Laurence Alexander takes over in April as ceo of Emblaze Mobile, a designer and manufacturer of branded and customisable multimedia handsets. Previously, Alexander had one of the most creative jobs within O2 — as ceo of O2 Online he was head of data strategy and services, including the O2 Active portal. He also headed up products and services for the operator, as well as managing sponsorships including Big Brother, Arsenal and the England rugby team. So why would he make the move over the fence to a handset manufacturer, and to Emblaze Mobile in particular. He tells Keith Dyer about operators’ priorities and how suppliers, and Emblaze Mobile itself, can best meet them.
Mobile Europe:
Laurence, you’re moving from a job as ceo of O2 Online to ceo of handset designer and manufacturer Emblaze Mobile. Before we talk in more detail about your plans for Emblaze Mobile, can you tell us a bit about the background of the company itself, as it may not be very well known to European readers?
Laurence Alexander:
Of course. Well, Emblaze Mobile is one of several companies in the Emblaze Ltd group, all of which address different market areas.
Adamind is a joint venture between what was formerly the media adaptation business of Emblaze, and Philips. It meets the transcoding and content adaptation needs of operators’ MMS systems, currently has around a 60% market share and is about to place an IPO on London’s AIM. Then there is Orca Interactive which is a company involved in IPTV middleware, also with around 60% market share. Then there is a business specialising in wireless video for defence and homeland security applications.
The fourth business is Emblaze Mobile, which is where I fit in. It’s also the largest part of the group. Put simply, Emblaze Mobile develops and manufactures next generation, customised mobile devices for mobile operators. The company was founded in 2001, and has three main offices. Our Israel office is where our technology, and research and development for software, applications and content is based. Then recently the company has purchased Korean handset ODM, Innostream, giving us a volume manufacturing facility. Finally, our company headquarters are in London, where our management, sales and marketing functions are primarily based.
Mobile Europe:
Other Emblaze Ltd entities have spun out within mergers or joint ventures, with Emblaze retaining a majority stake. Do you think this may represent the future for Emblaze Mobile?
LA:
It’s early days but if you look at the track record of the parent company than obviously a similar approach is a strong possibility.
Mobile Europe: From the sounds of it seems the company is about the development of phones and phone software that can be developed either in an ODM or OEM capacity?
LA:
Emblaze Mobile is all about three things. First, we are about designing and manufacturing mobile phones, as you say, but in a slightly different way. Operators are increasingly looking towards an ODM policy. So in that instance we could make an O2 phone, powered by Emblaze, which could perhaps include our software — for example user interface software. Second, we are manufacturing mobile phones under our own brand. Now, we are not talking about taking on the likes of Nokia, SonyEricsson or Motorola head-on. They are all busy trying to compete with each other in a mass market manner but we are talking about attacking the market in a targeted way, in areas they don’t necessarily want to work in. It is why we are concentrating our software development for specific people and specific types of customer.
Mobile Europe:
OK. You mentioned the trend for operators to have an ODM strategy. Why do you think operators are turning away from the established brands, in some areas at least?
LA:
The reason is that, especially in a market like Europe, increasing ARPU is becoming more and more important and by defining exactly what’s in a phone at the development stage an operator can really guarantee what they get from that phone. As the cost of customer acquisition gets more expensive and there are more and more devices on the market, it is getting more difficult to select and market the right device. Operators need to buy wisely, swiftly and know they are getting value for money.
Part of my role at O2 was in the products and services side, from SMS to GPRS and data services. It also included devices, so I have lived and breathed devices from the service side. Obviously the O2 XDA was the PDA that really paved the way in terms of an ODM strategy, and now there is the X-Series phone that has significant market share already. They both showed that there was a gap in the market for products like that.
To relate that to Emblaze — because we have so many different factors to our business, we can use our portfolio to customise a phone to the needs of one operator, so we can develop very good relationships with operators. I think that’s great, and my experience will help us speak the operators’ language even more clearly
Mobile Europe:
It sounds as though you could be in a position to become a trusted partner for an operator between all the many ODMs and software vendors, and the operators themselves.
LA:
You have to understand that an operator’s core business is based on winning market share. They want to concentrate on that, not on the structure of the ODM market. So I’m offering to act as an ODM broker to operators We’ll design and provide devices ourselves, but we can also be about getting you the best from all over the world, to design a phone exactly to your specification.
We have got lots of content and applications partners lined up. We want to work with them so if, for instance, an operator is looking for a licensing deal for an email client, depending on what they funcitons they want it to fulfil, we can find what is best and suggest what we think they should be doing.
Mobile Europe:
You’ve talked already about operators’ own specifications. What do you think are the needs you can help operators meet through an ODM relationship that they may not be able to get through the established brands?
LA:
Number one, when you are talking about a customised phone, a mobile phone is a fashion item, so it is about the design of the handset itself. Everyone always asks what the killer app is, and they are missing the point that the biggest killer app is the phone itself. People buy phones because they look great.
And to show I mean this I can tell you one of my first hires is someone who is coming in from the fashion industry itself.
Second, customisation is about the user interface and what software goes into a phone. Once a buying decision has been made operators then need to drive ARPU. That means that customers need to understand what their phone can do. The drill down menu needs to be very simple — so the application layer is crucial. That means a phone needs a great UI and customer layer to deliver a higher ARPU. It’s all about ease of use. For example, in the area of MMS the group has the content transcoding knowledge of Adamind. Extending that knowledge to the device could make MMS really much simpler to use.
Mobile Europe
You mentioned addressing areas that the established vendors are less interested in, and also about the primacy of the appearance of a phone. Does this give some clues as to the sort of market you think Emblaze is best equipped to help operators address?
LA:
We have done an awful lot of market research — in focus groups, you name it — working towards some definitions of market segmentation. We have identified three specific markets in the 18-35 age group, and we think we now understand from our research what it is they want. Now we want to take that knowledge back to operators. The level of understanding that we have of the customer segments we have targeted — I can tell you from my own operator experience, there aren’t any operators that have that. Obviously people within operators will respond well to this kind of information. The more they understand about their customers, the more efficient they can be, and customers will churn less and become more sticky.
Mobile Europe:
The obvious question is, how is Emblaze going to put all of this together in a coherent approach to the market?
LA:
Well I am talking about seven approaches to the market. Here they are!
First, European operator sales. Second, win contracts in Asia Pacific through Innostream’s presence. Third, as an ODM broker. Fourth, business development with other brands and licensing deals. Fifth, strategic mergers and acquisitions to add more capabilities and expertise. Sixth, direct sales through a web shop. Seventh, selling direct in tier three countries where there are great markets just starting on 2.5G.
The other big point is that we have done some things, for example on next generation video technology and produced some handsets, but we couldn’t give operators mass production. But that has changed now.
Mobile Europe:
Certainly a comprehensive list. Perhaps of most immediate interest to readers of this magazine would be your approach to European operator sales.
LA:
We have successful relationships today and are selling phones in Asia Pacific and Israel, but not not Europe. We are making a big launch at 3GSM of the new brand for Emblaze Mobile. Our stand will be very different to the usual and I urge people to drop by and come and see what we are about. I can’t say a great deal more about the branding and the show launch but to readers who are attending the show, come to the stand to find out more.
Mobile Europe:
Intriguing. I was also interested in what you said about developing business by working with other manufacturers, perhaps in a licensing capacity.
LA:
Yes, it’s early days at the moment but I would be very keen to develop relationships with the likes of Nokia, and the other handset vendors we have mentioned. I am talking about perhaps working with them on the design side, or if they are over-stretched helping them with the manufacturing as well.
Mobile Europe: Finally, you had what looks like a great job at O2. Why choose Emblaze for your next position?
LA:
It’s a fair question but in a way a bit of an insult to Emblaze. It’s the excitement of building a brand, developing something new and bringing it to market. I had four great years at O2 but it was time for a fresh challenge and Emblaze offers an exciting chance to do that.
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