Myriad focuses on low-end phones, buys UK’s Synchronica

Not everyone wants or can afford a smartphone, but that doesn’t mean they don’t need some of the key functions that comes with these app platforms — browsers, messaging and social tools, for example.
Monday saw some consolidation in the industry supplying these capabilities for low-end phones, with Swiss handset software company Myriad Group hoovering up Synchronica, the UK-based mobile messaging firm, for around £24m ($38m). The result, they say, is the world’s biggest mobile social messaging firm.
Both companies do a lot of business with carriers, supplying white label software that those operators can then preinstall on handsets and brand as they wish. Although it also helps carriers build Android apps (s GOOG), one of Myriad’s core services is in providing simple tools to let even cheap phones hook into social networks such as Facebook and Twitter. Synchronica’s forte is in mobile messaging, again allowing non-data-enabled devices to work with push email and social networks.

This deal will create a powerhouse in the rapidly growing sector of mobile-social convergence,” Myriad CEO Simon Wilkinson said in a statement. “It will establish a global service organisation serving over 100 carriers and 25 [manufacturers] around the world. At a stroke, it increases the addressable base for our award-winning product portfolios to over 1.8 billion subscribers with pre-installation of our products in over 100 million new devices each year.”

Those are big figures, and if you look at the histories of the two companies that’s no surprise.
Myriad was formed in 2009 through the merger of Esmertec and Purple Labs, a big name in the early days of mobile Linux development. Purple Labs had already absorbed the mobile team from French handset maker Sagem and bought in the handset client software division of Openwave (the one that’s suing Apple and RIM over patents). Crucially, the Openwave deal brought in the Openwave Browser (now called the Myriad Browser) which has been installed on 2.5 billion low-end devices.
Now add to that Synchronica’s widely-used push messaging, synchronization and backup software. Synchronica has made plenty of acquisitions of its own – most recently of Nokia’s messaging business (s NOK) and Neustar’s instant messaging portfolio – and the result is the kind of subscriber base Wilkinson’s talking about.

Operator branded software the norm… for now

The nature and price of the Myriad-Synchronica deal (bear in mind that last year’s Nokia buy alone was worth $25 million) speaks volumes about the future of operator-branded handset software. It’ll stay the norm on very cheap devices for some time yet… but anyone jumping onto the smartphone bandwagon gets to choose their own apps — they don’t need preinstalled stuff. And smartphones are gradually taking over even that low end of the market.
That doesn’t mean, of course, that operators are giving up their fight to be the intermediaries of the mobile software world. Myriad and Synchronica’s customer base includes ATT (s T) Verizon (s VZ), Vodafone (s VOD), Telefónica (s TEF), Orange (s FTE), T-Mobile (DT), América Móvil (s AMX), NTT Docomo (s DCM) and many others, and it’ll be doing good business for a while yet.
I’ve asked for further details of how Synchronica’s product line will fit in with what Myriad already provides, but it’s certain that the combined operation will continue targeting emerging markets in places such as Africa and Asia.
(On a related note, Openwave seems to be getting out of the product game itself, selling off its remaining ‘mediation’ and messaging products to Marlin Equity Partners. The company said on Monday that it will embark on “a multi-pronged strategy to realize the value of our unique patent portfolio”, so it looks like RIM (s RIMM) and Apple (s AAPL) may soon be joined by other suit victims.)