Synchronica raises stakes in push email market

Synchronica set to enter push email handset market after signing preliminary agreement with unnamed device manufacturers

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Synchronica raises stakes in push email market Brinkschulte is hopeful that emerging markets will provide strong growth for push email.
By  Roger Field Published  June 15, 2009

Synchronica, a UK based company specialising in push email software, is planning to launch low cost email-enabled handsets after signing a collaborative agreement with unnamed third parties.

Synchronica, which is targeting the Middle East and Africa among other developing markets, said it had signed an agreement with third parties to design, build, market and sell “low cost mobile devices”.

The devices will be bundled with the company’s Mobile Gateway product – a software platform that enables entry-level handsets to send and receive emails.

Under the deal, Synchronica will receive a commission of 3% of the net sales revenue from the sales of the devices, in addition to licence fees, professional services, support and hosting revenues from Mobile Gateway.

Synchronica, which is listed on the Alternative Investment Market of the London Stock Exchange, intends to fund the arrangement by raising some GBP4.7 million ($7.6 million) through a placing of new ordinary shares.

Carsten Brinkschulte, CEO, Synchronica, said he expected the collaboration to enhance the company's prospects. “It will allow the company to complement its mobile email and synchronisation product with a device-centric end-to-end solution, at a time when the company believes mobile email as a tool for mass market communication is expected to grow significantly," he said in a statement.

The development followed closely from an announcement last week that Synchronica had launched a new version of its Mobile Gateway product aimed at enterprises.

Brinkschulte told CommsMEA that the company decided to launch the product after receiving enquiries from businesses including a bank in India, which has already ordered the product for 10,000 staff.

Brinkschulte added that the Middle East and Africa would be a particular target area for the enterprise product. “The Middle East and Africa is one of our hottest regions at the moment. It will still take a while until we have been able to cover most of the regions with the carrier installation and in the meantime we will have a solution available for these SMEs or larger enterprises that would like to be able to give mobile email to end users, but using existing phones rather than upgrading them,” he said.

While Synchronica’s share price retreated on Friday in response to news of the new fundraising, Brinkschulte was buoyed by recent data indicating a potentially ripe market for value added services such as push email for 2G devices.

Between 2009 and 2014, annual sales of low-cost mobile handsets will rise by 22% to over 700 million, according to a recent report from UK based Juniper Research. Meanwhile, US consultancy In-Stat pointed out that only 11% of total cellular subscriptions worldwide are 3G.

“Research suggests it will take until 2013 before a quarter of the devices shipping to market will be smartphones,” Brinkschulte added.

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