Birdstep Technology has announced it will be selling off its software development and marketing arm to one of its competitors in the WiFi offload arena, Smith Micro Software, for $2 million.
Sweden based Birdstep is best known for its ANDSF (Access Network Discovery and Selection Function) implementation, a method for dynamically selecting the right network, at the right time, based on network conditions and a centralized MNO policy. It can switch between 2G, 3G and 4G, as well as different types of WiFi. Smith Micro’s NetWise product works similarly to this, by using policy-based algorithms to redirect mobile traffic at the device level. This is essentially all about saving the network when it is congested.
As part of the agreement, what’s left of Birdstep will be given permission to distribute Smith Micro’s products, including those from the newly acquired arm, in the Nordics, in collaboration with Teki Solutions. Birdstep and Teki Solutions will evenly split the proceeds from this arrangement. The acquisition is subject to approval of Birdstep shareholders, and is expected to close on 1st April 2016.
Birdstep has found itself in a difficult situation after losing its contract with Sprint in November 2015 – which accounted for 87% of its 2015 revenue. The company says that following this, its financial situation has become “critical”, and by selling off its software development and marketing business this guarantees a future for its technology and for its employees.
Also this week, Birdstep has entered into a letter of intent with holding and investment firm Middelborg, to investigate a potential merger with a subsidiary of Middelborg yet to be established. This is expected to complete during Q2 this year.
For video optimization, Birdstep offers a smart analytics packages to mobile and fixed broadband operators combining data from the device and from wireless domains – both WiFi and cellular. Here data can be collected about what the user is watching, what the network is and how well the video is being displayed. Operators can observe what impact an app is having on battery life of a device and then take the relevant action to improve that, for example, by implementing intelligent WiFi power management.
In January 2015, Birdstep sold its Finland based subsidiary Birdstep Technology Oy (Secure Mobility) to Elektrobit Technologies so that it could further its focus on Smart Mobile Data. This sale was intended to allow Birdstep to concentrate on growth by expanding geographically, developing its product portfolio and strengthen its position in high growth markets.
“Birdstep has been our primary competitor in policy driven solutions designed to optimize the utilization of wireless networks,” said William Smith, president and CEO of Smith Micro Software. “Birdstep has a presence in APAC and EMEA that will enable us to reemerge and expand our customer base in these markets. Operators and OEMs that use Birdstep solutions will benefit from a stronger combined portfolio and roadmap, and the confidence of gaining a partner with decades of experience and innovation in wireless software.”
Ian Jenks, Chairman of the board of Birdstep, stated, “we are very satisfied that we, as part of the deal with Smith Micro, has managed to create a strong industrial partnership that could create value for Birdstep’s shareholders going forward. Teki Solutions has a number of high quality customer and supplier relationships where Birdstep’s and Smith Micro’s technology has an interesting potential.”
Birdstep had sales of around $6.8 million in 2015, and Smith Micro saw sales of $39.5 million, up 7% from the previous year.