New software coming today from Aether

Company hopes Aether Fusion brightens its future

Shares push higher

Launch is called `as significant news as we've ever made'

April 18, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

Aether Systems Inc., one of the most-watched new technology companies in the Baltimore region, plans to unveil a new product today that it hopes will elevate the company at a time of great uncertainty in the wireless communications market.

Aether will launch a major national marketing campaign around a product it calls "Aether Fusion."

"We hope Aether Fusion becomes for Aether what Windows is for Microsoft," said spokesman Greg Abel. "This is as significant news as we've ever made."

The Owings Mills company has taken a hit in recent months, along with the rest of the wireless communications sector. Its shares dropped from a high of $216 in June to a low of $8.88 early this month. The shares rose 73 cents to $16.08 yesterday on the Nasdaq stock market, and then went on to trade above $17 after hours.

Aether also has seen its investments in other wireless companies shrivel. And the company announced Monday that revenues in the second half of 2001 will be lower than previously forecast - a pre-emptive bit of news that the company hoped would lessen some of the sting when it reviews finances with about 100 analysts today at the Willard Inter-Continental hotel in Washington.

But Aether contends that the down market is a good time for its latest product launch with corporations more discerning about their spending on information technology.

"IT spending is definitely down, but companies still have budgets for things like this, especially if they have an extremely mobile work force that's out of the office 80 percent of the time," said Cynthia Hswe, an analyst with Strategis Group, a Washington-based marketing research firm.

Most of Aether's products have been designed for specific customers in industries such as finance and government. Its products help brokers track stocks on Palm pocket-size devices and Seattle police retrieve crime records from computers in their patrol cruisers.

But Aether Fusion is more adaptable software that the company says can be used with any wireless device, from cell phone to pocket PC, and with any of the various wireless technologies, such as Bluetooth or WAP.

Larry Roshfeld, a senior vice president for software products at Aether, said the company hopes Aether Fusion will help it move to the forefront once wireless communication becomes as prevalent in the United States as it is in Europe and Japan, where a teen-ager e-mailing a friend on a cell phone is as a common as a kid listening to a Walkman in Baltimore.

Aether plans a national marketing campaign, including a five-city tour to pitch its new product to corporate chief technology officers. It expects many of the 100 companies that are licensed resellers of Aether software to become resellers of the Fusion brand.

"They are one of only a small handful of companies that can provide a comprehensive solution, a one-stop solution. Their competition will be companies like IBM and Oracle," said Carl Zetie, who tracks mobile information systems for Giga Information Group, a Cambridge, Mass.-based research firm. "They've acquired a lot of technologies; they've developed a lot of technologies; and they really had to sit back and catch their breath and integrate their products.

"This will make it easier for customers to understand what they do," Zetie said. "Plus, they still have several million dollars in the bank. That's a huge advantage."

The company went public in October 1999, nearly four years after it was started by David S. Oros, a former Westinghouse Electric Corp. executive. Aether raised $110 million in that offering and an additional $1.5 billion in a second public offering in February 2000. Aether had more than $800 million in cash at the end of last year.

It said it expects to have $500 million in cash during the third quarter of 2002, when it projects to break even.

"What Fusion does is take a lot of the time and cost out of deploying wireless applications," said Warren Wilson, an analyst in Seattle who reviewed the product as it was being developed for a Boston-area research firm, Summit Strategies.

Aether "is getting out in front of an important market trend," Wilson said. "This is a time when a lot of wireless technology players aren't well-funded, so some guy wonders whether the company that sold him a solution today will still be around tomorrow. Aether will be."

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