Everyone's mate

Jim Morrison, founder of i-mate, has taken his company from nowhere four years ago to the brink of a US$800 million flotation. He tells Anil Bhoyrul how.

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By  Anil Bhoyrul Published  February 13, 2005

Everyone's mate|~|Phone-King-200.jpg|~|PHONE KING: Morrison says his company has taken a 60% share of the intelligent devices market in the Middle East.|~|Jim Morrison, founder of i-mate, has taken his company from nowhere four years ago to the brink of a US$800 million flotation. He tells Anil Bhoyrul how. A STRANGE incident occurs at the end of the interview with Jim Morrison. As we are leaving his office, he says: “You want to know if I am a good leader? Ask any of my staff and they will tell you.” Moments later, his secretary Liz Benade appears: “Oh yes, Jim’s a great leader.” She is followed by general manager of content, Mike Cavey. “Yes, Jim’s a visionary.” His marketing guru Nadine Salem interrupts us. “You haven’t asked me that question. I can tell you he is a great leader. And this is a great company, and full of great people.” Ironically, i-mate founder Morrison doesn’t need his staff to do a sales pitch. Up to a million customers around the world are doing that for him, as the global i-mate fever reaches new heights. The “intelligent devices” which combine mobile phones, email, internet and other 21st century essentials are selling like hotcakes. i-mate says it has a near 60% share of the current one million units a year sold in the Gulf, bringing in revenues of around US$180 million a year. With analysts estimating profits at between US$20 million and US$40 million, the company is set for a stock market valuation that will value holding company Carrier Devices at up to US$800 million. The i-mate craze has crossed into Europe, in Italy, Belgium, the UK and Spain, and next month will hit the US market. Not bad for a 41-year-old Scot who gave us the first ever i-mate at Gitex in late 2002. “In the business market, if you’re not carrying an i-mate you’re not a businessman,” says Morrison. He adds: “At Gitex you sometimes get a buzz about your product. I got a buzz. I knew this could be something really big. And then this year we went from selling two handsets to multiple handsets, and I thought, yes, this is really going to be big. The proof we are successful is whenever I get on a plane and the air stewardess asks me what I do, and I say I run i-mate, she knows the name of the company.” What the air stewardess probably doesn’t know is that Morrison has set up a business model smarter than even his latest i-mate Jam device. Around the world, he employs just 94 people directly, none of them in direct sales. At the global headquarters in Dubai, there are just 50 staff. The phones are built and packaged in Taiwan before being shipping worldwide for distribution, after being “localised” at the point of sale. It means the actual running costs are remarkably low (even though the manufacturing expenses, given the complexity of the devices, are relatively high). Morrison says: “When it comes to competition there is no-one else who can do what we do. People look for cost, fashion and commitment when buying devices, and we have all three. But don’t get me wrong, our profit margin is not ridiculously high. And I think excess profits are bad because that means you are doing your customers a disservice.” Whilst the indications are that i-mate has a 60% and growing market share, there is no slowdown in the competition. The PDA market is being saturated with new products, while device makers such as Nokia have been joined by new entrants such as Samsung. If many businessmen have i-mates, even more want to make them. Again, Morrison says he is not concerned. “Nokia have got problems. Any company that is world leader with a huge market share has problems because if it gets a single thing wrong everyone notices.” He is correct, Nokia does have problems in the sense that fourth quarter operating profits fell 19% to just under US$2 billion. But the fall is largely because of over saturation in some markets. However, Nokia mobile device volumes reached a record 66.1 million units, up 19%, resulting in an estimated market share of 34%. The real battle is between Nokia’s Symbian software and the Microsoft software used by i-mate. A spokesman for Nokia said it “wouldn’t comment” on claims made by competitors. However, on its website it says that when it comes to smartphones, consumers have a choice between several different smartphone platforms: Symbian OS, Windows Mobile and Palm OS are the top three. Nokia uses the Symbian OS for all smartphones models. The Symbian OS is the market leader in open operating systems for smart phones with 83% market share globally in the second quarter of 2004, according to research by Canalys. One thing for certain is that the Morrison story has some way to go yet. Born in Dumbarton. Scotland, he studied Marine Electronics at Glasgow University, and was headhunted by telecoms giant Cable & Wireless. At the age of 20, he received a substantial income through inheritance. Though he won’t say how much, it is thought to have been several million dollars, paid in stages through a trust fund with a clause that he had to carry on working until the age of 32. “I wasn’t short of cash. In fact, I was a very rich man, and I effectively retired at the age of 32. I didn’t have to ever work again if I didn't want to. And I still don’t have to ever work again,” he says. Morrison, after a spell laying under sea cables, eventually ended up at another telecoms giant, British Telecom, where he ran a think tank for the group as it explored the mobile devices market. He went to the board of directors suggesting the company ties itself to either the Symbian or Microsoft technology and adapts it to mobile devices, and helped designed the XDA phone along the way. Unfortunately for Morrison, most of the group’s cash went on securing new 3G phones licences. Its mobile operations were rolled into the smaller O2 operation. “It just couldn’t work with the stuff I was going. In the meantime BT gave the worldwide rights to intelligent devices to HTC. I said to HTC, ‘you have been shafted by BT.’ I gave them my word that I would set up a company to help sell the devices they had the rights to manufacture the devices. I didn’t need to do it. It cost a lot of money in fact, but I think loyalty is very important. I gave them my word, and I always keep my word,” he explains. His “word” led to the creation of Carrier Devices in 2001. Of the five strong team that went to O2 with Morrison, four followed him to the new company. Morrison had already been researching the potential for launching in the Middle East as part of a separate project for British Telecom, and decided the time and place was right to set up his global headquarters in Dubai. Over the next year, the first I-mate smar tphone was manufactured in Taiwan and packaged in Dubai, before going on sale. Over the next three years came more launches: the Sp3, Sp3i, and the JAM phone. The I-mate brand is now stronger than ever. As a company, success has come quickly, but any flotation will be used to fund overseas expansion, particularly in the US. All of which leads to the obvious question: what else is there for Morrison to do? Make more money? “Money doesn’t bring happiness, but it sure helps,” he says, adding: “I don’t actually go after material things, even though I could. Okay, I like to wear nice suits, but I don’t have a boat or a plane. I'd feel powerful, and I don’t have an ego.” He professes to have “no heroes” in business, pointing out that he admires Microsoft founder Bill Gates for the way he has given away millions of his cash to charity. Surely he must credit Gates with more than that? “Well, what he did with Microsoft was great, but they were lucky.” Is he joking? “No. Microsoft were lucky. What Gates does that I admire is how much of his own money he gives away. I’ve given money away. And I will give more away, but I’ll never talk about it again because you will think I’m being flash and want publicity. Anyway, money is money and nothing else.” Though he won’t admit it, you get the impression Morrison would love nothing better than to build an empire even a tenth the size of Gates. If the current rate of growth continues, then in the next five years, he may well achieve that.||**||

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