Emblaze Systems has announced it has moved into loss from profit in 2001 and does not think the market will become more predictable until at least 2003. For the year ended December 2001 the company’s turnover decreased to $23.3 million (2000: $30.7 million). Emblaze blamed the loss on the closing of deals being delayed due to the slowdown in the telecommunication sector capital expenditure and the overall economic downturn.
Commenting on the results, Eli Reifman, Chief Executive Officer of Emblaze, said:
Two years ago, carriers were treating rich media personal communications as futuristic and even somewhat science fiction. In 2001 there was a dramatic change as Emblaze went from almost zero interest in its solutions to over 100 carriers (representing 30% of the market) requesting trials and tenders. The market has formed very rapidly and still continues to develop with increasing pace. Handset manufacturers such as Nokia, Ericsson, Motorola, Samsung have already announced their entry into the mobile media field and have begun to market aggressively media based mobile devices that are essential for launching media based services (Nokia 7650, Nokia 9210, Ericsson T68, Samsung VOD etc).
2001 will be remembered as a year of significant global economic downturn that has greatly impacted the telecommunication sector, to the point of causing major bankruptcies, and creating unprecedented levels of uncertainty that have caused a freeze in operators’ capital expenditures. Along with many others, Emblaze has also been hit by this, experiencing a sudden and dramatic delay in closing contracts and, hence, in booking revenues.
Regardless of these events, the level of activity is increasing with significantly more trials and tenders and the moment of convergence into actual commercial deployments and service launching is nearing. However, last year’s events have been dramatic enough to create uncertainty as to the precise timing of this moment.
This uncertainty makes it difficult for the Group to predict its operational performance in 2002. We prefer to take a cautious approach to our projections this year. Carriers, broadband service providers and handset manufacturers are becoming more and more adamant about launching these services in the next 12 18 months. In spite of our overall optimism and the market trend, we anticipate that the Group’s deal flow and revenue generation will not become more predictable until 2003, when more wireless carriers launch mobile media services and multi media colour handsets become available.
On a final note, it is important to stress that Emblaze is becoming a global company and now has seven offices and over 30 representations in more than 25 countries. The impact of the ongoing situation in the Middle East on our operations has been, and is expected to be, minimal.