Geoworks WAP licensing – fast buck or insurance policy?

2000-10-11

Geoworks, the company perhaps more famous for its small footprint operating system than its wireless credentials, has been coming under fire in recent weeks. Its crime is to enforce a patent, which the company holds on a part of the wireless protocol that is essential to WAP. So – is Geoworks on the make or is it protecting its future?

The problem started back in January, when Geoworks announced its intentions to introduce a licensing scheme for WAP vendors. On the surface the licensing scheme seems reasonable enough. Individual vendors wanting to make use of the Geoworks technology need pay a flat fee of $20,000 dollars per year. If the company in question earns less than $1 million dollars, the fee drops to $25, a veritable bargain it has to be said. It is with the service providers that things get interesting, as the fee equates to $1 per year, per service user. For a company such as Vodafone, which now handles over 10% of the world’s handset users, the sums would become phenomenal. It is unlikely that the larger players will pay the book cost for the privilege of using WAP but nonetheless Geoworks looks set to make a pretty penny on the arrangement. Stock holders certainly think so, with shares doubling in value on the day of the announcement.

Of course Geoworks is not the only company to bring up the issue of licensing. Indeed, the company is a pussy cat compared to some of the larger players in the WAP forum, namely NEC and Phone.com. As a smaller player, Geoworks commands more sympathy: with just over 100 people in the whole company, it cannot afford to be frivolous about its R&D spend. Neither does it have the luxury of giving away key technology for the greater, in this case wireless, good. On the make it may be, but Geoworks has few other options.

Despite the underdog stance, Geoworks has succeeded in putting the cat amongst the wireless pigeons. In an interview with IT-Director.com, Ken Norbury, General Manager of Geoworks in the UK, agreed that the stance was “upsetting to people not in the know.” This was a view echoed by the chairman of the WAP Forum, Greg Williams who said on News.com "I'm not saying at all that Geoworks [tried to take advantage of the process] ... I think what they've tried to do was set a price that is fair and reasonable, as anyone would."

When the annals of IT history are finally written, it will not be the actions of individual companies that count so much as the combined effects. The longer-term necessity for WAP is already being called into question. While Geoworks’ position is understandable, the licensing issue may prove to be the final straw for an already weakening standard.

(First published 11 October 2000)