So, now that Microsoft has acquired Danger at the 3GSM Mobile World Congress 2008 in Barcelona… What does the future of the Hiptop hold?

Well, Honestly… No one knows yet. There aren’t yet enough details out from either party.

It’s too early to tell yet if our future is Microsoft killing off Danger entirely, and releasing “Windows Mobile: Hiptop Editon”.. Or if Microsoft is keeping the Danger name around as well as the HiptopOS around and just giving Danger a well needed swift kick in the ass to get the devices into the realm of current devices (WiFi, Video Playback/Record, GPS, etc.) now that Danger will have the financial resources for the Research and Development along with the Quality Assurance needed for such changes.

But, Why did Microsoft buy Danger? As we saw in the recent SEC IPO filing, Danger was losing money… lots of it. Last fiscal year (That ended September 30th) Danger had an accumulated deficit of $188.1 Million. Did Microsoft come in to be the saving grace of Danger? Or is there an alternative plan? Danger holds the patents to the Backend service, Something that could benefit Windows Mobile users greatly. Is there a chance that Microsoft bought out Danger just to get their hand on those patents? (If the assets of the company were part of the buyout agreement.)

Also, don’t forget that T-Mobile has exclusive rights. What happens to that now? If Microsoft kills off Danger and absorbs it’s assets into Microsoft, does that contract still stand or will we see “Hiptops” on other GSM and even CDMA carriers? Was Danger in a $188.1 Million dollar deficit because they signed a contract to be exclusive to T-Mobile? It’s sure not because they aren’t selling devices. Every time you see someone in the Generation X/Y age range, they usually have some form of a Hiptop/Sidekick. Was the global outreach of the Hiptop not hitting? In other countries, 3G is the standard. Is the deficit because the device isn’t selling overseas due to the lack of 3G?

In this editor’s opinion, Hopefully Microsoft keeps Danger and the HiptopOS around, but just pours it’s financial resources into it to bring us into the current generation of phones in our category and there’s no Zunephone in the works.

There are still very many empty holes, and questions left to be answered. But, this will be a very interesting year for Hiptop fans and users, as well as Danger employees.

As of right now, it’s way too early to push any panic buttons and start to freak out about this… We need to see details of the agreement and future strategies before pushing that panic button.

Edit: Spelling corrections, thanks Aaron.

This JUST in! Microsoft, Inc has agreed to acquire Danger, Inc. Details on the Acquisition are not available, and Danger has not yet released a statement yet. (As of 9:53AM EST)

“Danger continues to provide an effortless and fun mobile experience for consumers,” said Henry R. Nothhaft, chairman and CEO of Danger Inc. “Now by combining our uncompromised application software and powerful back-end service with Microsoft, we can expand our innovative service offerings even further and take mobility to a new level.”

Stay tuned for more information as it comes in.

Source: Microsoft PressPass Mirror of PR Announcement

Update: 11:30am EST: The press release has been removed from Microsoft.com, and there is still no press release on Danger.com. More information as it comes in to us.
(Thanks, Moonrock for the update!)

We can only hope that Hank Nothhaft sobered up from a night of heavy drinking, and filed for an annulment from Steve Ballmer after he read the papers on the desk he signed.

Looks like Danger is going public. They’ve filed with the SEC with the hopes of raising $100 million. We’re still looking through the filing as it’s chock full of interesting information on the company behind these Sidekick devices that have been in our pockets for the last 5 years. More info to come.

How successful is Danger? Try almost a million users and a nice chunk of change generated by those users:

From the introduction of our solution in October 2002 through September 30, 2007, the number of subscribers to our mobile data services has grown to approximately 923,000. Our total revenues have grown from $49.3 million in the year ended September 30, 2006 to $56.4 million in the year ended September 30, 2007, and our service revenues have grown from $38.9 million in the year ended September 30, 2006 to $50.6 million in the year ended September 30, 2007.

Danger expresses their reliance on T-Mobile:

We are substantially dependent on T-Mobile USA, Inc., or T-Mobile USA, for our revenues and if we fail to maintain our relationship with T-Mobile USA or if T-Mobile USA reduces its expenditures for marketing our mobile data services, alters the data plan pricing under which it offers our mobile data services, or offers or promotes competing mobile data services in lieu of, or to a greater degree than, our mobile data services, our revenues would be materially and substantially reduced.

And a whopping 94.5% of their revenue is from T-Mobile (worldwide). They also mention that their contract with T-Mobile will end on December 2008, where T-Mobile will have to renew it should they choose to. (We hope they do)

They also express the fear that Google’s Android brings:

We operate in a highly competitive industry and we may not be able to compete effectively. In addition, recent developments in the mobile device and mobile services markets, such as the formation of the Google-led Open Handset Alliance, as well as the introduction of new wireless technologies and new entrants seeking to gain market share, could harm our competitive position.

And Danger even owns up to the fact that their competitors have a “quicker pace of innovation” than them, one of the main reasons that many of the early adopters have left the Sidekick.

There is a lot of mention of the problems that the Sidekick Slide faced with the recall and delay. There is even mention of the Paris Hilton “hack”.

Even the perception of a security risk could inhibit market acceptance of Danger-enabled mobile devices and our mobile data services. For example, in February 2005, the personal information contained on Paris Hilton’s Sidekick device was disclosed on the Internet. Although investigations into the incident concluded that our mobile data services solution was not at fault, the incident may have raised concerns regarding the security of our mobile data services solution

Some random snippets we found interesting:

The number of our customers’ subscribers using Danger-enabled mobile devices has increased substantially from approximately 136,000 as of September 30, 2004 to approximately 923,000 as of September 30, 2007. Our total revenues have grown from $49.3 million in the year ended September 30, 2006 to $56.4 million in the year ended September 30, 2007, and our service revenues have grown from $38.9 million in the year ended September 30, 2006 to $50.6 million in the year ended September 30, 2007. Since our inception, we have not been profitable. Our loss from operations was $10.3 million, $8.0 million and $11.8 million in the years ended September 30, 2005, 2006 and 2007, respectively and we expect to continue to incur operating losses for the foreseeable future. As of September 30, 2007 our accumulated deficit was $188.1 million. The last day of our fiscal year is September 30.

The strength of our solution is demonstrated by the frequent use of interactive mobile applications and heavy consumption of downloadable mobile content by consumers using Danger-enabled mobile devices. During the quarter ended September 30, 2007, consumers using Danger-enabled mobile devices, on a monthly basis:

• sent and received an average of 3,223 instant messages;
• viewed an average of 481 web pages; and
• sent and received an average of 930 text messages.

Additionally, more than 60% of consumers using Danger-enabled mobile devices purchased downloadable content during the quarter ended September 30, 2007, with each purchaser buying an average of four downloadable content items during the quarter ended September 30, 2007.

Large and growing third-party developer program. In addition to the internal development of our core data applications, we have cultivated a large and growing third-party developer program for the creation of premium applications, content and services to be distributed on our platform. Our third-party developer program is designed to foster a steady and competitive pipeline of premium applications, content and services that we believe enhance the overall consumer experience. Our third-party developers leverage our integrated technology platform and our operator and OEM relationships to commercialize and distribute premium applications, content and services to a broad audience through a single point of distribution. By encouraging third-party development of content for our platform, we are able to continuously extend the functionality and breadth of our offering and enhance the value of our solution. We have experienced rapid growth in our developer program, with more than 50 of our third-party developers publishing an aggregate of 218 games, applications and networked services as of September 30, 2007.

Enhanced content offering. The collection of the premium applications, content and services available to end users of Danger-enabled mobile devices ranges from traditional mobile content, including basic games and ringtones, to highly differentiated applications, content and services, including networked services, multi-player networked games, multimedia themes and productivity tools. As of September 30, 2007, our master catalog of premium applications, content and services included 161 games, 43 applications, 14 networked services, more than 2,700 ringtones and 66 background themes. The premium applications, content and services available to individual subscribers vary by mobile operator, market and Danger-enabled mobile device model.

Employees

As of September 30, 2007, we had 300 employees. Of these employees, 287 were in the United States, 12 were in Europe and one was in Australia. We also engage a number of temporary employees and consultants. None of our employees is represented by labor unions or covered by a collective bargaining agreement. We have not experienced any work stoppages, and we consider our employee relationships to be good.

Hank Nothhaft, the CEO of Danger made a cool $544,000+ this year working for Danger.

SEC filing
via

T-Mobile hardly has to advertise for the Sidekick since the community does it for them. But for some reason they insist on throwing some money to some advertising people to make up commercials that mostly suck.

Here’s the latest one for the Sidekick LX (Sorry for the quality, it’s the only copy I was able to find online):

The one for the Sidekick iD was a little better:

The all time favorite of a lot of the old school Sidekickers is the one they put together for the original BW/CSK model, featuring Johnny Chase:

T-Mobile should hire whoever’s behind this video to do their next commercial:

The girl behind the camera is right, the Sidekick definitely did not work at Burning Man.

Several Sidekick users have reported receiving an email such as this:

From: MAILER-DAEMON@tmail.com
To: user@tmail.com
Subject: [!] Account is over quota
Date: Sun, 18 Nov 2007 10:06:12 GMT

Your account is using 3555K of mail storage, this is close to its 12M storage quota.

Delete unnecessary messages, otherwise new messages may be delayed or rejected!

Obviously the email messages are wrong as the 3555 kilobytes is less than 12 megabytes, but it makes one wonder if a much needed increase in mailbox size may be on its way. Old school Sidekickers remember that the black and white Sidekicks (yes, they used to be black and white!) had a mailbox limit of 8 megabytes for the early adopters. Later on the size of the mailbox was dropped down to 6 megabytes for people that started up new accounts. With today’s pictures and emails getting larger and larger, and disk space getting ridiculously cheap you would think that T-Mobile and Danger would keep up with the times. To give some sort of idea of how ridiculous a 6 megabyte inbox is these days, the cost of a 500gb is approximately $100, this means that it costs $0.20 per gigabyte of storage. For the non computer geeks out there, 1 gigabyte = 1024 megabytes (or 1000 megabytes if you’re a harddrive manufacturer). This puts the cost of a megabyte of storage at about $0.0002 per megabyte, or $0.0012 for your entire inbox on Danger’s server. Sure, flash based storage on the device is a bit more expensive, but who wants to store all that data on the Sidekick? T-Mobile and Danger should let us store the actual contents of older emails on the server, but still allow them to be retrievable via the network. Or maybe they should let us save the emails to the miniSD or microSD card where you can have 4 gigs of extra space? After all you can only send about 10-12 pictures taken by the Sidekick before your sent box takes up your entire mailbox. Wake up Danger/T-Mobile, its almost 2008.

Looks like T-Mobile has done the right thing and instead of continuing to sell defective Sidekick Slides, they’ve pulled them for the time being. No word yet on what they’ll do to remedy the problem in the long run, but they are offering free upgrades to the blue Sidekick LX for users that are reporting the Sidekick Slide resetting issue. Here is the official word from T-Mobile (via BGR):

“T-Mobile USA suspended sales of the T-Mobile Sidekick Slide™ on Friday evening, Nov. 16, after Motorola – the manufacturer of the device – confirmed that some devices may inadvertently power off when the slide door on the front side of the phone is opened or closed.

T-Mobile has taken this action to help ensure our customers only receive devices we’re confident will perform at their peak, so they can stay effortlessly connected to those who matter most.

Motorola is currently working to identify the root cause of the power cycle issue in affected Sidekick Slide devices. The T-Mobile Sidekick LX™ and Sidekick iD™ are not affected by this issue.

If a customer purchased a Sidekick Slide that is experiencing the unintended power cycle issue, they may contact T-Mobile Customer Care, or go to a T-Mobile retail store, for assistance and to discuss available options.”

We’ve heard from a number of people that this problem has existed for some time. Why T-Mobile would choose to ignore it until a week after release is anyone’s guess. Here’s hoping they’ll come up with a hardware fix and get these things back on the market soon.

We’ve heard a number of reports from various people and sites that there’s a pretty serious flaw with the Sidekick Slide. Those of you that have moved away from the familiar flip of the Sidekick devices may have noticed that this change comes with a problem. Your Slide turns off when you slide the screen. Word has it that this problem existed with the pre-production devices, and we wonder how in the world this was acceptable for production devices. But nevertheless, it appears that this issue isn’t just a few unlucky folks. The crew over at Engadget gave their Slide a test and said it happened 2 out of 30 or so slides. Any true Sidekick users knows that opening the screen 30 times in a day is nothing! BoyGeniusReport says that this is happening with 2 of their devices, and we’ve heard a number of reports from various users via email. To make matters worse, your data is wiped out when this happens. Luckily it’s all returned thanks to Danger’s servers, but if you don’t have coverage, you’re out of luck until you do.

The culprit appears to be a loose connection for the battery. We’ve heard reports of people using a small bit of folded paper or business cards as a shim to wedge the battery more securely in place to fix the problem. No official word from T-Mobile or Danger yet though. So if you’re Sidekick Slide is resetting when you slide the screen, give T-Mobile a call and let them know.

They’ve put together a video showing the way that the screens open on the newer devices. Don’t you guys have some reporting on the iPhone to do? 🙂

Video on Gizmodo.com

Just kidding, we love you guys.

CrunchGear has a Sidekick Slide video review up as well as some nice pictures of the new tiny device from Motorola. Video below, post here