Apion leaves Nokia in the dust to secure WAP technology deal

While some of the bigger names of the Irish high-tech industry have endured a battering on the stock market, one lesser-known…

While some of the bigger names of the Irish high-tech industry have endured a battering on the stock market, one lesser-known private company achieved a significant global coup last week.

Apion, a Belfast-based telecommunications software company, signed a deal to provide Finnish mobile phone operator, Sonera, with its new Wireless Application Protocol (WAP) technology.

Though the deal is only worth around $500,000 (#462,000), the fact that Apion saw off competition from Nokia for the contract is highly significant. Not only did Apion win the contract on Nokia's home turf, but insult was added when Sonera chose Apion despite conducting trials with Nokia's WAP technology.

According to Mr Denis Murphy, managing director of Apion, it has been difficult for Apion to convince the world it has been first to market with its WAP gateway technology.

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"People don't believe we beat Ericsson, Nokia and Unwired Planet. We see it as a David and Goliath thing, where it takes the other guys a long time to turn around. The reality is we would have paid for the contract with Sonera."

WAP technology is widely predicted to become the standard on mobile phones in the next couple of years. It will do for mobile communications what the browser did for the Internet, by allowing mobile operators to feed data through their networks on to mobile phones.

The WAP gateway secures and converts the data from HTML (hyper text mark-up language) to WML (wireless mark-up language), and encodes the information in binary form.

This development is spawning new phones with bigger graphical displays and scrolling devices, and mobile users can expect a range of extra customised services. For example, it will become possible to book cinema tickets, move money between bank accounts, or access stock quotes while on the move.

Apion was one of the original members of the WAP forum, established to develop a universal standard for this technology. Other members include Nokia, Ericsson, Motorola and Unwired Planet. Apion now believes its arrangement with Sonera, makes it the first mobile operator in the world to release WAP services.

This deal is the culmination of a year's intensive product development by Apion's 150-strong team in Belfast. The company is an offshoot of Aldiscon the company bought by Logica for £57 million (#44.89 million) in 1997. It originally operated within Aldiscon as a development house for Aldiscon and Ericsson. After Aldiscon was sold, and its primary shareholders became multi-millionaires, Mr Murphy was charged with making Apion a publicly-quoted company within five years.

From employing 20 people in switching projects in 1996, Apion is growing at around 30 per cent annually, and plans to employ 220 people by September 2000. Last year it had a turnover of £4.7 million, and this is expected to increase to £6.5 million this year.

Apion's board of directors is mainly comprised of Logica Aldiscon management. Mr Gilbert Little and Mr Jay Murray, who originally founded Aldiscon, each hold a 30 per cent stake in the company. Mr Murphy says Apion adheres strictly to the Aldiscon business model.

That model is unique in that it is centred around knowledge and competence development, and operates to a formula that could only have been dreamed by academic idealists.

Apion broadly established itself as a company designing and developing products in the Intelligent Network (IN) marketplace. This is where "intelligence" is separated from core network switches and placed in distributed computer nodes. Its biggest early challenge however was accumulating the necessary engineering expertise in Northern Ireland.

For the first couple of years of its existence the acquisition of knowledge was Apion's primary goal. Modest revenues came from joint development work with Ericsson, but Mr Murphy was working with his team to identify the core skills and technologies required in Apion's chosen marketplace.

"We have spent the last three years simply building skills, competence and scale. Apion invests £7,500 annually in employee training, and we offer the chance to work with cool technology," says Mr Murphy.

The WAP gateway product is Apion's first marketable, commercial product. It was developed on the back of experience gained with SS7 (signalling system 7), the technology which allows computers to communicate with a telephone network, and short messaging project work.

Developing a platform for future products within a niche area is central to Apion's philosophy. One of its unique features is the technology forum. Employees rotate membership, and spend up to three months analysing the industry and identifying technology gaps. Spending up to 20 per cent of their time on R&D activity, they identify potential product opportunities in the telecommunications software arena.

The WAP gateway emerged from this precision approach, and Mr Murphy sees it as just the first of a host of infrastructure products Apion will turn its hand to. Apion's parent company, Aldiscon benefited well from this approach, and when it was acquired had a head start on the opposition of about five years. Apion doesn't enjoy quite the same luxury, with a lead time of just three to six months. However Mr Murphy says this doesn't stop his board of directors continually applying pressure.

He accepts that Apion is becoming a potential acquisition target, but says the board is focused on bringing the company public.

Apion is in the process of building a new site in Drogheda. The move was prompted by the need to draw from the pool of young talent in the Republic, and the proximity to Dublin Airport.

Madeleine Lyons

Madeleine Lyons

Madeleine Lyons is Property Editor of The Irish Times