Talk Up: Skymobi
Hangzhou based Sky-mobi runs an App Store over feature phones. (Most of these use Mediaktek chipset.) It is the largest of its kind in China. In the twelve months ended March 2010, the company has over Rmb 540 million revenue and over Rmb 120 million in operating profit. But it was not well received in Nasdaq. Its share price plunged 33% off its IPO price (US$8) on its first day of trading (Sky-Mobi, a Disappointing IPO)
The speech is about Songsexperience of getting his company listed in Nasdaq mainly focus on the last few months.Michael said how he addressed investors greatest concerns:
1) operators. In the past, Sky-mobi suffered whenever operators tighten their user protection policies. Song said they are cooperating with the operators.
2) Tencent. Investors are concern if Tencent want to take Sky-mobis business. Song said they are partnering with Tencent, which is moving toward an open platform policy of its own.
3) Android. If more phones use Android operating system, which allows users to freely download apps, there is no need for Sky-mobis App store, which runs on feature phone only. Songs said the rate of decline of feature phone might not as fast as people expected. And, they have an Android plan of their own.
And, how he saw there is no bubble in the mobile internet sector, as this will be opportunities much bigger than the tradictional internet (even 1000 times). In the last three mont! hs, shar e price of Sky-mobile has increase more than 4 times to US$21.67 (closing price last Friday.)
He delivered his speech with such a passion that, right after the speech, I immediate wanted to open my check book and buy some of Skymobis share. But, as I discussed with more people in the industry that day, I started to rethink about this.
Of course, he can make a great speech. That is what they did during the roadshow. They practiced until everything is perfect and tell a great story to investors, said a friend, who is the CFO of an internet company, which listed a few years ago.
The three concerns he mentioned is real, especially the last one: the rise of smartphone and Android. NetDragon just mentioned its 91 assistant has 35 million users. And this is only 90% of all iPhone users and half of the Android phone users in China. A year ago, there are only 3-4 million iPhone users in China and roughly the same or even less Android users.
Sky-mobis strength is still on feature phones, the previous generation products. Even it has a plan for Android, going forward,its dominance will be much less than before.
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