Just a few years ago, companies like Seven Networks were considered upstarts
in the mobile e-mail space, but a smattering of new challengers are stepping into the ring.

Gilbert: More market potential.

Patrick Gilbert remembers when the first smartphone was offered by a U.S. carrier a few years ago. Back then, carriers didn’t put a lot of marketing push behind the devices. Today, “everybody knows the Motorola Q. Same thing with the BlackJack,” says the CEO and founder of 4SmartPhone. And does anyone want to mention the iPhone?

When Gilbert founded his Arizona-based mobile e-mail company, “we would get the deer-in-the-headlight look because nobody knew what we were talking about,” he says. In fact, he and his team had to import devices from Taiwan to test their service because commercial devices were not yet available in the United States.

BEYOND BB
Today, smartphones are available from many manufacturers and carriers, and people are more aware of alternatives to the Research In Motion (RIM) BlackBerry. “I admire that company myself, but they (RIM) are not the answer to everybody’s problems and/or needs,” he says. Those bullish on the mobile e-mail space say that while RIM has grown rapidly, it counts only about 9 million subscriber accounts among its ranks, indicating a lot more market remains untapped.

The next big market for mobile e-mail will be the consumer and small business markets, according to Frost & Sullivan. According to a white paper the firm’s analysts did for open source provider Funambol, 67% of consumers would like e-mail on their mobile phones, but 45% are deterred by cost and 30% by complexity. Global mobile e-mail usage is expected to grow nearly 24% annually over the next four years.

The latest upstarts also point out that RIM’s BlackBerry is a propriety end-to-end solution from the server to device, and solutions from the likes of Seven or Good Technology require a software component. Granted, RIM has made inroads beyond the enterprise with the introduction of the Pearl for the consumer market. But the newcomers, like Funambol or Synchronica, say what they bring to the table are open solutions for a wider range of phones.

Brinkschulte: Addressable market is finally ready.

OPEN VS. PROPRIETARY
Carsten Brinkschulte, CEO of Synchronica, sees a shift away from proprietary solutions toward more open industry standards, which play better in the mass-market feature phones. “Our solution is based entirely on industry standards,” he says. With the more traditional proprietary solutions, users need to download and install or the manufacturer needs to pre-install software, and that’s a massive hurdle for the acceptance of such services, he says.

Synchronica works with the e-mail client built into the phone; no additional software is needed. No software downloads are required for 4SmartPhone, either, which is targeting the small business market.

Every smartphone and even many “dumb” phones, like the Motorola RAZR, ship with an e-mail client that allows the customer to use standard POP3 or IMAP e-mail, Gilbert says. All smartphones also can sync locally with a PC through a USB cable and sync contacts and calendar. But the combination of POP e-mail and local sync, which might be enough for some consumers who don’t know better, doesn’t begin to compare with the full push and sync, plus hosting, that 4SmartPhone can offer, he says.

The Frost & Sullivan report notes that consumers are not willing to pay much for mobile e-mail when they view desktop e-mail as virtually free. That doesn’t mean operators need to offer it completely for free, just that they might consider some creative pricing and packaging.

In July, Funambol began inviting consumers to join its myFunambol portal to access free mobile e-mail, contacts and calendars on “everyday” cell phones. myFunambol also provides an over-the-air mobile contacts application for the iPhone. The portal is available by invitation only to users who then can get e-mail on their phones from providers such as Yahoo!, Gmail and AOL and from work e-mail using POP/IMAP.

Consumer Messaging & E-Mail Market

ENTRENCHED PRESENCE
It’s not that incumbents such as Seven are against open standards, which are not the same as open source. Theoretically, open standards are good for users as more companies can provide interoperable solutions instead of forcing users to get an end-to-end solution from one vendor. “We’re very much pro standards,” says Ari Backholm, vice president of marketing and product management at Seven. But it’s not currently possible to achieve the breadth of applications without doing something additional. “They are not fully matured yet,” he says.

The Frost & Sullivan white paper, which concludes that Funambol stands to become one of the leaders in the emerging consumer mobile e-mail market, says a common perception of open source is it isn’t up to par with commercial offerings. However, as open source has matured, the quality, ease of use and performance of many open source projects now rivals that of proprietary software, the analysts say.

Executives at Seven point out that they have the relationships with carriers – 115 operators worldwide– as well as handset makers and ISPs, all of which took time to cultivate. “There are lots of small companies trying to hop on the e-mail bandwagon,” says Jason Guesman, senior vice president and general manager, Americas, at Seven. “The reality is this market has been happening for a long time.”

As open source has matured, quality, performance and ease of use of many projects now rival that of proprietary software.

Where Seven executives agree with their competitors is that mobile e-mail is moving from the board room to the soccer field. Seven, which in July settled a 3-year patent dispute with rival Visto, is expanding past the enterprise to focus more on the consumer because that better reflects the broad subscriber base of its operator customers, Guesman says.

Technically, it has been possible to get mobile e-mail for at least 10 years, but it hasn’t generated the wider adoption because it’s been too complicated for the average user. However, “we have seen tremendous uptake in users since about the last nine or 12 months,” Backholm says. “The democratization is really a key trend,” with more operators starting to offer mobile e-mail as a standard service and end-users starting to expect it like voice mail.

Synchronica’s Brinkschulte was involved in one of the first sync e-mail firms in 2001, when that company supported only two phones. That didn’t work out, but this time, it will, he says. “We got the technology right before, but what’s different this time is the addressable market is there,” he says, with more than 1 billion mobile phones sold worldwide every year. And that makes the wait worthwhile.