Esmertec and Purple Labs merge as handset software consolidates
Published: 16 February, 2009
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Nokia's CEO said last week that the company would not make more major acquisitions to boost its mobile software push, but would focus on its existing portfolio and partners. However, even with such a prime buyer out of the running, there is still an ongoing wave of consolidation in the mobile device software market as in most sectors reliant on the pressurized handset industry. In the latest move, Swiss-based Esmertec, a veteran of mobile Java systems, is to acquire Purple Labs of France, which acquired Openwave's traditional browser business last July.
The merged company will be called Myriad Group. The firms have worked closely together before, since both are financially backed by venture group Soffinova. Last summer Esmertec took over the mobile software activities of French handset maker Sagem, after Sagem's former parent, Safran Group, sold the company to Soffinova. Esmertec then collaborated with its stablemate Purple Labs (which had gained Sagem's applications portfolio) to develop the Java-based platform for low end to midrange phones, licensing the result back to its original owner.
Esmertec specializes in Java in-device engines and will now look beyond that market to a broader platform geared to emerging markets and voice-centric phones. It has now added Purple Labs Linux software suite and Openwave technology for browsing on basic handsets to the Sagem software, which is installed in millions of devices, and its own Java middleware and application layer. Software houses in this profile need to target the midrange and developing markets, as high end phones move from low footprint, embedded software to fully blown operating systems and PC-style browsers - a trend that will be dominated by big software names, rather than the traditional specialists. Esmertec is keeping its foot in this market too though, having joined both the LiMo Foundation and Android's Open Handset Alliance.
The new-look Myriad Group will have most major phonemakers and 30 mobile operators on its client list. Esmertec will pay almost 20m shares to take over privately held Purple Labs. Purple Labs' CEO Simon Wilkinson will be CEO and the deal should close in March. Myriad will have 800 software engineers and combined revenue in 2009 of about $125m.
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