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Behind the glamour of the app stores, there is still considerable mileage in software which is embedded into handsets, often targeting non-smartphones and branded by operators. Opera has proven that point with its carrier-oriented Mini browser, as has Myriad with a range of messaging and social net services for Java and featurephones. To extend this business, it has made a bid for UK-based messaging specialist Synchronica, whose shares leapt on the news - even though, for now, it is holding out for a higher offer.

It could be worth Myriad improving its bid. Its carrier and embedded apps may garner fewer headlines than its virtual machines for bringing Android to new platforms, but they are a key element of its growth strategy. Synchronica would bring valuable new expertise and alliances, especially since its own $25m acquisition of Nokia's Operator Branded Messaging unit in July.

This brought contracts with 10 north American carriers, serving 6m users, and software which was mainly preloaded on Nokia's low end Series 40 handsets. Synchronica has been working to extend this to third party clients like Gmail and MSN Messenger, and merge it with its own mobile messaging technology, to create a single platform suited to all kinds of cellcos. This would complement Myriad's social networking and messaging systems to provide a more complete solution to operators, especially in emerging markets.

Nevertheless, the UK firm rejected Myriad's initial offer (price undisclosed) on Tuesday. Its shares leapt by 50% on the expectation that the Swiss company would return with a better bid. Synchronica shares were trading at 13 pence on Wednesday afternoon, valuing the company at £20.63m. Its revenues are expected to have been £18m last year, more than doubled on 2010, and are forecast to grow to £29m this year, mainly because of the Nokia products. However, it remains lossmaking.

"Companies such as Myriad and Synchronica ... are consolidating to provide better global reach in the face of a growing number of over-the-top competitors such as Facebook and Whatsapp," Martin Garner, analyst at CCS Insight, commented to Reuters. "There is an opportunity for suppliers serving mobile carriers with messaging systems and services as the carriers fight back against losing messaging revenue to over-the-top players."

In its statement, Myriad said: "The acquisition would enhance Myriad's position as the global leader in mobile messaging software, serving more than 100 mobile operators and over 20 handset manufacturers, while delivering operating efficiencies through significant synergies."

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