Red Bend investors prepare to see return on "over the air" mobile phone updates

by Guy J Kewney | posted on 12 October 2006

Financial backers who originally decided Red Bend was a great way to beat slow dialup Internet links, look like they're getting a second chance to cash in on their investment, as the company starts to score heavily in the (much slower) mobile Internet download business.

The company sells FOTA, and it "is becoming a really successful wireless service," Moreten Grauballe (Executive Vice President of Marketing above, left) told NewsWireless.

What FOTA (Firware Over The Air) does, is to update software in your phone. It means handset makers can start doing dumb-looking things like shipping incomplete-debug phones, and download software fixes as and when users have problems.

Previously, this would have involved the fabulously costly task of recalling, and re-"flashing" the memory in the phone. So it's quite believeable that the company's predicted 20% plus market share predictions for 2007 (187m phones out of a world 950m total market) will be realistic.

Today's Q3 financial announcement isn't required, because Red Bend is a private company. But, as its venture capital supporters have been waiting patiently since 1999 to see a return, they are understandably anxious to see the company's potential earnings acknowledged by outsiders; and to be able to start approaching possible buy-out or IPO partners.

Executives at Red Bend don't expect to be put up on the slave block for another six months at least - they have a heavy PR campaign to focus the mobile world on just how FOTA is doing.

Expect a third-party assessment of sales figures and competitive market position from ARC Chart on Monday. Red Bend executives are making no overt predictions of what the survey will reveal, but cannot conceal a certain smug satisfaction over what they personally expect.

Next step for Red Bend? "Partial updates," said Grauballe. "What we're doing is full firmware update. You create an update of the phone system software image, and transmit it, then rewrite the entire firmware."

That's fine for defect fixing and app upgrades, he says. "But really, you need to do it on a component basis. We have been investing in 'embedded feature delvery' using technology from FOTA, but only changing individual applications, or JVM updates, and other middleware. So it's shifting from customer-services model, to revenue services business model."

The company did a technology demo at the last 3GSM show, and hope to announce their first embedded feature delivery customer in Barcelona in February.

A long wait... - You can discuss this article on our discussion board.