Phone.com Inc. added to its mounting momentum last week by signing a definitive agreement to buy the Wireless Application Protocol products and operations of infrastructure software company APiON Ltd. of Belfast, Northern Ireland.
According to the agreement, APiON shareholders will get 1.3 million shares of Phone.com stock, valued at about $239 million as of Oct. 8. Closing is expected by the end of the month.
Originally formed as a consulting service, about three-fourths of APiON’s operations now are WAP related. APiON’s non-WAP services are not included in the sale. The company created and markets a WAP gateway product and claims some 10 European Global System for Mobile communications carriers as customers, including Sonera and Swisscom. It also has several other wireless data applications.
According to Ben Linder, vice president of marketing at Phone.com, the deal provides Phone.com an entry point for selling its WAP products to the GSM carriers in Europe, to date the earliest adopters of the technology.
It also eliminates a competitor. APiON supplies WAP software to about 10 GSM operators. While both companies’ servers were WAP compatible, APiON’s WAP gateway was not based on Phone.com’s UP.Link Server Suite.
“They were in the beginning stages of being a competitor, so yes, we were in competition,” Linder said. “But it’s more about recognizing the GSM market for WAP. It’s growing so fast that we needed to take a solid step to establish a strong presence in Europe, and purchasing a company was the best way.”
The combined companies have agreements with 43 network operators for either trials or commercial deployment. Thirty-one of these are with GSM operators.
Because APiON’s and Phone.com’s WAP gateways are based on different technologies, Linder said the company will replace all APiON WAP gateways with WAP gateways based on the UP.Link Server Suite, a process he hopes will take six to eight months.
“We will end up with a single product line. All our customers will be on the same product,” he said.
While the two separately had some competing products, Linder said APiON developed some WAP applications he expects to see integrated into Phone.com offerings.
“In general, we’re really counting on their telecom and WAP expertise and their customer support center,” he said.
In particular, Linder said Phone.com will integrate APiON’s iMAP 4 e-mail server into UP.Link, as well as integrate caller ID into the UP.Browser through APiON’s development efforts.
Phone.com will retain APiON’s Belfast location and workers, adding more than 110 employees to the Phone.com payroll. The Ireland facility is Phone.com’s first product development center outside Silicon Valley, Calif. The company has sales offices in London and Tokyo.
The acquisition met with overwhelming approval on Wall Street. Phone.com stock jumped $25 the day of the announcement to $205.
