View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
April 25, 1997updated 05 Sep 2016 1:10pm

GEOWORKS IS WOUNDED BUT OPTIMISTIC

By CBR Staff Writer

Geoworks Inc, Alameda, California developer of smart phone operating systems, reported a fourth-quarter net loss of $5.8m on revenue up 52% at $1.9m, compared to a loss of $3m for the same quarter last year. The poor revenue figures for the quarter are mostly attributable to delays in non-recurring engineering fees and the adoption of more cautious accounting methods which delay recognition of royalties from OEM licenses until the products reach the ultimate consumer. Results for the quarter include a one-time charge of $1.5m stemming from the acquisition of Eden Group Ltd (CI No 3,100). Excluding the charge, losses for the quarter would have amounted to the equivalent of $0.29, a slightly better performance than analysts expected. Geoworks will have to outperform the analysts consistently to make it to their stated goal – breaking even by the fourth-quarter of fiscal 1998 and turning a profit shortly thereafter. The First Call consensus predicts quarterly losses straight through to the end of 1999. For fiscal 1997, the company’s net loss was $13.5m on revenue up 77% at $11.1m, compared to a loss of $9.7m last year. The company says it has about $40m in the bank and a cash burn rate of roughly $2m a month, so it can’t be a cash- bleeding cow forever. Geoworks has support in the industry, though, with Nokia, Ericsson and Toshiba, among others, already licensing its Geos 3.0 operating system. Nokia actually has a $7.5m equity investment in the company. Essentially, the future of Geoworks is tied to the future of the handset manufacturers and of smartphones themselves. Nokia sees the future being bright, with smart phones commanding as much as 50% of the cellular market by the end of the decade. Some analysts predict the smart phone market to be worth $2bn – $3bn by 2001 and Geoworks feels that it is well-positioned. Keith Mills, a spokesman for the company, said that it consider itself in a really good place in the market – number one right now. There will be competition, though, and Psion Plc is probably the most formidable, with its own operating systems in the works. It has been a bit cagey about its actual plans, though, which doesn’t sit well with Geoworks. Mills thinks that Psion’s approach might be a little too Microsoft – trying to dictate an OS to an entire market – for the handset manufacturers to swallow, and he thinks they won’t. Geoworks simply wants a level playing field, as in an open platform, and it feels it can excel. Thus far, it’s been a game of hurry-up-and-wait. Geoworks has spent time and money winning pole position, and is now waiting for the race to start. But if Nokia and the analysts are right, there could be a lot of money to be won.

Content from our partners
Green for go: Transforming trade in the UK
Manufacturers are switching to personalised customer experience amid fierce competition
How many ends in end-to-end service orchestration?

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU