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SignalSoft Knows Where It's At

Light Reading
LR Mobile News Analysis
Light Reading
10/20/2000

This week at the CTIA conference in Santa Clara the figurative SignalSoft Winnebago showed up to announce a partnership with Oracle. That same Winnebago was parked on Broadway between 16th and 17th last week with the red awning out and the barbecue spitting fat from hotdogs, visiting Unstrung on the eastern tip of their road trip.

Laying on burgers, a calm David Hose, SignalSoft’s CEO, began recounting the company's latest adventures, "We believe that the location of a mobile phone is a key enabler of mobile commerce opportunities." SignalSoft’s core technology is their GPS gateway, the Location Manager, and their location provisioning system, MAPS. The Location Manager gathers raw location data from wireless network operators and MAPS connects the location of a mobile unit with fixed location information (such as maps or positions of nearby post offices and banks). "I guess our premise is that it seems like the value proposition for mobile internet and mobile commerce is to provide you with very timely, personalized, localized information. [For example] the hotel by the airport that fits your profile has a room. Those are the interesting kinds of information through mobile commerce."

Beating the Oracle Partnership announcement by a day, SignalSoft also announced their expanded Local.info? Alliance on October 16th, which is designed to help even more wireless and Internet companies enable their m-Commerce services with location capability. Add to that, SignalSoft becoming the charter member of the Location Interoperability Forum, set up by Nokia, Motorola, and Ericsson to work on open standards for GPS systems, and the team in the Winnebago has had a busy month.

They’re Out There

SignalSoft’s closing day IPO price of $20-1/2n has risen to 36-1/2 due to the strength of their products and their prevalence in the wireless market. SignalSoft’s real genius is not waiting for a perfected GPS system, but building applications which can be used today and up graded as the GPS system improves. The current GPS system has problems pinpointing devices underground and in highly built up metropolitan areas. Also, the area is not specific enough for m-commerce’s direct marketing. "Those are the things that are coming. The mass market version is going to be coming in the U.S. in 2001, largely driven by the FCC’s mandate," says David Hose. "Our applications are all achievable today - they don’t need three G networks, they don’t take GPRS systems. They take current networks and maybe some service development."

Signal Soft uses its Location Manager and MAPS system to offer four applications: local.info for localized information, wireless 911 data, location sensitive billing, and BFound.com, a tracking system. The applications are currently used around the globe, from DIAX in Switzerland which offers local.info, to AAPT in Australia which allows the mobile customer to use location sensitive billing to compete with local phone markets in the house and office.

David Hose explains their strategy, "Market forecasters predict $12-20 billion in service revenues are going to be generated in the next couple of years. Five percent of that is going to come from safety and the rest is going to be pretty equally split across the other categories. Operators are pretty exited about information services because of WAP, but it’s only one third of all the opportunity, and operators are looking at holistic offerings. I think that is why SignalSoft is interesting to them, because we are the only company which has applications in each of their segments. So an operator can come looking for a safety application and move to other applications. Start with information and move to other applications."

In the last two months AT&T has upgraded location capabilities with SignalSoft, and Siemens AG has signed a contract with SignalSoft to enhance the value to of their WAP gateways with location. "SignalSoft's expertise in providing location-based services coupled with our market-leading Oracle9i Application Server Wireless Edition provides our customers with a strong platform to build new and innovative location-aware applications," says Thomas Kurian, vice president, E-Business, Oracle Corporation. "We expect this partnership to enable our customers to realize the full benefit that location-based services bring to the wireless Internet experience."

SignalSoft’s business model does not rely on name recognition, but partnerships with members of the wireless industry. "We imbed our technologies into the offering of very large providers who already sell to the wireless industry," David Hose tells Unstrung. "Our whole approach is to license our products through the Lucents, the Compaqs and the Motorolas, so that they can take our solution and bundle into things they are doing, and they can provide a complete solution to their customer base." Also included are Signal Soft’s distribution partners are GTE, SCC, and Telcordia Technologies. In America Sprint, USWest, BellSouth, Ameritech, AT&T, and Houston Cellular run SignalSoft applications, and internationally, AAPT and DIAX run SignalSoft applications.

For the six months ending in June, SignalSoft’s revenue totaled $4.8 million, up from $403 thousand. Net loss also rose 76% to $7.9 million, reflecting increased sales of licenses under reseller agreements and increased hiring, consulting and travel expenses.

May the Road Always Rise up to Meet the SignalSoft Winnebago

Unlike many wireless companies who are waiting for advances in technology, SignalSoft is out there. And they know where they are going. Dan Hose pulls a burger off the grill and utters with pride, "Our products are introduced today. This is from all over the world. We support all the technologies, TDMA, CDMA systems, GSM systems. We have all these different applications, and the message to people trying to understand more about SignalSoft is that we are not a one trick pony show."

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