OmniSky Reorganizes to Save Money

Posted By: Ed Saturday, July 28, 2001 1:52:53 PM

OmniSky, the wireless ISP, has revealed that it expects to have between $4.6 and $4.7 million in revenues this quarter. Unfortunately, they expect to lose between $19 and $21 million in that same period. Still this is better than expected. They are cutting their global workforce by nearly 100 employees, mostly by reducing its European workforce and closing several European offices. Before this and other cost-cutting steps were taken, they were expecting to lose between $41 and $43 million

Despite major cutbacks in Europe, they still intend to deliver their applications and services throughout the continent. They are nearing the end of beta trails in both the United Kingdom and Germany.

The company has restructured its business, forming a consumer unit focused on the company's target market of mobile professionals and its ASP service known as OmniSky Oxygen.

"We will continue to closely monitor our operating and capital expenditures as we move to support our ASP business," said Lawrence Winkler, CFO. "The actions we've taken significantly reduce our cash burn while we continue ongoing discussions with vendors and partners to raise the capital necessary to take us to profitability."

In late May, News Corp. gave the company a boost by increasing its stake from 10% to nearly 20%.

Permalink |

Article Comments

(16 comments)

The following comments are owned by whoever posted them. PalmInfocenter is not responsible for them in any way.
Please Login or register here to add your comments.

Comments Closed
This article is no longer accepting new comments.

Omnisky is a great company

I.M. Anonymous @ 7/28/2001 2:06:19 PM #

It's just hard times, man.

Omnisky UK will not deliver a consumer servie

I.M. Anonymous @ 7/28/2001 2:35:36 PM #

Members of the Omnisky UK beta trial received this email:

"We are nearing the completion of our beta trials in Europe and have determined not to continue with a consumer-focused offering under the OmniSky brand. We regret any inconvenience this may cause for you, our valued customer. We intend to use the valuable insights you have provided during the beta trial in the services platform we anticipate offering to wireless carriers, online service providers, hardware manufacturers and others that may deliver wireless services to European consumers.
The OmniSky European service will be discontinued on August 3rd, 2001.
We would like to take this opportunity to thank you for your participation in our beta programme, and to wish you every success in the future."

A great shame. Unfortunately in the UK all the data travels over the GSM network, with high call costs - I guess they found it hard to come up with a price structure similar to their US operations that people were willing to pay.

Lost sale

Cheetah @ 7/28/2001 10:41:39 PM #

My one experience with OmniSky is when I tried to purchase a unit for testing for my company. I called them and asked to order a modem with a Purchase Order (P.O.). They said they can't take a PO.

I told them there must be some way to order with a PO since most companies require this. They said no.

I told them I was testing and if I liked the product that I would be purchasing 600 for my company. They said no.

I didn't buy the unit and they lost a big order.

With that type of business practices, I'm not surprised they are doing poorly.

RE: Lost sale

I.M. Anonymous @ 7/28/2001 11:22:24 PM #

Not that Omnisky is like a cell phone (it's not- it's an ISP) Can you get a cell phone with a PO? How about an ISP? How about a wireless ISP?

...As a salesperson, I wish I had a nickle for every dollar that was promised.

A bird in the hand...

RE: Lost sale

Cheetah @ 7/29/2001 3:50:37 AM #

My company buys cell phones with a purchase order just about every day. It's called a "corporate account"

RE: Lost sale

I.M. Anonymous @ 7/29/2001 12:57:22 PM #

Yes - they seem to be missing some standard business practices. Our company will reimburse for such costs, but only with an invoice or receipt. Omnisky said it could do no such thing - they could only bill a credit card.

RE: 1st

Ed @ 7/29/2001 10:05:32 AM #

I'll stop deleting your posts as long as you can keep them on topic. "I posted first!" isn't on topic and not popular with other reader or funny to anyone but you. Have you have been to those sites that the first ten comments on every story are "I posted (first, second, third...)" Fortunately, so far you are the only person playing this game and I'm trying to keep it that way. As long as you put something intelligent in your comments, I leave 'em alone. Truce?

---
News Editor
Palm Infocenter

RE: This is from the deleted account

JET8810 @ 7/29/2001 12:05:40 PM #

well said, Ed. Very well said.

Omnisky Troubles

I.M. Anonymous @ 7/29/2001 2:13:53 PM #

I hope Omnisky reads this thread.

I've been an Omnisky customer since February. The service is fast and reliable. The only thing I really hate- and is about making me cancel- is the modem limit and the iPaq mess. I'm attempting to sell my Minstrel V on eBay to get an S for my Prism. I originally wanted one for my iPaq, but $40/month is more than enough for the spotty CDPD coverage than 60/mo. This isn't Ricochet; it's not worth $60/mo for a single device. A friend of mine is paying that for his iPaq. So they say that "iPaq users log on more". I've logged on more than my friend ever did with my iPaq. Some days I literally drained my Vx's battery from using that Minstrel continuously. think it's a poor excuse, and simply a way to make users pay for the "discount" they're getting on the PC Card Sleeve and modem. If they want to cut costs use the CF Sleeve and Enfora PocketSpider like they're doing with the Cassiopeia.
On another note, I like the OmniSky service, and it's better than GoAmerica. I think that I still am going to cancel Omnisky within the next week because I'm sick of paying for service that I'm not using right now, and I can't believe they want to charge iPaq users more. I have a Cassiopeia I could use for $40/mo, or the Prism that I'm typing this on. I'll stick with the Prism until the iPaq rates drop, because I can get a VisorPhone for $50 and 400 minutes of service for $40. Much cheaper, and double as useful.

The Problem With Wireless Providers

I.M. Anonymous @ 7/29/2001 3:39:44 PM #

The main problem with Omnisky or Palm Net for that matter is that retail outlets don't support the devices. I live in a large metropolitan area (SoCal). I've gone to many retail outlets (Staples, Best Buy, Office Depot, Comp USA) and none of them have a Palm unit with either Omnisky or Palm net up and running so that a prospective buyer can test drive the unit. It is pure stupidity that these providers believe that people are going to invest hundreds of dollars sight unseen on one of these unit, without spending some time web surfing in the store. Until they get this (which is taught in Sales 101) they are going to have problems.

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/29/2001 4:00:01 PM #

Not an excuse if a phone call (to cancel the service) and a visit to Post Office (to send back the Modem) are not too troublesome. You have 30 day to try it. I did it and cancelled it and returned the modem before 30 days.

The question is why people need a wireless data service which costs extra $$ when they have cellular phone which they use much more. A smarter way to do business is to bundle the voice and data service in the same service plan which have been provided by some cellular service provider (especially GPRS and 3G).

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/29/2001 11:57:51 PM #

You are correct, for someone that is PDA-savvy, buying (and returning) a wireless modem should be no problem. But there is an untapped market out there of people that do not even know they need a PDA. If they can surf the web on a PDA at a retail outlet, they may realize that this is something that they could use, or better yet need. The wireless providers just do not have a clue as to how they need to "wow" prospective buyers. I was at Staples in west LA yesterday, the PDA displays (Palm, Handspring and Sony) were ragged. Not one PDA worked, and the sales reps were worthless. If you want to sell more Prisms, you need to show off their wonderful screen. If you want to sell more VIIx's you need to show off the Palm Net service. This past six months have been brutal for the PDA manufacturers, bleeding money. Given their woeful retail marketing, it's no wonder.

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/30/2001 11:55:16 AM #

See your points. Excellent opinion.

Now the very basic question is why people need PDA? Then the question after that is why people need to surf the internet on their PDA? Then the following question is that why people want to pay that much money for surf the internet WIRELESSLY?

Look at i-mode service in Japan, I think bundling the vocie and data service in the same device makes more sense (and much easier for ordinary people). Try to image a house wife step into the store and the sales person tells her that she can get a cellular phone (which most of the people know what it is and know how to use it), and also she can send & receive emails (which is also becoming popular), then she can also get the real time stock, weather, movie..... information using the same device, and those services are in the same package. It seems to be more understandable to a ordinary person, rather than tell them to get a modem, then sign on a service, and do some setup and then pray.

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/30/2001 2:44:53 PM #

Thanks, you are 100% correct. The all-in-one cell phone/web solution will be difficult for the pure PDA manufacturer to compete with. Add to that the fact that they are much better at marketing their product and it is not too difficult to forsee the future.
It will be interesting to see how the next generation of cell phone/PDA/web browsers (example Motorola Acompli), due out 4thQ2001, performs in the market place. If the cell phone provider sales locations aggresively push these products, it may spell big problems for Palm, etc.

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/31/2001 4:40:56 PM #

Has anyone tried to use a cell phone for e-mail? I tried once and it was extremely frustrating. I'm a tech savvy person and can't imagine my wife (or any other normal person) ever putting up with doing e-mail on a phone. Even a few lines of text would be annoying. SMS -- OK for canned responses I guess. But real e-mail? With the tiny screen and painful text input methods? I use a small Nokia for voice and the Palm Vx/Omnisky for e-mail. Works great. But no one has developed a combo that makes sense to me. Am I alone here?

RE: The Problem With Wireless Providers

I.M. Anonymous @ 7/31/2001 6:58:46 PM #

Lets say this, forget about cellular phone and PDA, lets imagine a device with, say, 1/2 of the Palm PDA screen, with voice & data service althogher.

Of course, some people want to surf the full size internet on their handheld device, but I doubt that is what everybody needs. Some simple text message is pretty much OK for daily important information.