Summus Announces 2004 Fiscal Year End Results

SummusSummus has released its 2004 end-of-year results, which saw total wireless application revenues for 2004 increase by 267% to $5,118,551 from $1,395,296 for 2003 and gross margins increase to 50% in 2004 from 37% in 2003. The company is still losing money, but expects to be in the black in the second quarter of 2005. In the release Summus lists four areas that will drive revenue this year:

  • Mobile Personalization: Basically wallpapers and ringtones…Starting off with Sports Illustrated Swimsuit wallpapers Summus added College & Greek Logos, Hooters Calendar, Grateful Dead Wallpaper and Video Screensavers, and Golf Digest.
  • Mobile Multiplayer Games: Mmmm…love that word, “multiplayer”. The first success was Texas Hold’em poker, and Summus is keen to get a slice of the gambling pie, having also launched a poker tutorial. However, the company is also targeting what it calls the “youthful gaming” market and has partnered with Mattel (of Barbie fame) to bring out some games later this year.
  • Mobile Imaging: Summus sees mobile imaging (camera and image applications) as a strategic investment because of its network complexity and strong barrier to entry. The idea appears to be to enter a market with fewer (but stronger) opponents. Aside from Fujifilm, Summus has partnered with AOL (which is desperately trying to find a replacement for its dying ISP business) to release some photo related products later this year.
  • Mobile News and Information: Summus has joined with the Wall Street Journal to launch a “comprehensive news and financial mobile application”. It also has a partnership with Associated Press for MMS subscriptions…

Summus’ strategy (which I think is a good one) appears to be to partner with well-known brands, probably because Summus isn’t very well known. Everyone’s talking about the ‘mobile bubble’ (every man and his dog got burned in the tech crash and are now experts on over-hyped markets, apparently) but it’s been pointed out that this situation is different because the mobile market is based on an actual business model, in fact several of them.

It’s easy for start-ups with funny names to claim they’re at the cutting edge of the latest breakthrough and get wads of cash, and a lot of them fail because they don’t stick to a clear business plan and driver, they branch out and try lots of different things without getting strong in any one of them. Summus is trying to get into new mobile market segments, but it’s doing so by partnering with experts in the area (Fujifilm=imaging, WSJ=news), which also bring strong brands to support the new mobile product, giving them a much greater chance of success.

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