Page 1082 – Mobile Europe

RadiSys acquires Continuous Computing for $105 million

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4 May 2011

Targets “high value” Trillium and ATCA products

RadiSys has said it is ready to buy Continuous Computing in a move designed to accelerate its move into the LTE, deep packet inspection and femtocell markets. The company will pay $105 million, with $73 million of that in cash, for Continuous Computing, with up to an an extra $18 million due in earn out payments over the three years following the acquisition. The transaction is expected to close by the end of July 2011.

A statement from RadiSys said that its board believes the acquisition of Continuous Computing has a number of “compelling strategic benefits”. The acquisition would “drive further expansion into the high growth LTE, Femto / Small Cell Wireless and DPI markets with [Continuous Computing’s] high performance ATCA platforms and Trillium software.”

Following the acquisition, Mike Dagenais, Continuous Computing President and CEO, will become RadiSys’ Chief Executive Officer. Brian Bronson, current Chief Financial Officer of RadiSys will become RadiSys’ President and Chief Financial Officer. Scott Grout, current President and Chief Executive Officer of RadiSys will become Vice Chair of the RadiSys Board of Directors.

Continuous Computing’s revenues were $56.6 million in 2010 and grew over 25% from 2009 with gross margins of approximately 50% in 2010. RadiSys has just reported Q1 revenues for 2011 of $73.6 Million, up 9.4% on Q1 2010.

A Continuous Computing spokesperson said, “We are excited about this transaction and believe the acquisition by RadiSys will broaden the company’s solutions portfolio and accelerate our expansion into high-growth communications areas. In addition, the acquisition will bring benefits to our end customers through a broader set of technologies and solutions delivered by a combined team with greater overall scale and breadth.”

16 Million Mobile LTE Subscribers by Year’s End

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3 May 2011

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LTE is starting to gain critical momentum as we move through 2Q-2011. Currently 12 countries have commercial LTE services, and according to ABI Research VP of Forecasting Jake Saunders, “ABI Research projects that by the end of the year there will be some 16 million subscribers using LTE mobile devices.”

A wide range of business models underpin LTE services. In Germany, T-Mobile’s LTE service, called “Call & Surf Via Funk,” is priced at $53/month in districts where xDSL fixed-broadband services are limited. The end-user is entitled to a fixed telephony line and an LTE connection, using a Huawei-manufactured wireless router offering download speeds of up to 3 Mbps.

NTT DoCoMo’s LTE service, branded “Xi” (and pronounced “Crossy”) allows customers to enjoy high broadband speeds in the Tokyo, Nagoya and Osaka areas. Population coverage stands at 7% through the coverage of 1,000 base stations. NTT DoCoMo aims to attain 70% coverage relying on 35,000 base stations by 2014. Monthly tariffs will run between $12 and $79.

Even at this early stage LTE is not only being deployed in mature markets but also in emerging markets. TeliaSonera has begun rolling out coverage in Uzbekistan. Uzbek operator UCell was awarded a 4G license in July 2010, and ZTE helped the operator to roll out 4G LTE coverage to its 5.4 million subscribers. Monthly fees start at $50 per month.

A key success factor for LTE will be LTE smartphones. “The shift to 4G differs from the shift to 3G because of smartphones’ capabilities,” says research director Phil Solis. “In the US, people are actively looking for 4G as a handset feature, spurred by heavy marketing of 4G smartphones. Sprint’s success with WiMAX smartphones is an indicator of the scale Verizon Wireless and AT&T can achieve with LTE smartphones this year.”

In March 2011, the Global mobile Suppliers Association reported there were 100 LTE-ready devices. Only 13% were smartphones and media tablets, but these devices will see higher volumes. In 2014, more than 205 million LTE mobile devices will ship, 72% of which will be handsets.

For more information, visit ABI Research’s “4G Subscriber, Device, and Networks Market Data” which contains regional and selected country-level segmentation for the 4G market.

O2 Media signs The Co-operative for location-based marketing

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3 May 2011

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O2 Media today announced that The Co-operative Group has signed up to its You are Here location-based marketing service, becoming one of the first major UK supermarket chains to take advantage of mobile proximity marketing.

Between 4 May and 11 June, O2 customers within 0.5 miles of a Co-operative Food store will receive a text message offering them a free 500ml bottle of Dr Pepper. All customers will have opted in to O2 More, one of the industry’s largest permission-based marketing schemes with over 2 million members.

Unlike other location-based services which require customers to log-in to retrieve deals and offers, O2’s You are Here service drives value and consideration for brands by pushing messages to target, opted-in customers in specific areas. It is also completely handset agnostic meaning that any customer can benefit from the offer regardless of whether or not they have a smartphone.

You are Here uses ‘geo-fences’ which are set up around a particular location, in this case a Co-operative food store. As soon as a target customer enters the area marked by the ‘geo fence’ they automatically receive a SMS or MMS with the offer. They then simply show the message at the till in the nearest store to redeem the deal.

“People have been talking about location based targeting for years,” said Shaun Gregory, Managing Director of O2 Media. “We’ve pioneered the capability, delivering a seamless solution across all handsets to opted-in customers who are active participants of our services. You are Here is truly unique, primarily because it drives consideration and incremental value in a market where most ‘browsing based’ solutions actually erode sales and essentially deliver offers to customers who have already made a purchase decision.”

“Most major retailers in the UK are using You are Here and leveraging what location based solutions can deliver. It’s a whole new ball game for marketers as they start to realise that they can talk to customers when they are moments away from their stores. It’s not just about effectiveness and ROI, it’s also about the fact that brands need to be more relevant in such a cluttered world. Mobile delivers that, and it also makes other forms of media work harder. It’s changing the game.”

Sean Toal, Commercial Director for The Co-operative Food, commented: “The Co-operative is keen to make use of cutting-edge technologies, and mobile proximity marketing means we can target customers with specific offers and engage with them directly.

“The Co-operative has almost 3,000 stores nationwide, many of which are at the heart of local communities and on high streets, which makes this initiative and technology ideal for us as a community retailer.”