Second-Hand Services

A gaggle of applications platform vendors and provisioning artists are all vying for mobile carriers' affection: Mobilitec, Cellmania, Pinpoint, End2End — even manufacturers such as Qualcomm. But Handango is trying to get in the side door, dominating the personal digital assistant space as a prelude to the larger mobile market.

Over the past few years Handango has established itself as arguably the market leader for PDA app delivery with its hosted software platform, AMPP (or application management and provisioning platform). According to CEO Laura Rippy, AMPP to date boasts more than 100 licensees, including Handspring, Palm and even Rippy's former employer, Microsoft. In that sector, the Hurst, Texas-based company's services have jumped progressively from hand to hand like a hot potato, now boasting more than 600 applications that reach more than 5 million customers each month.

But Handango has remained a relative stranger to cell phones, avoiding the WAP space completely. However, with the rise of J2ME — which ARC Group expects will occupy 421 million handsets by 2003 — Handango aims to catch a wave into the market it's missed so far.

Almost two years ago, Handango began to crack some domestic mobile carrier accounts by powering PDA offerings including T-Mobile's Pocket PC Phone, Sprint PCS's Vision for Handspring and Toshiba handhelds, and Cingular Wireless' Symbian and BlackBerry customers. Last spring, Handango began offering Java software for the first time, and by November the company was powering the entertainment section of Motorola's “Hello Moto” Java menu.

Handango's latest partnership may help escort the company into more mobile phone handsets. Tira Wireless, a Toronto-based publisher of J2ME applications, has signed a non-exclusive deal with Handango to provide its catalog of roughly 50 applications to Handango customers. Branded “Java Jumpstart,” the venture promises a fast track to revenues, enabling carriers to deploy, provision and bill for these apps within 30 days.

Tira sells downloadable games via a software-license model that allows users to pay, on average, a $4 fee to use a particular app forever. Handango lets carriers put their brands on the service and bill however they want. But in general, the four bucks will be divided among the carrier, Handango and Tira, which also gives a cut to the application's developer.

Tony Davis, Tira's acting CEO, prefers to think of it this way: “[Handango] is the vending machine. We're the guys who stock up the vending machine.”

But Tira is more than that. If you've ever eaten a Zagnut candy bar that has passed its expiration date, or watched a bag of Skittles refuse to fall after being pushed off its rack in the machine, you know that plenty of things can go horribly wrong in a vending machine long after the guy who stocks it has gone.

Likewise, because it needs unique implementation for each device, deploying Java is no piece of Zebra Cake, either. That's why Tira developed a 250-step certification process wherein applications are tested for bugs and usability on the specific devices carriers want to provision to. “[Carriers] want their apps to be bulletproof. You can't get more bulletproof than two hundred and fifty steps,” Rippy said.

This low-risk, hand-holding entry to market should be a big hit with smaller carriers, which have modest resources, said Tole Hart, senior analyst at Dataquest/Gartner. But Handango is no doubt hoping the majors will take an interest, too. And these days, smaller carriers aren't the only ones with modest resources.

Tira already has its foot in the door at AT&T Wireless, which peddles its games on the mMode Game Room Web site. Tira's most popular games today are hockey and ski slalom, and it also offers snowboarding. “They're Canadians, so they focus on the winter sports,” said Clint Patterson, vice president of product management for Handango.

Still, Tira hasn't had any trouble connecting with the American market. On the AT&T Wireless site, good old-fashioned Hangman is Tira's third most popular application. Tira even has a dart game that's getting a lot of play.

Tira also brings productivity apps such as e-mail to the table (helpful after users have wasted half the morning snowboarding on their cell phones) and Vote Vibe, an app that lets users poll their friends. Last month, the company introduced MyMobilePix, a photo-swapping app.

Like Handango, Tira also has an international focus, listing O2 and Vodafone as partners. Handango opened a London office last fall and today gets 40% of its revenue outside North America, Rippy said. And last month, it announced its entry into the Chinese market, where handheld computing sales are expected to grow 20% per year through 2006, according to IDC — meaning that Handango is likely to keep changing hands as it penetrates new markets.