rich application services that will drive mobile data services going forward," Michel Quazza, vice president of product management for Openwave, told WBT.

There are now a great many companies, Openwave included, whose combined mobile data activities analysts are hoping might yet succeed in kick-starting the next wave of wireless growth and technology expansion.

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WBT News Desk brings you all the latest and greatest news from the world of wireless business and technology, including breaking news, technical articles and feature stories written by the world's leading experts of mBusiness.

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