November 2nd, 2004
Nokia is developing a smartphone that will incorporate Good Technology’s GoodLink wireless e-mail service, a deal that should broaden Good’s penetration and boost its market share against leader Research in Motion.
The people at privately held Good say that Nokia (nyse: NOK – news – people ) decided to use its service partly as a defensive play against RIM (nasdaq: RIMM – news – people ), which is increasingly getting into the handset business. Nokia also sells RIM’s BlackBerry wireless e-mail service with its phones, as well as its own service.
“RIM is aggressively targeting the market for smartphones,” says Sue Forbes, Good’s vice president of marketing, noting that hardware revenue at RIM has been increasing. “We do think Nokia is waking up to the reality of the marketplace, that it’s growing and RIM is going after the market. Enterprise customers need a flexible, standard approach.”
Sunnyvale, Calif.-based Good touts its technology as being more “open” than RIM’s because it runs on mobile operating systems from Microsoft (nasdaq: MSFT – news – people ), PalmSource (nasdaq: PSRC – news – people ) and Symbian. RIM’s system is more vertically integrated. That means that the system uses its own software, hardware and services infrastructure.
Forbes says that the Nokia/GoodLink product will make it easier for other handset makers that use the Symbian operating system to offer the GoodLink service. Sony Ericsson, Samsung and Motorola (nyse: MOT – news – people ) are among the companies that use Symbian’s OS.
The market for wireless e-mail is very small right now, about 5% of all corporate e-mail users, but is growing fast and is a strategic stepping-stone to wireless access of corporate data. Technologies like Microsoft’s .Net, IBM’s (nyse: IBM – news – people ) Websphere and Oracle’s (nasdaq: ORCL – news – people ) collaboration suite become important pieces in a puzzle that connects business users to their corporate data from whatever device they are using.
As such, Nokia’s goal is to make its handsets the preferred device for mobile messaging. In a statement, Nokia said that wireless access to critical business applications beyond e-mail will be a natural evolution. The GoodLink/Nokia phone will be available in 2005 through Good and, in all likelihood, its carrier partners.
Good is one of the more promising startups to emerge in recent years. The company has raised about $140 million in venture funding from an A-list of Silicon Valley capitalists and has more than 3,000 corporate customers. The company’s chief executive, Danny Shader, suggested in an August interview that the company would like to move toward a public offering in the future.
In September, Standard and Poor’s said that Nokia’s handset market share had stabilized at 30% in the second quarter after a “significant decline” in the first quarter.
Customers are no longer buying single-function devices like PDAs or cell phones. They now want integrated gadgets that merge the functions of two, three or four devices into one. Smartphones like the one Nokia is working on are starting to constitute a more substantial percentage of overall handset unit sales. One could conceivably imagine a scenario where sales growth of notebook PCs slow down, since business users can read e-mail, including attachments, and access corporate databases from their cell phones.
By Lisa DiCarlo