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Tiger Telematics "not involved" in European collapse of Gizmondo, says receiver

The "phone which wasn't a phone" - the Gizmondo games platform which had a GPRS link, but no voice capability - has brought down the UK and European company - but sources close to the receiver say that investigators are playing their cards  very close to their chests when it comes to how this will affect the US-based parent company - Tiger Telematics.

The word around the 3GSM Congress last week was that there was more to the collapse of Gizmondo than a simple business failure. But that was just gossip: not until this week's announcement was it confirmed that there would be two investigations, not one.

Industry leaders said they found the refusal of the Court to give administrative protection to the company "significant" - but nobody is publicly saying why.

Asked for details, the official spokesman for the receivers would say nothing other than to confirm that the investigations referred to were UK/European only, and "will not involve Tiger Telematics, which is US based."

The basis of the business plan, as originally revealed by Tiger Telematics directors to NewsWireless, was to make money through advertising. One director predicted that millions of teens would use the devices, which would make them a powerful new medium for advertising.

Directors also claimed that it would be "capable of running Microsoft Xbox games software" - a suggestion which found no traction in the industry. However, key to the plan was the necessity to shift not just a few hundreds or a few thousands, or even tens or hundreds of thousands of boxes - but many millions, to create a mass advertising market.

If Tiger's plans depended as deeply as directors suggested on getting that mass market, then it's hard to see how to predict a revival for the company, without a platform on which to sell advertising.

Even those observers who had been predicting disaster - basing their prophecy on their perception of the over-spend on prestige Central London showrooms when the product wasn't selling well - have expressed astonishment at the revelations of just how badly sales were going.

"It looks like they only sold about ten thousand devices," said one entrepreneur, not willing to be quoted by name. "How they were able to spend a hundred times as much as they made, is something many people will want to understand in detail. But to sell £1.4 million worth of goods costing a hundred and thirty pounds each, and spend £140 million doing it, means it cost them roughly £14,000 to buy each customer. They could have done much better in building up the installed base by simply giving each customer a hundred machines to give away to their friends."

But in the past, several commentators have been more explicit in their criticism, tagging the company as having "links to organised crime". And, clearly deeply vexed by the similarity of name, gadget site Gizmodo actually accused the company - pretty directly, too - of creating products which would allow child molesters to track kids.

Paul Davis and Tim Dolder, liquidators at Begbies Traynor, "will be conducting an investigation into the causes of the company's collapse and extent of the losses."

Reports have suggested that Tiger Telematics was "trying to buy the assets" of Gizmondo. However, at press time, we were unable to access the Web site of the former parent company any more than the European operation site. And all staff have been made redundant by the liquidators.

Tags: 3GSM, Gizmondo, Tiger Telematics