A steep price cut and new revenue-generating features have combined to bring Amserve, the unit of Amstrad which sells the e-m@iler Web/email device, into profit for the first time, the company said on Thursday.
Amserve showed a pre-tax profit of £1m on sales of £6.5m for the six months ended 31 December, 2003, the company said. That compares with a loss of £5.5m on sales of £4.2m for the same period in 2002. The Amstrad business made a pre-tax profit of £6.1m on sales of £23m, compared with a 2002 profit of £5.5m on sales of £19.1m, boosted by strong sales of set-top boxes.
Amserve's move into the black allowed the Amstrad group to post a pre-tax profit of £7.1m for the period compared with merely breaking even for the second half of 2002.
The e-m@iler is a device looks like a large desk phone with a greyscale screen and a qwerty keyboard, communicating via a 56Kbps modem. The original device, launched in March 2000, generated little interest, but Amstrad upgraded it to the e-m@ilerplus in early 2002, adding features such as Web browsing (via a customised version of Microsoft Mobile Explorer) and downloadable Spectrum games. (Read full review here.)
Further updates added features such as downloadable ringtones and a dedicated directory enquiries button. Amserve generates revenues via a charge each time the unit connects to download emails or access the Web, as well as for ringtones or games downloaded and SMS messages sent. The directory enquiries button connects to a single directory service chosen by Amserve; 11 88 66 is currently renting the feature on a 12-month contract. The phone can display downloaded adverts, including full-motion video, and AOL, BT, Halifax, BSkyB and Onetel regularly advertise on the unit, Amstrad said.
A post-Christmas price cut, taking the phone from about £49 to about £29, has had a significant effect on sales, the company said, taking registered units up to a total of 298,000; Amstrad believes about 1.3 million people are actively using the phones. Amstrad had originally hoped that the devices would break even selling at about £100 by mid-2002.
The e-m@iler will get a significant upgrade this year. "In the second half of the financial year there will be a pilot introduction of a new third-generation product which takes us into a new exciting level of technology," said Amstrad chairman Sir Alan Sugar, in a statement. He said the new phones would add more revenue-generating features and would be ready for a Christmas launch.
The company is also expecting strong sales of a Sky+ digital video recorder, to begin shipping in the second half. "I personally believe this generation of product is one of the best innovations to have been introduced in recent years in the consumer electronics industry and I feel that this generation of product will become a standard piece of equipment in homes in the same way as the VCR has," Sugar stated.