RoW Update

RIM provisions for possible charge in patent dispute with NTPResearch in Motion Ltd. has taken steps to mitigate any financial hit stemming from the company’s ongoing patent dispute with NTP Inc. Last week, the maker of the popular BlackBerry wireless device took a provision of between US$7 million and US$8 million in the fourth quarter of fiscal 2003. The decision was taken following a U.S. district court ruling on February 28 that ordered, among other things, the two companies into mediation (RoW, March 4/03). The court also set the pre-judgement interest on awarded damages at the prime rate. In addition, the court ordered RIM to provide its U.S. sales figures relating to products that infringed on the patents in question. Sales figures will be used for determining potential damages. The new provision now brings the total amount set aside for a potential negative outcome of the court proceedings to between US$39.7 million and US$40.7 million. Last year, a U.S. court ruled that RIM had infringed on patents held by NTP and ordered the Waterloo ON company to pay NTP US$23 million in damages (RoW, Nov. 25/02). RIM expects to report full 2003 fourth quarter and year-end results after market close on April 3. Ignition Point wins major battle with dissident shareholdersLast week, Ignition Point Technologies Corp. won a significant battle against a group of dissident shareholders that wanted to oust the company’s existing board of directors and replace it with its own slate. At its annual general meeting on March 5, 77% of voting shareholders voted to keep the existing board and maintain the company’s existing auditor. The issue came to a head a couple of weeks ago when K2 Arbitrage Fund LP, the largest shareholder of Ignition Point, expressed dissatisfaction over the direction of the company and wanted a greater say in the makeup of the board of directors. In a move aimed a wresting control from management and the current board of directors, the dissident group proposed its own slate of directors (RoW Update, Feb. 24/03). Ultimately, however, the group’s plan didn’t pan out and management won the boardroom battle. According to Pacific Corporate Trust, parties holding 53% of Ignition Point’s common stock voted, and shareholders representing 41% of outstanding common shares voted in favour of management’s proposals. Ignition Point estimates that fewer than 20 shareholders submitted proxies in favour of the dissident group. Technology business idea competition starts todayToday, Telus Corp. is kicking off its Telus New Ventures BC technology business idea competition with a seven-part business education seminar. The provincial competition is a unique blend of business education, networking and mentoring combined with a cash giveaway and other prizes. The deadline for entry is April 15 and registration costs $50.Designed to help early-stage entrepreneurs gain the business acumen and other skills necessary to take an idea and build into a viable business plan, entrants will attend seminars and networking events as part of the competition. Those who make it to the third round will be teamed with an industry mentor to take their plan to the next level. Fourth- and final-round participants will present their business plan to a jury of venture capitalists, angels and financiers. First prize is $60,000 from the Bank of Montreal. Second and third prizes are worth $40,000 and $20,000 respectively. Wi-LAN unveils long-range wireless access productCalgary-based Wi-LAN Inc. has unveiled its latest fixed wireless access product, which aims to provide long-range coverage in the point-to-multipoint environment. The Ultima3 LCPE offers the same rapid deployment functionality as its sister product the Ultima3 RD. Both products operate in the 5 GHz licence-exempt frequency band. The new Ultima3 LCPE is ideally suited for large-scale commercial and Internet service provider markets due to its coverage of 38 kilometres and its inexpensive installation costs, according to Wi-LAN officials. Mitec lands supply agreement amid restructuring troublesMitec Telecom Inc., a Montreal-based maker of components for fixed wireless equipment, has inked a $5-million supply agreement with a Chinese telecommunications infrastructure provider. Mitec will supply RF conditioning products for Huawei Technologies Co. Ltd.’s range of base stations. Deliveries have already begun and are scheduled to be completed by July 31, 2003. The supply deal comes at a time when Mitec is making its way through a significant restructuring of its manufacturing operations (RoW Update, Nov. 4/02 and Oct. 7/02). Last month, the company announced the closing of its manufacturing facility in Lostwitheil in the U.K. as part of the strategy to streamline production operations. Products that were made at the Lostwitheil facility will be shifted to the Montreal production centre. U.K. manufacturing will now be concentrated in Dunstable. EARNINGS WaveRider continues to dazzle with higher revenueWaveRider Communications Inc. continues to ride the success of its fixed wireless access products, which are now deployed in 43 states across the U.S., in posting yet another year-end revenue increase. In its 2002 fiscal year ended Dec. 31, 2002, the Toronto-based equipment maker recorded a 15% increase in revenue, which reached the US$9-million mark. While the company posted an increase in revenue, it recorded a net loss for the year of US$11.2 million, down substantially from the 2001 level of US$21.5 million. "With the consolidation and restructuring of our operations in 2002 complete, we believe WaveRider is solidly positioned to help drive the growth of broadband deployments throughout North America and around the world," CEO Bruce Sinclair said in a news release. Ignition Point posts yet another lossIgnition Point Technologies Corp. continues to lose money as the company posted a net loss of $520,487 in the first quarter of fiscal 2003 ended Dec. 31, 2002. The net loss was higher sequentially than the $372,437 the company recorded in Q4 2002, but lower than the $631,162 net loss posted in Q1 of 2002. While Ignition Point continues to lose money, it maintains a war chest of more than $9 million. But cash and cash equivalents on hand have dropped from $11.2 million at the end of Q1 2002. The company’s Fatport subsidiary continues its rise on the Wi-Fi scene and has to date rolled out 40 hotspots in and around metro Vancouver. During the quarter, Fatport expanded beyond its retail market space and is now actively marketing to the hotel and airport commercial enterprise segment. Wi-LAN records solid financialsCalgary-based Wi-LAN Inc. posted revenue of nearly $5.5 million in its fiscal 2003 first quarter ended January 31, which is 14% higher than revenue earned in the same quarter a year earlier. However, on a sequential basis, revenue dropped 12% from the $6.2 million recorded in the fourth quarter of the previous year. Projected year-end revenue continues to be within 2003 guidance of between $25 million and $30 million, Wi-LAN said. The company’s broadband business continues to make up the lion’s share of overall revenue, raking in approximately $4.7 million in Q1. That was an increase of 37% from the level recorded in the same period last year. Wi-LAN’s antenna business unit experienced a significant drop in year-over-year quarterly revenue, dropping from about $1.4 million to $770,000. Mitec posts slight revenue increaseMitec Telecom Inc. recorded a slight increase in revenue for the third quarter ended Jan. 31, 2003, inching up to $23.7 million from $23.4 million posted in the previous year’s same quarter. Despite the small quarterly increase, revenue was down 17% in the nine-month period. The Montreal-based wireless component manufacturer notes in a news release that OEMs continue to exercise caution in capital spending, which has resulted in the significant drop in revenue over the nine-month period. Gross profit for the quarter was up substantially to $2.7 million from $100,000 recorded in the previous year’s same quarter. However, for the nine-month period, gross profit dropped nearly 45% to $8.6 million from $15.6 million. INTERNATIONAL NEWS Spectrum policy under review in the U.S.The U.S. Senate Commerce Committee has begun hearing testimony into the country’s current spectrum policy. Led by Senator John McCain, the lawmakers appeared to agree to set up a trust fund to reimburse broadcasters for vacating their analog spectrum so it can be used for other services such as mobile wireless and public safety, according to U.S. trade publication Wireless Week. This is a highly contentious issue as the broadcasters received the spectrum for free and may be financially compensated for a resource they never paid for in the first place. Several witnesses were questioned about how new regulatory policy should be shaped for the industry. U.S. readying for mobile game explosionThe United States wireless industry appears to be preparing itself for the eventual explosion of mobile gaming. The Game Developers Conference in San Jose held a couple of weeks ago was proof that traditional game developers are beginning to realize the importance of the "handset" to their future market. At the conference, game developers mingled with cell phone companies such as NTT DoCoMO. Danish consulting firm Strand Consult estimated that the European mobile gaming market alone may be worth up to US$3.5 billion. Last year, the European mobile gaming market was worth only US$49 million. That’s a lot of upside for an industry looking to improve ARPU.While the market is much more developed in Europe, there are signs mobile gaming will soon take hold here in North America. Nokia’s N-Gage device, which resembles a Game Boy more than a cell phone, and others coming down the pipe will certainly influence mobile gaming. More details. U.K. racking up solid wireless data revenueThe United Kingdom’s wireless operators are racking up solid revenue from wireless data services such as ringtones, logos and SMS, according to a new survey from NOPWorld and Mobile Metrix. The two research firms polled people aged between 15 and 34 and found that these people spent 60 million pounds on ringtones, 49.2 million pounds on logos and 90 million pounds on SMS alerts. Other interesting findings from the survey include 32% of those surveyed purchased ringtones in the last three months, 21% had purchased logos and 20% had purchased SSM alerts.

RoW Update

News | March 10, 2003

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