Synchronica Crosses Pond

The already cheek-to-jowl market for enterprise mobile email in the United States has gotten even more jammed as London-based Synchronica plc , a supplier of open-standards email solutions to enterprises across the U.K. and Europe, said today it is extending its reseller network to the U.S. and Latin America.

Synchronica offers companies a "BlackBerry-like experience," says CEO Carsten Brinkschulte, at a far lower cost and on a broad range of "feature phones" that are less expensive than popular smartphones such as BlackBerry 's BlackBerry or the Treo line from Palm Inc. .

Synchronica's flagship SyncML Gateway works on standard mobile phones, Brinkschulte adds, so it doesn't require the purchase of a fleet of expensive BlackBerry devices.

"I think now we're seeing more and more companies not only interested in proprietary solutions, but in bringing a similar experience to more standardized phones, rather than having to buy specific devices," he explains. "So now you can enable your sales managers and support people to get these applications, including push email, that were previously reserved for the CXO level employees."

Providers from RIM to Good Technology Inc. to Microsoft Corp. (Nasdaq: MSFT) have long sought ways to drive the adoption of mobile email deeper into large and medium-sized enterprises, "beyond the executive suite" in industry parlance. It's thought that of the 650 million or so corporate email accounts in the world, only about 1 percent are accessible over mobile devices today.

Like many observers, Brinkschulte believes that as the overall market grows the dominance of RIM will inevitably recede. Research firm Strategy Analytics Inc. forecast in August that the installed base of mobile email users would double this year, and reported that RIM's market share in the first half of 2006 had dipped to 59 percent from almost 65 percent. The Strategy Analytics report forecasts that the average revenue per user for mobile email will be halved, from the $30-plus level of today, and that by 2009 15 percent of corporate inboxes will be "mobilized." (See RIM Dominance Slips, Slightly.)

Synchronica is entering the American market at a time of accelerating consolidation. Independent mobile email providers Intellisync and Good have both been acquired in the last year, by Nokia Corp. (NYSE: NOK) (in Nov. 2005) and Motorola Inc. (NYSE: MOT) (Nov. 2006) respectively. Many industry analysts expect the field to narrow in 2007 as startups Seven Networks Inc. and Visto Corp. seek to be acquired. (See Motorola Gets Good.)

In Brinkschulte's view, the mobile email market will coalesce into three silos or types of competitors that include: the device makers with proprietary solutions, a segment that now includes Nokia, Motorola, and Palm but is dominated by RIM; Microsoft, with its push email solution running over the Windows Mobile 5.0 operating system; and the open-standards providers, a niche that includes Synchronica, Funambol Inc. and not many others.

Synchronica's hope is that a big chunk of the 80 or 90 percent of mobile workers who use a conventional mobile phone will choose its solution, which does not require the addition of a software client but runs on the existing OS of the phone.

"We're not trying to replace BlackBerry or [Microsoft's] ActivSynch, but to address the rest of the devices in heterogeneous corporate environments," Brinkschulte says.

A public company listed on the London Stock Exchange, Synchronica was forced this week to reduce its earning forecasts for 2006 after revenue from a major contract deal was pushed back until early 2007. The company says it is at "an advanced stage" of talks to provide the SyncML Gateway under an OEM license to a major hardware manufacturer.

Synchronica shares have lost more than 50 percent of their value this year.

— Richard Martin, Senior Editor, Unstrung

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