Synchrologic, a developer of mobile infrastructure solutions, such as document, Web-site delivery and enterprise e-mail applications, recently released a statement glorifying a Gartner report that labeled the company as “visionary.”
But at least one analyst says the “visionary” label is a bit exaggerated.
Isaac Ro, an analyst with Boston-based Aberdeen Group, says the company should…at the most…be lauded for its stamina during an otherwise plunging high-tech market, especially being that Atlanta-based Synchrologic is focused on telecom.
“I think they are a unique company in that they are focused on developing applications for the pocket PC market, and there is a bright future for companies focused on delivering enterprise e-mail applications,” Ro says. “But there are many, many other companies out there making the same play as Synchrologic.”
The Gartner report, called the “Magic Quadrant,” projects that by the end of 2007, the number of enterprise users using wireless e-mail applications and services will grow from 1 percent to at least 10 percent.
“E-mail is the communication medium of choice for most businesses, and is usually the first application to be mobilized by an enterprise,” says Kimberly Hiller, one of the authors of the Gartner report. “Today, many high-level executives have real-time access to their e-mail, contacts, calendars and tasks, which is what makes a company offering products and services like Synchrologic so valuable.”
Gartner refers to the enterprise e-mail market as the “Magic Quadrant.” Currently there are no companies leading the charge in generating revenues and standardizing one application from enterprise customers. Both IBM and Microsoft are challenging established companies in this market, but they have been slow to develop products, the report says.
The report adds that e-mail tends to be the first application used by hand-held Internet users. Mobile platforms that facilitate the delivery of e-mail messages, it says, will become increasingly important and valuable as more people and businesses embrace the use of personal digital assistants, and other Internet-ready portable devices.
Local companies tapping into global market
The trend in increased wireless usage is a global one, and one study published by the United Nation Information and Communication Technologies Task Force finds that the number of people per 1,000 using mobile phones in several nations has boomed since 1995. Luxembourg leads all counties with 861 out of every 1,000 adults owning a cell phone, followed by Hong Kong (809), Norway (751) and Italy (737).
The use of PDAs is, likewise, poised to experience exponential growth. A report by Jupiter Research predicts that 35 million business and mainstream consumers will own PDAs by 2006. And another study, this one compiled also published by Gartner, projects that 15.5 million PDAs will be shipped by the end of this year, and that the U.S. market for these products will grow to $17 billion by 2007.
But developing software applications that manage enterprise information distributed via company intranet to laptops, personal digital assistants and handsets is not the only emerging market in wireless applications, and at least three Triangle companies are hedging their futures on this segment.
Morrisville-based Avesair develops mobile marketing technologies and services for wireless operators and content providers. For instance, say a cell phone user is driving by a Starbucks coffee store. Wireless users can opt-in to a program with their service provider that would allow them to receive information about promotional offers, or even a coupon for retail products.
Cary-based Pinpoint, whose customers include Verizon Wireless and O2, provides applications that allow mobile operators to provide content to their subscribers. Raleigh-based Summus employs a similar technology but it is aimed at delivering content to low-bandwidth mobile devices, mainly those limited to 2G and 2.5G networks. But these companies are facing an uphill battle in trying to convince consumers that targeted marketing messages differ from Spam, Kong acknowledges.
It’s a question of who’s more right?
But a study released by the HPI Research Group, and others like it, finds that 88 percent of mobile device users are open to the idea of receiving targeted SMS sales messages on their portable devices. Aberdeen analyst Ro, however, doesn’t believe in the market’s potential.
“I don’t see there being any future in that market,” Ro says. “It’s a 1999 market to be chasing right now. The real potential for growth lies in the enterprise solutions segment, and in companies like Synchrologic.”
Kimo Kong, Avesair founder and executive vice president, says that assertion underestimates the variety of uses inherent in mobile devices.
“Enterprise applications are a market driver, there’s no question about that, but there is a large segment of mobile users that don’t use their cell phones or PDAs for work-related situations,” Kong says. “Jupiter Research put out a study saying that mobile marketing is anticipated to grow into a $500 million industry by 2006. E-mail is a popular wireless application, and there’s no doubt about that, but we’re on the beginning cusp of a very large market in targeted messaging.”
Reports from several sources show that, in the consumer market, Kong may be right. Mediamark Research reports the number of U.S. households with at least three cellular phones increased 95 percent from spring 2001 to spring 2002. Another report by Solomon-Wolff Associates predicts the “average wireless household” may have two or more hand-held devices by July 2003. And yet another report, this one issued by Scarborough Research, finds that 62 percent of all American adults now own a cell phone.
Interestingly, the highest concentration of cell phone ownership occurs in cities typically known for their warm climates. The nation’s second most saturated market is Atlanta, according to the Scarborough study, with 73 percent of all adults owning cell phones, followed by Honolulu (70 percent), Miami (69 percent) and Dallas (69 percent). Houston leads the category at 74 percent.
The cities with the lowest rate of cell phone ownership are Roanoke, VA (49 percent), Albany (49 percent), Wilkes-Barre, PA (46 percent), Buffalo (45 percent) and Charleston, WV (39 percent), according to the report.