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Analyst Angle: 10 Israeli companies to watch in 2010

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
Kelly Tedesco is easy to reach on her phone- as long as you send a text message or IM. “Anyone who leaves a voice mail is either a stalker or my mother,” says the 27-year-old from Irvine, Calif. Kelly may be typical of the new mobile consumer. In the US, data services like mobile internet and SMS account for 30% of monthly wireless bills. That number is 50% in Japan. However, unlike the internet REAL money is being spent for these applications and services. Morgan Stanley estimates that 95% of mobile application revenue is derived from e-Commerce and subscriptions. At the Mobile World Congress this week in Barcelona, 72 Israeli companies showed how they intend to reach customers like Kelly. Below is a list of 10 Israeli mobile companies to watch in 2010.

Tunewiki: Serial entrepreneur Rani Cohen wanted to see the lyrics for a Cold Play song while jogging. That simple idea has led to more than 6 million downloads and investments from market leaders like Motorola, TeliaSonera and DoCoMo. According to Rani, “Our Media Player will be available as a white label and some of the biggest companies in mobile will use it as their default player.” Tunewiki is also addressing the sector that represents 42% of all iPhone downloads- games. “We will offer a game that can be easily implemented for any song in any language.”
Fring: Nominated for “Mobile Innovation Grand Prix” at this week’s Mobile World Congress, Fring offers free VoIP calls and IM. In particular, the killer app is free video VoIP. Since launching video VoIP in November, nearly 60% of all Fring calls in Western Europe are now made with video. Fring claims to be adding half a million new users each month. CEO Avi Shechter emphasizes the appeal of always-on connectivity with the convenience of mobile. “Fring is providing the video call experience they enjoy on their PC, on the go.”
Mecanto: Launched a few months ago, Mecanto has won the global Nokia Developers Award and obtained subscribers from 120 countries. It is a technology platform for mobile operators and content aggregators that helps users manage their music services across mobile, PC and social networks. CEO Uri Keren is careful to protect third-party rights. “Mecanto does not allow the sharing of music. Instead, it is a personal music service that extends the reach of my own music across platforms.”
Retalika: Think of the merchandising and customer service experience at your favorite department store. At the moment, those trusted retailers are virtually excluded from the mobile content and services sector, a market projected by Informa to be worth $344 billion in three years. Retalika helps retailers grab a bigger piece of the mobile content and services sector.
Noam Guzman is co-founder of Retalika. “Early adopters have shown a strong appetite for mobile content and services. But the trusted retailer brands and their multiple distribution channels will drive mass adoption. We believe 95% of market growth is still to come.”
Telmap: According to research firm Canalys, as of October, 2009, Telmap owns 46% of the EMEA market for mobile navigation, more than three times the share of Nokia, the #2 player. This dominant position is based on white label partnerships with operators like Vodafone, Orange and AT&T. Motti Kushnir, Telmap’s Chief Marketing Officer, is clear about the company’s goals in 2010- Location Based Services. Among other trends, he thinks location should enrich core operator services like SMS and voice and advocates an expansion in location based advertising, social networking and location services developed specifically for enterprises.
Mobixell: This week, Facebook reached 100 million active mobile users. Moreover, 6 of the 10 most visited US mobile Internet properties last quarter were social networking sites. Clearly, mobile subscribers care about staying connected with their Social Networks on the go. Mobixell is helping carriers to offer tools that add value beyond just transporting internet traffic. Specifically, their social media gateway (SMG) provides a mobile Internet experience for social network users but via MMS. That means over 80% of the mobile subscriber population can have what Avichai Levy, EVP Marketing, calls a ‘rich media mobile internet’ experience. Trials with two of the largest US carriers will begin this year.
Communitake: Communitake uses Smartphones as a remote customer service tool. Imagine having a remote service representative that can visually guide you through a billing issue or transaction on your smartphone, pausing throughout the process to draw red circles around key words or underline important instructions. CEO Ronen Sasson thinks that could translate into higher customer satisfaction and more purchases across industries. “Improving the customer experience leads to increased use of new services.” Two of Israel’s three mobile operators are now deploying the product.

Waze: Waze provides a free, crowd-sourced, real-time mobile navigation tool that is based on the live conditions of the road. More than 550,000 users worldwide are using this to navigate traffic and adjust their routing. CEO Noam Bardin views the social aspects of Waze as part of a larger transition. Just “as the Internet is replacing newspapers, the mobile phone will replace drive-time radio as our source of relevant information for our everyday commute.”
Perfecto Mobile: One of the biggest expenses for independent developers is testing applications across a multitude of handsets, carrier networks and operating systems. The time and resources required can be staggering. Perfecto Mobile provides a low-cost, virtual tool for testing applications with Web and video tools. Partnerships with Vodafone, RIM and Sony Ericsson have helped to expand their customer base. Eran Yaniv is the CEO. “As entry barriers are lowered, more developers now develop a growing number of mobile applications. We are there to help them test their apps on real devices and ensure high quality, without spending huge amounts or purchasing many devices.”
WorldMate: Travel is the largest online e-Commerce segment but until recently has been relatively nascent in mobile. The WorldMate application has been downloaded 5 million times with 1.25 million active users. CEO Nadav Gur believes the use of Smartphones for travel information and booking has finally gone mainstream. “There is now a race by the giants in travel – from American Express and Expedia to Delta and Hilton — to own this medium.” It is exciting to be “working with partners from both mobile and travel to build new lines of business.”
Levi Shapiro is a Partner at TMT Strategic Advisors, a research and strategy firm focusing on the technology, media and telecom sectors. Clients are split evenly between early-stage, Israeli start-ups and large entities like NTT DoCoMo, OpenTV and the Australian government.
During a 15 year career in media and technology, Levi Shapiro has launched new business units (IBM), new technologies and services (Toyota) and entirely new companies (Two Minute Television, Snack Mobile, etc).
Mr. Shapiro founded and sold two mobile start-ups. In addition, at research firm Telephia he grew the m
o
bile audience measurement practice in Lo
s Angeles from zero to sale. Levi began his career with Toyota in Japan and China, worked as an Associate in venture capital firm “Doublespace” and earned degrees from Tulane (BA), Cornell (Asian Studies) and MIT (MBA). He speaks Japanese, Chinese and Italian.
Mr. Shapiro is an Adjunct Professor at UCLA Extension. He is also an Angel investor and sits on the Advisory Board of several digital media companies. In his free time, when not roller-blading near his home in Venice Beach, California, Mr. Shapiro writes a weekly column about digital media for the Jerusalem Post called “Unleavened Media”. He can be reached at levi.shapiro@tmtstrat.com or via twitter: @levshapiro

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