Aspiro AB (publ): Interim Report, January-March 2000

Interim report Aspiro AB (publ) January - March 2000 Far-reaching preparations aimed at becoming a leading global player within mobile Internet Strong organizational growth and clearer buying signals from, among others, operators and Internet service providers characterized the first three months of the year. Preparations for Aspiro's international expansion intensified through continued recruitment, acquisitions, product development and the establishment of three new offices. The majority of Aspiro's work during the first quarter was aimed at readying the company to take a leading position in the mobile Internet market, a market that is expected to make its breakthrough during the second half of this year. * The number of employees rose by 47 to a total of 107 at the end of the first quarter. The organization was principally strengthened in key areas such as sales, product development and operations. * Through the acquisition of Advox, InfoCreator and Telesta (Sundbyberg ITCenter), Aspiro has expanded its product portfolio with new messaging and communication services as well as products for handling content. * Aspiro opened offices in Luxembourg and San Francisco. Through the acquisition of a company in the USA, Aspiro is now also represented in Boston. * Aspiro's internal processes for development, sales, delivery, management and support have been reassessed and strengthened during the first quarter in order to manage the company's planned growth and listing on the O list of the OM Stockholm Stock Exchange. * Net sales amounted to SEK 2,065 thousand. * The net loss for the year was SEK -35,142 thousand. * A letter of intent to deliver services to the Italian telecom operator BLU was signed March 23. * After the end of the first financial period a memorandum of understanding was signed between Aspiro and Cybrid, one of Japan's leader players in the mobile Internet market. About Aspiro Aspiro provides mobile applications and services promoting Life in Motion using cutting-edge knowledge and technologies. Aspiro offers operators, content providers and mobile organizations a wide range of solutions, from pre-packaged portal services to industry-specific solutions. Founded in 1998, Aspiro is today a world leader within mobile Internet. The Scandinavia-based company had 107 employees as of March 31, and offices in Sweden, Norway, Luxembourg and USA. Aspiro's business concept, organization and operations are based on many years of experience gained in the mobile telecommunications and IT industries. The market Aspiro is operative in the market for applications and services for mobile Internet. This market is today in an embryonic stage and is expected to grow very strongly over the next few years. All the analyses from players in the market, e.g. Ericsson and Nokia, as well as research institutes such as Yanke Group, Ovum and Arc, point to a far greater use of the Internet via mobile devices than from stationary computers in just one or two years. Aspiro is one of the companies that will make this possible through developing, marketing and hosting mobile applications and services for, among others, operators (with or without their own telecom networks), Internet service providers, portal owners, content providers and mobile organizations. Development of business activities Aspiro's goal is to be a leading and global player in the mobile Internet market. Since the market is expected to grow extremely quickly it means that to attain this goal the company is a facing a period of rapid expansion over the next 1-2 years. During the first quarter the company implemented far-reaching improvements and strengthened its organization, processes and product range. This was done in order to create a foundation on which to grow quickly and in a controlled manner. Growth is imperative if the company is to successfully manage the expected vigorous increase in the demand for its products. Among other things, the company's organization for product development has been greatly enlarged with the addition of 25 new employees within R & D. The companies, Advox, Telesta (Sundbyberg ITCenter) and InfoCreator were acquired in the first quarter in order to strengthen further Aspiro's product portfolio of communication and messaging services and content management. All the acquisitions were paid for with shares in Aspiro AB. Advox, which has 10 employees, is a Stockholm-based company that develops products for wireless e-mail and messaging solutions. Telesta, with some 20 employees, develops and markets mobile communication services for, among others, people with impaired hearing. The company, which has offices in Sundbyberg and Boston, now operates under the name Aspiro Mobile TextPhone in Sweden and Aspiro Inc. in the USA. InfoCreator is a start-up company that develops tools for content providers and content management. Far-reaching projects have also been initiated in order to make the company more process orientated. Four main processes have been identified: product maintenance, sales and delivery, management, and support. Together, these are expected to constitute the heart of Aspiro's future business activities. A project to create a foundation for these processes also got underway during the quarter. This foundation is a durable structure that guides the work of the respective functions and provides an organizational center for employees. A major part of the development work has focused on internal business management and administration. A far-reaching project was initiated to negotiate, purchase and install a new business support system. The system, called Navition, provides support to the organization and the processes Aspiro has built up to guide and support its business activities. The system comes into full operation at Aspiro in May. A powerful strengthening of the company's sales organization was begun during the first quarter. Aspiro International AS was established in Luxembourg and Lena Wittbjer, formally of the Kinnevik/Millicom Group, was recruited as CEO. Luxembourg will lead Aspiro's global sales activities with support of an organization consisting today of 17 persons located in Sweden, Norway, Luxembourg and USA. The new company's role is to push forward Aspiro's continuing expansion via acquisitions or the establishment of new offices. Aspiro has also established offices in San Francisco. Business there will be focused on research and development in the area of integration of mobile communication and the Internet. The office will also adapt Aspiro's products for the American market. Aspiro Ventures, a division within Aspiro AB, was formed in February in response to the overwhelming number of enquiries regarding collaboration and alliances that Aspiro had received from entrepreneurs involved in developing products and services for mobile Internet. The aim of Aspiro Ventures is to provide financial and industrial support to new and innovative companies within Aspiro's own core business activities thereby creating the foundation for long-term business relations. Personnel The number of employees rose by 47 persons and totaled 107 at the end of the first quarter. Stefan Lindquist was appointed as Aspiro's CFO. Lindquist comes most recently from Europolitan where he worked as head of finance. The board of directors believes that his sound experience of mobile telecommunications and of leading finances in a fast-growing listed company will be a valuable asset to Aspiro. Lindquist takes up his position in May. Sales Although the market and the demand for mobile applications and services remains relatively small, a clear change in sentiment was noticeable during the first quarter among Aspiro's potential customer groups - particularly operators and Internet service providers. Whereas before interest was generally focused on what the new technology had to offer, it has now steadily increased and transferred to Aspiro's range of pre-tested products and services. The company interprets this as an initial yet limited breakthrough, both for the market in general and Aspiro in particular. Aspiro has received and answered a large number of enquiries about its products and services - everything from individual applications to complete mobile portal solutions. The majority of these bid invitations are to receive a response during the second and third financial quarters. The work during the first quarter resulted in a number of successful business transactions. A Web/WAP solution was delivered to the Malaysian operator Mtech's mobile Internet portal. In addition, a letter of intent was signed with the Italian mobile telecom operator BLU for the first delivery of several mobile applications for its portal. The work with this order started during the first quarter. Finally, e-mail solutions were sold to a number of municipalities and companies in Sweden. Alliances Aspiro and Swedish Across Wireless entered into an alliance for making Aspiro's comprehensive range of WAP services available in more models of mobile phone that are already on the market. Some examples of the models that will be able to use WAP services are: Nokia's 6150 and 6110, Ericsson's T18 and Siemen's S25. Aspiro and Finnish Akumiitti entered an alliance for the sale of wireless services. With Akumiitti's range of services to operators and mobile content providers, Aspiro greatly expands its portfolio of entertainment services. Aspiro and Massive Entertainment, Swedish developers of interactive games, consolidated their already successful collaboration by together launching a new mobile game. In addition, both companies have signed a letter of intent. In accordance with the agreement Massive Entertainment will develop a wide selection of entertainment services for Aspiro's product portfolio aimed at mobile operators and portals owners. Aspiro and Irish Baltimore Technologies signed an agreement on providing secure stock trading from mobile phones. Aspiro's stock During this period Aspiro's unlisted stock was traded through Cheuvreux Nordic and, since February, Hagström & Qviberg's High Tech Market. Outlook for 2000 Over the next two financial quarters Aspiro will continue to strengthen and improve its capacity with the aim of becoming a leading global player in the mobile Internet market. Among the immediate plans are improvements within the product development and sales organizations along with further acquisitions and the establishment of international offices. The principle key markets in the short term are England, Germany, USA, Italy and Southeast Asia. This preparation will lay the foundation for an increase in Aspiro's capacity to meet the expected rise in demand for the company's products when the market for mobile Internet makes its breakthrough during the fall of 2000. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/19/20000519BIT00050/bit0001.doc The full report http://www.bit.se/bitonline/2000/05/19/20000519BIT00050/bit0002.pdf The full report