PHCM buys APiON -- I'm a lousy analyst...

Rohit Khare (rohit@munchkin.ICS.UCI.EDU)
Mon, 11 Oct 1999 10:34:28 -0700

The stock is up 10% just this morning. Quintupled since August, not
June. Ever since I wrote my analysis dismissing their technology,
it's been rocketing upward. If I only had invested 4K revenue into
its clients (and enemies!)...

On the other hand, the market is, as usual, being quite foolish about the
long-term meaning of the deal, I think. Buying APiON means *removing*
an independent player from the WAP market. This brings the number of WAP
gateways back down to three:, Nokia, and Ericsson. Telecom is an
industry notoriously insistent on not buying into your competitors or
sole-sourcing; we should be seeing a flowering of WAP gateway suppliers, not

At any rate... $2.5 million dollars per employee cost. For software
largely (claims) to have written equivalents of. I sense the potential for a
major software engineering disaster.

But dammit, I should have bought the stock!


PS. Happy birthday, Taurus -- today is the tenth anniversary of the bull market



MONDAY, OCTOBER 11, 1999 8:31 AM
- PRNewswire

GENEVA, Oct 11, 1999 /PRNewswire via COMTEX/ -- At Telecom'99, Inc. (Nasdaq:PHCM) announced today that it has signed a
definitive agreement to acquire the WAP products and related
operations of APiON Ltd, a Belfast, Northern Ireland based
telecommunications software company. This acquisition will greatly
enhance's ability to rapidly penetrate and service the GSM
market consisting of over 300 network operators worldwide.

(Photo: ) APiON
is a leading European WAP software supplier with commercial
relationships for delivery of WAP software to 10 GSM wireless network
operators including Swisscom and Sonera. APiON has particular
expertise in GSM Intelligent Networks, wireless data and WAP
technology. The acquisition further increases's strong
technical and sales presence in North America, Europe and Asia.

In connection with the acquisition, APiON shareholders will receive
1.3 million shares of valued at approximately US$239 million
as of October 8, 1999. The stock-for-stock transaction will be
accounted for using purchase accounting. Closing is anticipated to
occur prior to the end of October 1999. APiON's non-WAP related
services business is excluded from the acquisition.

APiON's Irish facilities will form the basis of's first
product development centre outside of Silicon Valley and will also act
as the support centre for carrier deployments in Europe. The combined
resources of and APiON will enable the company to provide
customers with greater technical expertise and support.

"APiON adds leading European network operators to's
extensive list of GSM customers that includes Mannesmann Mobilfunk,
Omnitel, Cegetel/SFR, Telstra, Sunday and 17 others," said Alain
Rossmann, Chairman and CEO of "The addition of over 110
experienced people, including APiON's management team, to our European
organization underscores's commitment to the global GSM
market and consolidates our position as a leading supplier of WAP

"APiON quickly saw the potential of WAP and was pleased to be an early
member of the WAP forum. With our telecom knowledge we were able to
quickly develop the core components of WAP and bring them to market
with operators such as Sonera and Swisscom," said APiON managing
director Denis Murphy. "We have admired's skills in
co-founding the WAP Forum, in building successful customer
relationships and in raising the profile of this important

"We believe that consolidating the two companies will allow us to
achieve immediate growth and offer better service and support to our
customers," said Malcom Bird, managing director of
(Europe). "The combined companies have contractual relationships with
43 wireless network operators for either trials or commercial
deployment, 31 of which are GSM operators. We believe that
is now well positioned as a first choice source for vendor-neutral,
interoperable WAP software infrastructure."

About, Inc. is a leading provider of software that
enables the delivery of Internet-based services to mass-market
wireless telephones. Using its software, wireless subscribers have
access to Internet- and corporate intranet-based services, including
Email, news, stocks, weather, travel and sports. In addition,
subscribers have access via their wireless telephones to network
operators' intranet-based telephony services, which may include
over-the-air activation, call management, billing history information,
pricing plan subscription and voice message management. is
headquartered in Silicon Valley, California and has regional offices
in London and Tokyo. Visit for more information.

About APiON APiON is a leading provider of infrastructure into the
wireless Internet. APiON products and services allow customers, using
any wireless technology, to access a wide range of Internet and
advanced telephony services. APiON's underlying technologies converge
IP, intelligent networking and wireless data, and position carriers
for the explosion of data based value added services expected in third
generation wireless systems. APiON is headquartered in Belfast,
Northern Ireland.

Except for the historical information contained herein, the matters
discussed in this news release are forward-looking statements
involving risks and uncertainties that could cause actual results to
differ materially from those in such forward-looking
statements. Potential risks and uncertainties include, but are not
limited to,'s limited operating history, potential
fluctuations in's operating results, uncertainties related
to's long sales cycle and reliance on a small number of
customers,'s dependence on the acceptance of its products by
network operators and wireless subscribers,'s ability to
adequately address the rapidly-evolving market for delivery of
Internet-based services through wireless telephones, the need to
achieve widespread integration of's browser in wireless
telephones, competition from companies with substantially greater
financial, technical, marketing and distribution resources and the
ability of to manage a complex set of engineering, marketing
and distribution relationships. Further information regarding these
and other risks is included in's form 10K September 24, 1999
and in its other filings with the Securities and Exchange Commission.