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Gadgets & Home Improvement

Making a Blaast in the mobile phone market

Finnish firm to bring iPhone-like experience to feature phones.
The Business Times - June 30, 2011
By: Victoria Ho
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Making a Blaast in the mobile phone market

FINNISH startup, Blaast, wants to be exactly that in the mobile world. It plans to shake up the concept of smartphones and rich apps, bringing the 'iPhone experience' to the humble feature phone.

The secret is in offloading the processing power needed to run rich apps to servers in the cloud.

Where smartphones have sufficient firepower to run rich apps such as games and video streaming within the device, feature phones are left out cold because they often don't pack similar computing or storage capabilities to support these apps.

The company is still in stealth mode and is fairly secretive about its final product, but Blaast CEO, Joonas Hjelt, gave BizIT a few details about its mechanics in an exclusive interview.

Blaast will run its apps on feature phones via a Java client that users can install. Java is mostly ubiquitous across basic phones.

A basic cellular data connection is required in order to use the Blaast client.

'The client takes into account server connectivity dropping, and will cache activity,' he said, adding that this is especially important in developing markets where network access is not always reliable.

Mr Hjelt said that the company has ported several 'safe bet' international apps over to its platform on its own, but is hoping to get a larger base of developers onboard to grow a fuller selection of apps eventually.

In order to entice developers to join, it makes its software development kit (SDK) available for free.

Apple makes its SDK available for free, but developers have to pay US$99 a year for their app to get listed on Apple's App Store.

Android has a lower one-time registration fee of US$25, which it says is in place in order to curb spam apps.

But, in the markets where feature phones reign, even that US$25 is too much of a deterrent to budding developers, said Blaast chief operating officer, Vesa Kemppainen.

As for revenue, Blaast plans on allowing users to subscribe to a monthly plan in order to use any of the apps on the platform.

Developers will get a cut of that subscription fee based on how often and how long their apps are used.

This is a departure from the existing mobile app revenue model, which charges users per app downloaded. Both the iPhone App Store and Google Market give developers a 30 per cent cut of the app selling price.

Mr Kemppainen said that this model is unsuitable for developing markets.

'The iPhone itself is not realistic for the vast majority, because it is too expensive,' he said.

As a result of its target audience, it is small wonder that the company has been pushing in earnest in Asia, and is active especially in Indonesia, where it is courting local developers for the domestic market.

Mr Hjelt said that Blaast will serve its apps to the region out of servers located in Singapore, and has plans to procure server space in other locations.

'Look at the map of where the next billion users are at,' he hinted.

Besides the fee charged to users for subscription, Blaast has an ambitious plan to rope in telcos and roll out Blaast-equipped phones and plans together.

It's a no-brainer for telcos, said Mr Hjelt. The average feature phone user is a low ARPU (average revenue per user) earner for a telco because they only use basic services such as voice and SMS.

They hardly have data plans because the experience of surfing on a feature phone is too unfriendly to justify the cost, he pointed out.

'Apps are what keeps phone addictive, not mobile websites.'

With feature phones theoretically 'upgraded' with Blaast, users would more likely want to subscribe to beefier plans with telcos in order to get data plans - a great way to up ARPU within this pool, he explained.

Blaast first made a ripple in the tech blogosphere in March, when word of its substantial seed funding leaked.

Moaffak Ahmed from Veturi, one of the firms participating in the funding, confirmed that it raised a first round of US$3.7 million.

He estimates that even in developed markets such as the US, there are about 100 million feature phones that are ripe for Blaast's offering, as well.

'But we are not targeting the US as the first market,' he noted.

China isn't likely one of the first to get Blaast either, for a number of reasons including some of the barriers to foreign businesses getting a foot in the door there, he said.

Mr Kemppainen said, however, that one way Blaast could get into China is through working with phone manufacturers there to integrate the platform into devices that are fresh out of the oven into the domestic market. This is an arrangement the company is exploring now, he said.

Blaast, which had about 20 people a few months ago, now has 30 employees and is continuing to hire, said Mr Hjelt.

It probably needs to scale up as soon as it can. It is slated to launch within the quarter, and has a huge pool of feature phones in the world as a potential market.

Qualcomm's senior director of business development, Liat Ben-Zur, said earlier this year that half of the world's phones are still going to be feature phones in 2014.

Blaast competes with another Java-based application platform, Snaptu, which is also distributed on feature phones and runs a number of apps within it.

The Israeli company boasted a pool of 10 million users mid-last year.

It probably isn't going to compete head-on with Blaast for much longer, however. It was snapped up in March by Facebook for an estimated US$60 million to US$70 million and will likely transform into a way for Facebook to bring its own apps to mobile phones.

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