Emblaze First Else Smartphone Axed; Intuition UI May Be Licensed

Fledgeling touchscreen smartphone UI developer Emblaze has axed its First Else handset, citing "critical delays in deliveries and the current status of the project."  The First Else was to be the first device to use the company's one-thumb interface, Intuition, promising single hand ease of use with a new, semi-circular options wheel.  The First Else itself had specs much in line with the rest of the smartphone market, perhaps adding to Emblaze's concerns they wouldn't be able to sufficiently position the handset as distinct.

However, this might not be the last we see of the Intuition UI, since Emblaze is now apparently looking for licensing opportunities which could see it used on other devices.  Trimming away the hardware project leaves them to focus on their software skills, which include video conferencing and push-messaging, and to chase Apple over alleged IP infringement.

[via Engadget]

Press Release:

Ra'anana, Israel, 30 June 2010 – Further to the management statement dated 18 June 2010, Emblaze is hereby providing the following updates:

ELSE Mobile

In October 2007, the Company announced that its subsidiary, ELSE Ltd. (formerly

Emblaze Mobile), partnered with ACCESS CO. LTD and Sharp Corporation, embarked

on an ambitious project targeted to introduce an innovative approach to mobile

experience.

In November 2009, ELSE first unveiled the First ELSE# mobile device, which was

designed to showcase the capabilities and advantages of ELSE Intuition#, its

new Linux based mobile platform.ELSE's products attracted excitement and

interest from potential partners, as well as the media and mobile analysts, for

its unique innovation and user experience.

ELSE' management have since invested considerable time and effort to secure a

partnership for the sale of the First ELSE mobile devices. While there was

encouraging interest in the device by potential partners, management was not

able to confirm a deal on terms acceptable to Emblaze to proceed to the

production of the device.

Due to critical delays in deliveries and the current status of the project, the

board has now decided to cease any further investment towards manufacturing of

the First ELSE mobile device and to concentrate efforts only on licensing the

ELSE Intuition platform and technology in order to realize its potential

upside.

This decision will drastically reduce the Company's operational and development

costs and will positively contribute to its route to profitability.

The Company's management believes that this decision aligns well with the

Group's overall core competency and skills in the software arena, which

includes the following:

Formula Systems

Formula Systems, through its subsidiaries, is engaged in the development,

production and marketing of information technology solution and services. Its

appealing offerings coupled with aggressive cost-saving measures have made

Formula resilient to the recession and enabled its constant growth in revenue

and net income. For the period ending 31 March 2010, Formula reported

significant improvement in profitability with net income attributable to

Formula of $4.8 million, an increase of 41% compared to $3.4 million in first

quarter of 2009.

Going forward, Formula will continue to focus on profitability as well as

accretive acquisitions.

Emoze Ltd.

Emoze Ltd. is providing transparent, synchronized mobile push-messaging

solutions that include email, PIM (contacts and calendar) and a push content

platform for consumers, mobile operators, manufacturers and enterprises. Emoze

eliminates the need for mobile devices to check or poll servers, allowing for

real-time messaging on a far wider range of mobile devices.

Emoze can actually transform most low-end mobile devices into BlackBerry -like

devices, providing the same push mail, PIM and content service. Thanks to its

novel and efficient technology, Emoze is able to provide the ideal low-cost

push solution for the mass market.

ZONE-IP

ZONE-IP Ltd. of which Emblaze holds 71%, is engaged, through its subsidiary

Emblaze VCON Ltd., in the development and deployment of high-performance,

end-to-end videoconferencing solutions over IP and ISDN networks for

enterprises of all sizes, focusing on desk top solutions.

The Company would like to use this opportunity to provide update on additional

ongoing matters as follows:

Patent infringement:

In December 2009 the Company informed the market that it has notified Apple2

Inc. that the HTTP Live Streaming Application announced by Apple and its use in

Apple's iPhone and iPod2 touch (and recently in the iPad) devices, infringes

Emblaze's patents for media streaming technology. In February 2010, the Company

also notified Microsoft Corporation that its Smooth Streaming system infringes

on Emblaze's patents for media streaming technology.

The Company is currently engaged in discussions with both Apple and Microsoft

with the aim to reach an amicable resolution by licensing said IP. The Company

will evaluate its course of action pending the results of such discussions and

will provide an update to the market when it is appropriate to do so.

HM Revenue Customs

As reported by the Company in April 2007, the Company's UK subsidiary, Emblaze Mobility Solutions Limited, is involved in a dispute with the HM Revenue Customs ("HMRC") regarding a decision made by the HMRC to withhold VAT reclaims and raise an assessment relating to VAT return in the sum of approximately £8.8 millions. The legal proceedings in this matter are still ongoing and it is expected that the closing submissions will be scheduled for July 2010. Further update will be provided following developments in this

matter.

Malam claim

On 7 March 2001, Malam Systems Ltd. filed a claim against Geo Interactive Media

Group Ltd. (now Emblaze Ltd.) and against its founding directors claiming for

approximately 29% of the Company's issued share capital. The Company's legal

advisors as well as its founding directors were (and still are) of the opinion

that there are no merits to the claim. Nevertheless, the Company's board of

directors decided to settle this claim by payment of US$1 million by the

Company as the legal costs alone were expected to reach such an amount. The

Company expects to recover part of its payment from its insurers.