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Openwave Systems, Inc.
OPWV: 2.5 G Evaluation

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By kotobuki
October 22, 2001

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neuronnorth,

Good posts, all of them. Thanks.

I have much to say in regards to some of those posts. And I have had much I was intending to write even before I read all those links. My comments may seem somewhat disparate and perhaps overly bullish, but let me begin...

First, let us all remember how well OPWV was doing until this quarter. Despite the sinking economy, OPWV continued to beat and meet estimates. How did the market react? It continued to drive the price down, presumably because it was 'overvalued'. Then, when it misses estimates this last quarter like the majority of companies, the stock gets pounded...overly much, I thought. I added to my position at 6.90, and then again at 7.00 a few days latter when it dipped back down again.

Listwin cited the Sept. 11th attacks as having prevented the closure of contracts. The Street writer took issue with this. Indeed, Listwin may be lying, but I can sympathize personally. One of my jobs includes working for an international, multi-lingual content provider for mobile phones (http://www.wcities.com). My supervisor recently called me to stop all construction on the administrative sites where I was working; due to the attacks and the economy, we also were not able to finalize a few key contracts. And we are not a travel company.

A cool technology, so what? That comment so smacks of parochial thinking. It is not so far removed from the kind of mindset that makes some criticize new technologies, not because of any inherent flaws, but because the new advances may force them to change their traditional way of doing things. And heaven forbid we would have to take a step away from habit for the sake of a leap in convenience. This technology is not cool; it is revolutional. My portable phone has changed the way I function in my daily life...

But because I live in Japan, I may have a warped view of the wireless Internet. That, or I may be well ahead of the curve. I think it is the latter. Certainly, there are idiosyncratic reasons why the wireless Internet has taken such a hold in Japan. That writer mentions a few. But that view is quite simplistic. Are long commutes the explanation for why Japan has the largest wireless Internet population in the world, not to mention as a result of its small size as a country, an extremely high penetration rate? No, at first, it was high dial-up charges to use the Internet at your home, but that reality has vanished, seemingly overnight. Broadband is being rolled out left and right. And yet wireless Internet numbers continue to increase. Is anyone willing to believe that this might be because the applications are so incredible? Let me tell you about my phone.

It is the Docomo 503i, which was, when I bought it in January, the best phone you could get (3G has since rolled out in limited areas--an issue I will get to later). It supports JavaScript among many other things. But here are some of the things I use it for:

Instant messaging. E-mail from your phone has been particularly convenient for me, not only in my private life, but in my professional life as well. When someone needs a translation done while I am out, they e-mail it to me. I translate it and e-mail it back. That easy. (I admit, however, that it is much, much easier to send e-mail in Japanese. I simply type in the phonetics, and scroll through the list of matching characters/words until I find the one I want. With English, you have to punch in each letter. This is a problem I have been stumped on for a while. E-mail is perhaps the most popular application here, yet I can't say that will be the same in countries that use a Roman script...)

Maps. I don't need a computer navigator in my car. I have my phone to give me road maps.

Up-to-date weather reports right down to the county.

Breaking news from CNN and any number of other financial and world news companies.

Mobile banking. Out of cash in a bar at 3am (the case last night). I bum some yen from a friend and then wire the amount to his account via my phone.

Stock alerts. Mobile trading. Does the Street writer really think that people won't use this, especially once the economy picks up? You no longer need to sit at your desk or in your office. All you need is a pocket to put your phone in, a beach towel, some sunscreen, some sun. How about this: two weeks ago, I bought shares of OPWV at a ridiculously cheap $6.90 FROM THE BASE OF MT. FUJI (what else is there to do when you are in the middle of nowhere, your girlfriend is in the bathroom, and shares of one of the most promising companies today are priced so well?)

There are literally hundreds of other applications to your daily life. I can't begin to go into them. The ones I use most I think will suffice as providing reasons to be able to say:

Mobile phone technology is incredible and practical, and the West has only just begun to see what it can do. OPWV is positioned fantastically to profit on the inevitable boom that Japan has seen... And it hasn't stopped yet!

3G phones rolled in Tokyo this year. The service area is currently expanding in ever widening concentric circles from there. Service will launch here in Fukuoka (southern Japan), in the spring. And these phones are amazing. Conference calling. Video streaming. Music downloading. Basically a portable computer for your pocket. That and you can talk on it, too: ) And who do you think Docomo has partnered with to presumably bring this technology to the West? You know the answer.

My predictions:

The world is on the cusp of a new age in technology: the wireless age. These portable devices will become as common as TVs (they almost are in Japan!). OPWV will have the largest market share in several segments of this market. Although pessimists are citing figures like 2004, I think the wireless-Internet reality is just around the corner of the new year. The success of Docomo's FOMA (3G) in 2002 will not prompt Western companies to get their act moving so much as it will scare them into doing it--or else Docomo will serve their otherwise anxious customers for them...

--kotobuki


p.s. Ukyo or someone else, perhaps--I think you could answer this question: Do 3G phones require different gateways? I am not sure that I understand why the service area of Docomo's 3G phones is creeping outward from Tokyo... Are there are some upgrades to be done on the existing gateways? New gateways?

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