from the desperation,-not-growth dept
Danger, of course, launched its HipTop/Sidekick device way back in 2002 to much fanfare. I bought one the first day it was available, and used it for more than three years. It really was one of the first useful mobile devices for being able to do things like web surfing. However, while the company did an amazing job in designing the device, it made a series of strategic mistakes that have since limited the company's business chances. First, it took an early investment from T-Mobile. Initially, this might sound like a good idea for a device maker looking to have its device offered by a mobile operator -- and, indeed, T-Mobile offers the Sidekick. The problem was that almost no one else wanted to go near it, as they didn't want to help out a rival operator's investment. Danger picked up a few smaller operators, but never could get the device out to a large enough audience.
The second big mistake was in closing off the device. Early on, it didn't even have a developer kit for developers. Once it did, many developers had already moved on to other things. On top of that, Danger/T-Mobile still controlled which apps were available. You couldn't go around Danger/T-Mobile to load whatever app you wanted. That also turned off developers who knew they couldn't just write an app and push for viral adoption. They had to go through the gatekeeper. It certainly made the device a lot less useful. Whereas for other popular platforms there were tons of apps available, Danger had a very limited supply.
While the company built up a modest following, in part by getting famous young celebrities to carry the device (which backfired a bit when Paris Hilton's got hacked), many other devices eclipsed Danger's devices and the company has done little to push its way back into the discussion. It basically just bet on having a really cool design and continually making minor updates to that design. That was strong enough to keep the company afloat, but it's still losing money, not growing very fast, and still incredibly reliant on T-Mobile for a huge chunk of its business. It's certainly not a particularly compelling IPO story -- and it feels like an IPO out of desperation for new capital, rather than an IPO of a company that is growing and has strategic plans in place for the use of a capital influx. Perhaps the folks at Danger saw an opening in a market that's warming up to IPOs, but it wouldn't be surprising at all to later hear that the company ends up pulling the IPO.