Category Archives: Mobile

With No Buyer For The ST-Ericsson JV, Chipmaker Cuts 1,600 Workers And Prepares For Divorce


More developments on the grim story of ST-Ericsson, the unprofitable JV between Ericsson and STMicroelectronics that tried to kickstart a semiconductor business in Europe. Failing to find a buyer for the full operation, they will commence splitting up the assets instead, laying off 1,600 employees in the process.

As background, the story goes back to last year, when the two companies decided to call time on the JV, first founded in 2009, and explore strategic options, taking multi-billion-dollar hits in the process, after Ericsson and STMicro both confirmed neither wanted to subsume the entire loss-making business themselves following a review that first started in April 2012. That business in Q4 reported net sales of $358 million, but an operating loss of $133 million, after taking a $1.5 billion write-down in Q3. The story took a further turn a couple of days ago when it was reported that it could become a takeover target for Qualcomm on the cheap after finding no takers for the complete assets.

Then, this morning, the two owners laid out a formal plan for how they planned to split up the assets in a divorce. Ericsson is taking on take on the “design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode.” ST, meanwhile, will assume all other products, including some assembly and test facilities. The remaining parts would get closed down.

The 1,600 people getting laid off today are worldwide, the company says, with just over one-third in Europe. In addition to this, Ericsson will be taking on 1,800 employees and contractors, mainly in Sweden, Germany, India and China. STMicro will take 950 workers in France and Italy. They are still looking for a buyer for its connectivity business, employing 200 people — and the fact that they’ve kept that on the table seems to imply that there may be an offer on the table at least.

Once the dust settles on today’s news, it may be likely that the workers transferred to STMicro and Ericsson will also be under review, as those businesses get integrated into their new parents’ operations.

The story of the JV is the mobile infrastructure leitmotif to the bigger decline of the European mobile manufacturing industry over the last several years. While the region remains a very important market in terms of consumers of mobile services, the center of gravity for production and R&D in mobile has moved to China and companies like Samsung, Qualcomm, Google and Apple. Meanwhile, in Europe, once-global leaders like Finland’s Nokia (significantly, once one of ST-Ericsson’s biggest customers) are now on their knees, with others like Siemens exiting handset making years ago, and Ericsson following slowly in Siemens’ path.

Founders Fund-Backed Jawfish Games Goes For Real, Synchronous Multi-Player on iOS (Really!)

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Although playing against someone else in real-time has a kick that nothing else can quite mimic, turn-based multiplayer games have thrived on iOS and Android.

That’s partly because slower data connections prevented studios from having enough confidence that they could provide a fast, twitchy user experience. At the same time, it was questionable whether there would be enough of a critical mass of players to match them in real-time.

But one Founders Fund-backed company called Jawfish Games says it has a multiplayer platform that can pit up to 16 players against each other in a single tournament at the same time. They’ve partnered with Seattle’s Big Fish Games, a privately held casual gaming company that made more than $180 million in 2011, to distribute a game called Match-­?Up!

The title is really a collection of several well-worn classics like a word unscrambling game, a puzzle game that has players match items of three colors in a row and Mahjong. Players advance through a bracket that matches 16 players, then eight, then four, and then — you catch the drift. In keeping with short attention spans on mobile devices, each round is 30 seconds, so a full tournament is only a few minutes long.

At first, the title will be more of a proof of concept. Then the two companies will build it out with more games going forward. Since Big Fish has a library of more than 300 mobile games, there are plenty of titles they could work into Match–Up!

Jawfish took an $885,000 seed round in January of last year and then added a $2.8 million bridge note with participation from Founders Fund. (Yes, I was surprised that Founders Fund — as in Peter Thiel’s fund that wants flying cars, not tweets — backed a gaming company.)

But they did it because of Jawfish’ CEO’s track record. The startup’s CEO, Phil Gordon, has a colorful history. He was the first employee at Netsys, a company that Cisco later acquired for $95 million in the first dot-com era. Then he went onto a championship professional poker career that included stints as a broadcaster on Bravo’s Celebrity Poker Showdown and The World Series of Poker and five books on the game.

“We believe we’re the best in the world at supporting mobile gaming in real-time,” he said. He’s facing down a number of other companies eyeing this area. Zynga expanded its capacity for supporting synchronous multiplayer mode in its arcade games, while other startups like Israel’s Nextpeer partner with third-party developers to offer multiplayer support. Nextpeer often matches up players with a “replay” of their opponent’s gameplay, however.

Jawfish’s platform shows you your opponent’s screen and performance in real-time in a small “Spycam” in the corner of the game.

“It’s such an obvious idea, but it’s an extremely difficult technical challenge,” he said.

Gordon says he’s only partnering with Big Fish Games and isn’t looking to expand his platform to work with other big gaming companies.

Match Up! is naturally free-to-play. If a user wins a tournament, they’ll start accumulating virtual chips that they use later on. They’ll have special tournaments that more experience players can wager more in. “As you build up your chips, you can imagine where this is going,” he said, hinting that players might be able to top-up on extra chips through in-app purchases.