Openwave sells browser biz to Purple Labs for $30M
As mobile software platforms shrink in number, so will browsers, and nowhere is the change in this sector highlighted so strongly as by the news that Openwave, the father of the mobile browser, is getting out of the market. The company is to sell its software business to Purple Labs for $30m, including its browsers, and will now focus only on network products.
The move is probably timely - embedded WAP browsers supported the first, shaky generation of the mobile internet, but now high end and midrange phones are moving quickly towards fully fledged browsers. This leaves little space for Openwave, which had not made the leap into the full browser, and would stand slim chance of doing so now, as the number of mobile browsers looks set to narrow down to five majors, or even fewer over time (one each for Symbian, Android and LiMO, plus mobile Internet Explorer and Apple Safari).
The newly open source Symbian Foundation is targeting a single browser, which could be bad news for Opera, previously the smartphone makers' favorite, if it does not get a pivotal place in the evolving, unified Symbian platform. John Forsyth, VP of strategy at Symbian, said: "One target browser covering most of the world's phones is a good thing" and a standard browser would be "critical" in the Foundation's next phase, helping to cut costs and make life simpler for developers. The current Nokia browser is built on the vendor's Series 60 Webkit, a port of the open source WebKit project for the S60 platform. This also contains core and components that Apple uses in its Safari browser, which is closely related to Nokia's product because of this, and because of joint R&D between the two phonemakers. However, Nokia has also been a heavy user of Opera, which may now face the challenge of finding new major customers elsewhere, possibly beyond the handset market.
So the market has moved on from Openwave, but the company, which was widely expected to be acquired last year but survived intact, says it now has a clear strategy for new growth markets. This focuses on network-based applications such as push email, and Openwave is targeting the cellcos' need to turn themselves into web services providers, able to deliver a wide range of internet services from their servers to any web-enabled client. Key products are advertising management and delivery platforms and the Openwave Rich Mail Solution, which allows the carrier to compete with Microsoft Exchange in push email and integrated communications, even incorporating video messaging and allowing the TV to be a messaging hub. It also provides 35 cellcos with its Smart Radio music platform, from its subsidiary Musiwave.
And it leapt fairly early into the operator requirement for personalization, with its Personalization and Profiling System (OPPS), which includes data collection, segmentation and profile generation and a subscriber profile that can be used by applications and recommendation engines in a network. OPPS lets operators customize a subscriber experience based on his or her previous activity, as well as individual demographic and subscription information, and includes a 'contextual merchandising' capability, to deliver targeted information from brands and agencies to mobile subscribers.
The sale of browsing and messaging products to Purple Labs prompted a rise of almost 5% in Openwave's stock, to $1.48, though the stock has taken a hammering lately and this is still near the low end of its 52-week range. The company is in a difficult transition phase, despite its high hopes for its network-based strategy. It is seeking a new CEO after its former CEO, and its CFO, quit earlier this year. Also, an employee charged in May that executives had "managed financial results" and the company delayed filing its latest quarterly results, bringing a delisting warning from the Nasdaq exchange. Openwave is investigating these charges.
France-based Purple Labs makes a Linux-based mobile operating system and is a member of the LiMO Foundation, but needs to enhance its offering at the higher levels as the industry looks set to focus on just a few Linux variants at the OS level. It is owned by a trio of European venture capitalists - Sofinnova Partners, Earlybird Venture Capital and Partners Group. IN addition to the purchase price, it will give Openwave warrants to purchase up to 2% of its stock. It will also pay an additional $2m if certain conditions are met.
Purple Labs could benefit from a closer association with Qualcomm and its Brew mobile content platform. Qualcomm and Openwave announced a joint development geared to 3G handsets in 2005 and in September 2006 they announced mobile browser integration for Brew. This centers on Openwave's device layer, which implements a standard set of APIs that integrate the Openwave Mobile Browser, Mercury Edition, for Brew.
