Danger Delays Hiptop, Forges Alliances

With the window for the planned August release of the Hiptop Wireless Solution rapidly closing, Palo Alto-based Danger Tuesday
quietly pushed the U.S. commercial release date back to the fall while trumpeting a series of alliances that it hopes will herald
the ascension of a new player in the handheld arena.

Danger — which boasts Apple co-founder Steve Wozniak among the ex-Apple luminaries on its board — designed the diminutive device
to serve as a sort of all-in-one mobile solution. It integrates instant messaging (IM), e-mail, Web browsing, a full-featured mobile
phone, and personal-information management (PIM) capabilities. It can also mount a small digital camera designed by Kyocera.

While it said little about the delayed release, Danger did unveil its first wireless carrier alliance with Bellevue, Wash.-based
T-Mobile (formerly VoiceStream). T-Mobile’s parent Deutsche Telekom is a Danger investor.


The alliance seems to strengthen Danger’s play to make its Hiptop to the consumer market what Research In Motion’s Blackberry device
has become to the enterprise market. Danger has likened its model to the one used to sell razors, in which razor manufacturers
distribute razors cheaply and build a recurring revenue stream with the sale of razor blades.

Wireless operators with 3G networks are key to such a strategy. Danger executives have said that the Hiptop was designed to sell for
about $200, but carriers will distribute the devices and set final pricing. For its part, T-Mobile will re-brand the Hiptop as the
T-Mobile Sidekick. T-Mobile have not said anything definitive on pricing, but reports indicate the company will offer a set number
of cell phone minutes together with unlimited data usage for about $40 a month.


The service will utilize T-Mobile’s recently launched GSM/GPRS network. The network was launched in California and Nevada in July,
and T-Mobile said it will soon offer service in 45 of the top 50 U.S. markets.


Danger also said Tuesday that it is talks with European operator Orange SA — the largest operator in the U.K. and France — which
is also a Danger investor. Danger said it is planning a European release for 2003.

From a technology standpoint, the Hiptop utilizes the ASP model, in which Danger’s servers do most of the heavy lifting
when it comes to processing Web pages and other data, meaning Danger can use less robust components in the device. However, that
also makes the device’s utility heavily dependent on connectivity.

Danger has allied itself with a number of technology partners to push the device. The largest is Intel which is
supplying its new Intel PRO/Wireless GPRS Embedded Module (GEM) for the device, allowing the Hiptop to send and receive data across
mobile networks. The Hiptop will be the first commercially available product to use the GEM products. TTPCom supplied its GSM/GPRS
protocol stack for the device.

On the sound front, Danger forged an alliance with Beatnik, which has licensed its Beatnik Audio Engine for the device. The audio
engine includes a 12-voice MIDI synthesizer, and enables polyphonic ring tones, game sound effects and user-interface sounds.

“As we prepare for launch, we have the relationships in place to deliver this new business and technology model for mobile wireless
services,” said Andy Rubin, president and chief executive officer of Danger. “By leveraging the contributions of our strategic
partners, we are able to focus on our core strengths — the rapid development of cutting-edge technology that appeals to consumers
and is easy for operators to integrate.”


Danger has also developed third-party applications and content support for the device. UIEvolution is providing development tools
and client software for games, and nGame is supplying game content. ActiveBuddy’s BuddyScript technology will extend the
capabilities of the Hiptop’s IM client by providing bots, and Pumatech is providing synchronization technology for the device.


Meanwhile, in a sign that Danger may not be content to allow RIM to keep the enterprise market to itself, the firm also partnered
with SEVEN, which will provide System SEVEN, a mobile data services platform integrated with global operator networks intended to
provide mobile professionals with secure, real-time access to enterprise applications and data.

“A key part of Danger’s business is to enable third-party developers to easily and profitably develop and distribute applications
and content to users of Hiptop enabled devices,” Rubin said. “A compelling set of applications and content developers now plan to
support the Hiptop Development Platform. With the launch of our Hiptop developer’s program later this year, Danger will open up this
opportunity to additional developers who can add to the Hiptop functionality with applications and content that continue to enrich
the users’ experience.”

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