Sony Ericsson says it plans to close its operations in San Diego as part of a global consolidation that the cell phone handset maker announced today. The London-based joint venture between Sweden’s LM Ericsson and Japan’s Sony Corp plans to move its North American headquarters from Research Triangle, NC, to Atlanta, and consolidate its product development operations by closing sites in six locations—San Diego; Research Triangle, NC; Seattle; Miami; Kista, Sweden; and Chennai, India. About 1,600 jobs are being eliminated.

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Google, Yahoo, Facebook, MySpace. Those companies’ products spread over the Internet like a virus. But why hasn’t there been a runaway hit like those in the mobile software world? Why does it take so much longer to build value, and a strong customer base, in mobile companies than in certain Internet startups?

Dan Shapiro had some entertaining thoughts on this yesterday, as he spoke to the Mobile Northwest 2009 crowd in Seattle. Shapiro is the co-founder and CEO of Ontela, a Seattle-based mobile imaging startup, and he’s a veteran of RealNetworks and Microsoft. I won’t do justice to his presentation, but here’s the gist.

Hotmail was one of the first examples of viral marketing. By appending the message, “Get your free e-mail at hotmail.com” (or some such) to the bottom of each e-mail, Hotmail helped pioneer a new method of promotion that was “basically free, highly measurable, and ridiculously effective,” Shapiro said. Its number of new subscribers jumped from hundreds to tens of thousands per day.

Maybe there’s something about the viral distribution model that doesn’t fly in the mobile world, Shapiro thought. In epidemiology, he pointed out, researchers use a parameter called the basic reproduction number to gauge whether a viral outbreak will spread or die out. The corresponding number in the Internet world tells you how many people a given user will “infect,” on average: Shapiro gave some estimates for Facebook (6), Gmail (5), MySpace (4), and Twitter (1.5). He argued that Twitter hasn’t been spreading virally; it has used more conventional marketing through word of mouth and the press.

“Heterogeneity in the target population is the best protection to keep you from being infected by viruses,” he said. That means some people have different levels of resistance, different behaviors, different types of contacts, and so forth, so not everyone will get infected by, say, the latest flu bug.

And that same kind of variety that makes individuals different is exactly why mobile isn’t viral, he argued. He cited some survey stats to explain how fragmented this market really is: There are roughly 500 different types of handsets, about 30 per carrier; about two-thirds of people (65 percent) don’t have a data plan; three out of four people (75 percent) are on a different carrier from you; almost that many (70 percent) don’t have a smartphone. And despite all the attention it gets, 98 percent of mobile users don’t have an iPhone. (iPhone apps are definitely not spreading virally, Shapiro said. He also argued that Tegic’s T9 predictive texting did not spread virally; it was pushed out by carriers and handset manufacturers in a dedicated partnership.)

“We will not see the Facebook, Gmail, or Yahoo of mobile until this changes,” Shapiro said. He added that he’s not advocating one standard mobile platform; he’s just saying how it is right now.

So his advice for mobile entrepreneurs and investors was:

—Be skeptical of anyone peddling viral marketing in mobile.

—Build a business model that doesn’t require big adoption.

—Pick a market segment that’s homogeneous. (Examples: BlackBerry corporate users, Silicon Valley techies.)

—Use ubiquitous technologies like WAP (Wireless Application Protocol) and SMS texting.

—Wait… (”Things are getting better,” he said.)

Afterward, Shapiro said he thinks “Europe holds the future of the U.S.” Over there, wireless carriers have influence, but only about half of consumers get their services directly from carriers, versus about 90 percent in the U.S. “I think you’ll see the carrier role diminish,” he said, when it comes to mobile software.

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I sat in on a good venture capital panel yesterday at Mobile Northwest 2009 in Seattle. No huge arguments or chair throwing to speak of (we’ll see what we can stir up at the next few Xconomy Forums). But some solid and useful observations from Geoff Entress of Voyager Capital, and also a prominent Seattle-based angel investor; Adrian Smith of Ignition Partners in Bellevue, WA, an expert in telecom and wireless; and Puneet Tandon of Bellevue-based T-Mobile USA, who is looking to sign partnerships with top entrepreneurs in digital media and social networking. (You can also see some comments from mobile VC Tom Huseby’s keynote here.)

The panel was moderated by Tricia Duryee, the Seattle-based correspondent for mocoNews, a website that covers wireless telecommunications. Here are my quick “top three” takeaways from the discussion of the local mobile industry:

1. The panic may be over, but caution rules. Entress says he’s added nine companies to his portfolio this year, out of a total of 32 he’s involved in (and six mobile firms, including TravellingWave, Swype, Dashwire, and Treemo). “We’re definitely not out of the woods yet,” he said. “But 2010 might be a good year for selling companies.”

2. It’s not all about the iPhone. Entress and Smith pointed out that Apple has only 17 percent of the smartphone market, so there’s plenty of opportunity on other platforms, like the BlackBerry and devices that use Windows Mobile. “Apple has a huge amount of mindshare,” Smith said, “but the critical thing is the development environment around [mobile applications].” Tandon agreed, saying, “Barriers to doing business with us [carriers] perhaps have been lowered.” Entress stressed the importance, especially for startups, of trying to avoid “getting locked into any one carrier, handset, or operating system.”

3. Watch advertising, input technologies, and connected devices. Tandon pointed out that by sometime next year, there are projected to be 3.3 billion Web-connected devices, and 70 percent of them will be connected via wireless operators. That means carriers will be willing to pay to know “who are the social influencers in your subscriber base,” he said. Smith and Entress said Google’s $750 million acquisition of AdMob signifies that mobile advertising is here to stay—but that the deal was the “first one out” (like YouTube for video), so don’t look for anything near that sort of valuation again. Entress added that he’s working with a number of startups selling new ways of inputting text on mobile devices (using speech recognition, touch-screen methods, and so forth). For all our fancy gadgets, it seems we still struggle to communicate.

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Tom Huseby says he’s finally able to go home and not worry about seeing his family’s savings stuffed under his mattress. “The panic is over,” he says. “All of a sudden, things are getting a lot better. It doesn’t feel much better now, but it is.”

Huseby, a noted Seattle-based venture capitalist with SeaPoint Ventures, Oak Investment Partners, Hunt Ventures, and Voyager Capital (and the Godfather of what we’ve been calling the “Qpass mafia”), was giving his 30,000-foot view of the economic landscape and VC market at today’s Mobile Northwest 2009 conference in Seattle. He also drilled down into some of the most pressing challenges in the mobile space, as well as what the startup opportunities are. Just a few highlights here:

“Unemployment is going to slow growth across any consumer business. If you’re in mobile, I hate to tell you, but you’re in the consumer business. I do think there will be liquidity in mobile startups,” Huseby says. “Most startups are going to have to earn it the old-fashioned way, they’ll have to grow over a long time. You’re going to have to survive during a roller coaster ride. Every single company will have to go rushing to the bottom, and then do the slow, clanking ride to the top.”

In terms of startup opportunities, it helps to think in terms of what wireless carriers need. Huseby calls himself “fairly carrier-centric.” As he puts it, they are big customers that are predictable (once you understand them) and they generate huge amounts of cash. He laid out the top three challenges for carriers today—absolutely critical to understand if you’re an entrepreneur trying to get their attention with a new product.

—Bandwidth. There’s “tremendous pressure on carriers” to provide more bandwidth to support people’s exploding need for data connectivity wherever they go, Huseby says.

—Costs of bandwidth. “Oh my God, how are you going to pay for it?” he asks. With such a competitive market, Huseby thinks costs for consumers will actually go down. “I think they’re not going to get the money from us, they’re going to have to get it from advertising. Advertising revenue will absolutely help pay for the bandwidth.” (The problem is that mobile advertising revenue is still relatively small and doesn’t usually go to carriers.)

—Holding onto consumers. “If they’re going to pay for it with advertising, they need to get a much firmer grip on their customers,” Huseby says. He sees this as a crucial issue for the coming decade. “The next viral social network has to work hard to make [ad revenues] accrue to them. Carriers have to be very conscious of the demographics of their customers. They have to get their customers anchored in.”

After his talk, I had a chance to ask Huseby about some other areas of interest, like mobile search. He says he’s generally staying out of that space, but is looking at location-based services from the perspective of retail stores and local advertising.

We’ll have more from the conference soon, so watch this space.

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San Diego serial entrepreneur Michael Robertson is going to have to find something else to do now that Gizmo5, the VoIP (voice-over-Internet-protocol) company he founded in 2003, has become part of a certain search giant to the north. We have that news and more.

—Google confirmed that it’s buying San Diego-based Gizmo5, a six-year-old company that provides Internet-based calling software for mobile phones and computers. The service will become part of the Google Voice number-unification service. Google did not disclose the purchase price, which media reports put at about $30 million. Gizmo5’s 6 million users will still be able to use the service, according to a statement. But Google is suspending new Gizmo5 signups, and existing users can no longer sign up for a call-in number.

—Platformic, a Web-based startup that enables customers to create and manage their own websites, said it is adding social media capabilities. The two-year-old San Diego-based company, which has targeted broadcast companies, says its expanded software-as-a-service product will help a broadcaster’s audience share photos, create their own user profiles, and create personal blogs on the broadcaster’s Platformic-powered website.

—Qualcomm’s No. 2 executive opened a regional mobile technology conference in San Diego by providing an overview of steps the chipmaking giant is taking to help ease the pressure on wireless network bottlenecks as mobile data traffic soars. Qualcomm (NASDAQ: QCOM) Chief Operating Officer Len Lauer told the 3G CDMA Americas Regional Conference that in the year 2014, worldwide mobile data traffic in one month will exceed mobile data traffic for all of 2008.

—Technology innovations that help companies optimize their profitability will likely lead to the next wave of analytics-based software startups, according to Stephen Coggeshall of San Diego-based ID Analytics. Another hot area will be analytics that can help forecast consumer behavior, said Coggeshall, who was participating in a discussion about new opportunities in analytics during the San Diego Software Industry Council’s annual forum on analytics.

—Israel’s Panoramic Power won $250,000 and became the first winner of the top QPrize, the incentive prize competition launched earlier this year by Qualcomm Ventures. Panoramic Power is developing energy-monitoring wireless technology that enables a company or institution to deploy so-called “smart grid” technologies within their existing facilities.

—The San Diego-based Cannon Power Group said is getting $19.4 million in federal renewable energy grants to help fund construction of a giant wind farm in eastern Washington state, about 110 miles east of Portland, OR. The $1 billion Windy Point/Windy Flats project is expected to generate enough electricity for 250,000 homes.

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A consumer tech company has scored one of the bigger equity financing rounds in the Portland area this fall. Beaverton, OR-based Avnera, a fabless semiconductor company that makes chips for wireless audio applications, has raised about $8 million in equity financing out of a total offering of $10 million, according to a regulatory filing with the SEC. The investors in the current round were not specified, and e-mails seeking confirmation of the deal sent to Avnera and previous investors were not immediately returned.

Before the latest round, Avnera had raised about $42 million in funding. Its original investors include Bessemer Venture Partners, Redpoint Ventures, and Jafco Ventures. Other investors joined in later rounds, including Intel Capital, DAG Ventures, Altien Limited, Panasonic Ventures, Polycom, and BestBuy. Most recently, Avnera raised a $14.7 million Series C round in September 2007.

The current filing lists as company directors Rob Chandra and Umesh Padval of Bessemer, John Walecka of Redpoint, and John Miner, formerly of Intel Capital (now with Pivotal Investments).

Avnera was founded in 2004, and is led by CEO, chairman, and co-founder Manpreet Khaira. Its technology involves advanced circuit design techniques to put things like radio frequency electronics, power management systems, audio data converters, and programmable signal processors onto a single silicon chip. That can help make audio accessories cheaper and have better sound quality in computers, iPods, home entertainment systems, and mobile devices. Avnera’s customers include Logitech, Creative, Panasonic, Vizio, and Sanyo.

Back in June, Eric Rosenfeld of Capybara Ventures and the Oregon Angel Fund told Xconomy that Avnera was one of the leading lights in Portland’s semiconductor scene. “They’re doing very well,” he said at the time. “Hopefully they’ll be the one that revives people’s confidence locally.”

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San Diego-based Qualcomm (NASDAQ: QCOM) says Panoramic Power, a wireless sensor startup based in Kidron, Israel, is the winner of the first QPrize, the incentive prize competition launched earlier this year by Qualcomm Ventures. Panoramic Power has developed energy monitoring wireless technology that enables a company or institution to deploy Smart Grid technologies within their existing facilities. Panoramic Power, which previously won $100,000 as a QPrize regional winner, was awarded another $150,000 and the opportunity to compete in a global business plan competition held at the Mobile World Congress in Barcelona, Spain.

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[Corrected 11/11/09, 3:15 pm. See below] Qualcomm chief operating officer, Len Lauer, says the San Diego wireless chipmaking giant is working across a broad front of technology development to accommodate a surge in wireless data traffic.

“The mobile Internet has arrived,” Lauer says in the opening keynote talk yesterday at the 2009 3G CDMA Americas Regional Conference. With more than 4 billion wireless subscribers around the world now—including 885 million 3G phone users—Lauer says the growth in wireless data is reflected by a roughly one-third increase in revenue reported over the past year by Verizon, AT&T, and other major carriers.

[Corrects to say Lauer was comparing monthly data traffic in 2014, not monthly growth in data traffic] By 2014, or just five years, Lauer says  worldwide mobile data traffic in one month will exceed total mobile data traffic for all of 2008.

Qualcomm founder and former chairman and CEO Irwin Jacobs and his son Paul Jacobs, who is Qualcomm’s current chairman and CEO, sounded a similar theme when they warned of capacity constraints last month during a keynote appearance at the CTIA Fall 2009 conference in San Diego.

In addition to the increasing demand for mobile data from smart phones and netbooks, Lauer says the trend can only accelerate as new wireless device categories proliferate, especially in what he calls machine-to-machine (M2M) communications. Examples of M2M technology developers include CardioNet, a Pennsylvania wireless health company that uses wireless sensors to continuously monitor heart patients for irregular heartbeats; wireless smart grid technologies being deployed by electric utilities (including San Diego Gas & Electric), and eBook devices like Amazon’s Kindle.

“Other operators are seeing this as a viable market, but it is going to take awhile to develop,” Lauer says, citing estimates that 229 million M2M cellular connections are forecast for 2013. “We do see from Qualcomm’s standpoint this being a very large opportunity for our chips.”

To cope with the surge in wireless data traffic, Lauer outlined a range of technology advances that Qualcomm has underway:

—The latest generation of advanced wireless receivers, which include updated revisions to the EV-DO (Evolution Data Optimized) telecommunications standard (part of Qualcomm’s CDMA2000 family), operate …Next Page »

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Healthcare deals are going one way, tech deals another. That’s my read from the past week in the Northwest, where we’ve seen some of the biggest biotech deals around, even as a prominent Seattle tech venture firm (and software financings in general) head south.

—Bothell, WA-based Alder Biopharmaceuticals scored one of the biggest biotech partnerships of the year, as Luke reported today. The company has formed a collaboration with Bristol-Myers Squibb (NYSE: BMY) to develop Alder’s experimental rheumatoid arthritis drug, ALD518, and the deal could be worth more than $1 billion. In exchange for granting Bristol a worldwide exclusive license to develop ALD518 for all uses except cancer, Alder will get $85 million upfront, as much as $764 million in development and regulatory milestone payments, sales-related milestone payments that could exceed $200 million, and royalties on product sales.

—I took a look at the venture and debt financings for Washington companies last month (and the previous two months), and concluded that large investments in software startups aren’t coming back anytime soon. The data, courtesy of New York-based ChubbyBrain, shows most of the money is in healthcare and life sciences.

—Kirkland, WA-based Clearwire has secured an additional investment of $1.5 billion from Sprint, Comcast, Time Warner Cable, and Intel, as first reported by the Wall Street Journal. Google, a previous investor, is not participating in the round. The money will support Clearwire’s (NASDAQ: CLWR) deployment of its WiMax broadband network.

—Verathon, a Bothell, WA-based maker of ultrasound technology, has been acquired by Sarasota, FL-based Roper Industries (NYSE: ROP) as part of a pair of transactions worth a combined $356 million, as Luke reported. The price of Verathon’s sale by itself was not announced. The company develops a 3-D diagnostic imaging tool that helps doctors diagnose bladder disorders.

—One of Seattle’s most prominent tech VC firms will not be raising another fund or making new investments. Len Jordan of Frazier Technology Ventures confirmed the news as he announced he’s moving to Madrona Venture Group at the beginning of next year.

—Bellevue, WA-based Light Sciences Oncology has lined up $35 million in follow-up financing to develop its drug-device treatment for cancer, as Luke reported. The investors weren’t disclosed, but the deal gives Light Sciences the right to access a $23.3 million line of credit, and $11.8 million more if investors choose to exercise warrants. The company raised $40 million from undisclosed VCs last year.

—Seattle startup Movaya Wireless has been acquired by Digby, a mobile commerce firm based in Austin, TX, for an undisclosed price. Movaya was founded in 2006 by Phil Yerkes and Stanley Wang, and focuses on making digital goods storefront applications for the iPhone, Android, and mobile Web platforms. The company’s development team in China will serve as the basis for Digby’s operations in Asia.

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Kirkland, WA-based Clearwire (NASDAQ: CLWR) is about to receive an investment of at least $1.5 billion led by Sprint Nextel, according to the Wall Street Journal. Sprint will invest $1 billion, and its partners, including Comcast, Intel, Time Warner Cable, and Bright House Networks, will chip in an additional $500 million, for continuing support of Clearwire’s WiMax broadband network. Google, which has invested previously in Clearwire, is not participating in the current financing round. The official announcement could come as early as this week, the WSJ reports.

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It was a busy week for local technology news.

—Two teams from San Diego and a third from Northern California demonstrated their development of advanced chemical sensor prototypes that are tiny enough to be found inside ordinary cell phones. The U.S. Department of Homeland Security is funding the Cell-All program, with a goal of basically creating an anti-terrorism app for cell phones that would enable authorities to crowd-source chemical detection.

—MaxLinear has filed for its initial public stock offering. The Carlsbad, CA-based fabless chipmaker, which specializes in designing semiconductor-based television receivers, intends to raise about $100 million through its IPO. The market may be de-frosting a bit, with 47 IPOs so far in 2009, compared with 45 last year, and 272 in 2007.

—ProQuo, a San Diego-based Web 2.0 company that was founded in 2007, was quietly shut down after taking in a total of $15 million in venture capital from Menlo Park, CA-based Draper Fisher Jurvetson and San Diego-based Mission Ventures. ProQuo was never able to validate its business model; its website offered consumers a way to remove their names from mass-mailing lists for free, and the company planned to sell its optimized lists back to mass marketing companies.

—San Diego’s wireless industry group, CommNexus, celebrated the opening of EvoNexus, its free high-tech incubator, by announcing the selection of three more startup companies: EcoATM, MicroPower Technologies, and TetraVue. CommNexus CEO Rory Moore says EvoNexus is believed to be the first incubator that is completely free for startups—that is, it doesn’t even require an equity stake in participating companies, as most incubuators do.

—Jitterbug, the San Diego wireless provider that puts an emphasis on simplicity, has acquired MobiWatch, a Waltham, MA-based startup developing mobile personal emergency response services. A regulatory filing shows that Jitterbug’s parent, GreatCall, provided 630,000 shares of common stock to MobiWatch and its shareholders in a deal valued at $107,100.

—San Diego-based Networkfleet is using its technology to help companies that operate fleets of vehicles go green by monitoring engine emissions and ensuring that vehicles are operating efficiently. Co-founder Diego Borrego told me the company also expects to be a player as consolidations sweep through the fleet tracking industry.

—EcoDog, a Vista, CA, cleantech startup that has developed a device that helps homeowners sniff out savings in their electric utility bill, was named best of show at GadgetFest, the annual fall competition sponsored by CommNexus, the San Diego wireless industry group. EcoDog founding CEO Ron Pitt won over the crowd when he declared, “My product is the only product up here tonight that saves you more money than it costs.”

—San Diego-based cleantech startup EESG is looking to raise $1.2 million to expand the 10-employee company’s sales staff, purchase inventory, and ramp up public relations and marketing. The company’s founders told me they have raised about half so far, including $300,000 from Longboard Capital Advisors, a green investment firm based in Santa Monica, CA.

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MaxLinear, a fabless RF chipmaker based in Carlsbad, CA, filed a registration statement today for an initial public stock offering, marking only the second IPO in the San Diego area since Bridgepoint Education made its debut on the New York Stock Exchange in April. About 45 IPOs have taken place nationwide so far this year.

Eight semiconductor industry veterans founded MaxLinear in 2003. The company specializes in designing highly integrated, CMOS (Complementary metal–oxide–semiconductor) chips, and has had notable success designing semiconductor-based TV tuners. Maxlinear says its customers include wireless module makers, original equipment manufacturers and original design manufacturers.

David Rodewald, an outside spokesman for the company, said MaxLinear executives would not comment beyond the statement issued today.

The number of shares to be offered and the price range for the offering were not disclosed, although Dow Jones says the Carlsbad company plans to sell an estimated $100 million in stock. The company plans to use the proceeds for working capital and general corporate purposes.

The founders self-funded MaxLinear for the first year, and co-founder and CEO Kishore Seendripu talked about their efforts to generate revenue by taking on consulting work and other outside work during a panel discussion on bootstrapping in San Diego six months ago. Seendripu defined bootstrapping as “a self-sustaining process that proceeds without external help.”

MaxLinear secured its first round of venture funding in late 2004, after completing development of its first prototype silicon television tuner using CMOS technology. The company identifies its venture investors on its website as San Diego-based Mission Ventures, U.S. Venture Partners of Menlo Park, CA, and Battery Ventures, which has offices in Waltham, MA, and Menlo Park, CA.

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Bitwave Semiconductor of Chelmsford, MA, has raised $1.33 million out of a planned $6 million Series C equity funding round, according to regulatory documents. The company makes radio-frequency integrated circuits for portable devices. Bitwave collected $10 million in Series B funding from Apex Venture Partners, TVM Capital, and ECentury Capital Partners in August, 2008.

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A regulatory filing made last month by GreatCall, the San Diego-based parent of Jitterbug, offers some insight into the value of Jitterbug’s acquisition of Waltham, MA-based MobiWatch. Jitterbug announced the deal yesterday but declined to comment beyond its press release. The filing shows that GreatCall provided 630,000 shares of common stock to MobiWatch and its shareholders. A note in the filing says the common stock was issued “in connection with the acquisition of certain assets of MobiWatch, pursuant to a purchase agreement dated 9/30/2009.” GreatCall currently values its common stock at 17 cents a share, which puts the official value of the MobiWatch deal at just $107,100—but with a big potential upside.

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The moderators of San Diego’s 9th Annual GadgetFest kept saying during Tuesday night’s showcase for new technology products that past winners have gone on to even greater glory and success. That may or may not be good news for the Motorola Droid that goes on sale tomorrow at Verizon stores nationwide. After making a cursory appearance at CTIA and perhaps elsewhere, the Droid debuted its impressive features and ended the evening as runner-up.

GadgetFest moderators Ken Rutkowski and Andy Abramson reminded the audience that Grand Central, a GadgetFest winner three years ago, was acquired shortly after the 2006 event by Google (and has since been transformed into Google Voice). They also pointed to Motorola’s Q Phone, Sling Media’s Slingbox, and the Truphone as paragons of GadgetFest virtue. All three devices were introduced at GadgetFest instead of the CTIA or other major trade shows, according to CommNexus, the San Diego wireless industry group that sponsors the event.

So expectations were high. But the Droid, with all its iPhone-slaying hoopla, finished the GadgetFest competition in a dead-heat with EcoDog, a local cleantech startup that trotted out Fido—a device that helps homeowners sniff out savings in their electric utility bill. The GadgetFest judges ultimately proclaimed EcoDog this year’s best in show after the Vista, CA-based company received perceptibly more-boisterous applause from the audience in the Irwin M. Jacobs Qualcomm Hall at Qualcomm’s San Diego headquarters.

At the end of the show, while the judges were deciding how to resolve the tie, one of the moderators asked EcoDog founder and CEO Ron Pitt if he had anything more to say. He replied, “My product is the only product up here tonight that saves you more money than it costs.”

So what are the up and coming gadgets that got previewed at GadgetFest? Here’s a rundown, just in time for the Christmas shopping season:

—TelCentris, the San Diego-based provider of unified communications services, presented an update to its VoxOx system, which aggregates voice over Internet technology, text messaging, instant messaging, serial conferencing, file sharing, and e-mail onto one user interface. As TelCentris executives explained to me in July, the company makes most …Next Page »

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San Diego-based Jitterbug, the simple-to-use wireless phone and services provider, says today it has acquired MobiWatch, a startup in Waltham, MA, developing mobile personal emergency response services. Terms of the deal were not disclosed.

Jitterbug says the deal will provide its users with personal safety services that are intuitive, reliable and deliverable through its Samsung-made clamshell cell phone, which features a simple interface and keypad that especially appeals to seniors. As we reported in March, the business operates as a subsidiary of GreatCall, co-founded by wireless pioneer Arlene Harris as an antidote to the excessive complexity of many 3G smart phones. GreatCall operates as a mobile virtual network operator, or MVNA, an independent company that provides mobile phone service but does not have its own licensed operating frequency.

GreatCall officials would not comment beyond the press release. As MassHighTech reported last year, MobiWatch was developing a fob-like Bluetooth-enabled device that a user could attach to a keychain. In an emergency, the user would push the dime-sized button on the fob, which would launch the Bluetooth connection to the user’s cell phone to call an emergency response center. An operator at the center would determine the nature of the emergency, use GPS to locate the caller’s location, and contact the appropriate authorities.

Jitterbug says it plans to further develop the MobiWatch technology before bringing it to market.

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To a large extent, the story of San Diego-based Networkfleet is also an intriguing tale about co-founder Diego Borrego. The privately held company, which currently has more than 100 employees, is one of the nation’s largest providers of technology and services for monitoring the location and status of company-owned vehicles.

Borrego, a Mexican-American who says his first language was Spanish, helped start the company in 1999, quit when he realized he had lost his ownership stake, and rejoined Networkfleet before the business entered a period of double-digit growth. The 42-year-old engineer says his name is on about 10 of 30 patents issued so far to the 10-year-old company.

While wireless fleet management systems are what my Xconomy colleagues politely refer to as “mature” technologies (as opposed to our usual focus on the sweet spot of emerging tech), Networkfleet maintains that not all fleet management systems are alike. Many systems simply use global positioning satellite technology to monitor the locations of company-owned vehicles. Networkfleet’s technology also helps customers reduce their fleet operating costs and vehicle emissions by using the computerized sensors in every vehicle to monitor the vehicle’s performance and engine efficiency.

Diego Borrego

“There are processors now that control the brakes, the engine, transmission, airbags,” says Borrego, Networkfleet’s vice president of engineering. “There’s a rich set of information that we call diagnostics.” He views the technology as more of an IT challenge, because nowadays there is essentially a local area network (LAN) in every new car and truck that links together an average of 25 different computers. “Extracting that data from the vehicle, and somehow transmitting it (in conjunction with GPS) and turning it into information that can be used by fleet vehicle managers is the innovation,” Borrego says.

Networkfleet provides its Web-based service to customers that range from plumbing companies with 10 trucks to the state of Delaware, which operates more than 2,400 government vehicles. Networkfleet installs a piece of hardware that connects to the LAN in every vehicle, gathers information about the vehicle’s operation and transmits the data via cellular links to a data center operated by Networkfleet. Each customer’s fleet manager is given a login to Networkfleet’s website, where he or she can monitor the location of the company’s vehicles. Data about each fleet also can be converted into reports that fleet managers can use to schedule maintenance, optimize operations, and monitor driver behavior.

The company generated about $30 million in sales last year, a 45 percent gain in revenue growth over 2007 that made Networkfleet the second-largest company in the business (based on number of subscribers), according to Keith Schneider, Networkfleet’s president. (The largest is Trimble, a Sunnyvale, CA-based GPS technology company that acquired rival @Road in 2006 for $496 million.) Schneider says many of their competitors tend to specialize in narrow segments of the technology-based business, such as GPS-based vehicle location, advanced routing applications, and workforce management—and he sees the technologies converging. “The industry is poised for massive consolidation,” Schneider says.

The Networkfleet president indicated during our conversation that Networkfleet, which has been owned by the New York private equity firm Apollo Management since 2006, aims to take an active role in that consolidation.

Still, Networkfleet has taken a winding road to get this far—after beginning more than a decade ago on a strategy that came …Next Page »

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EvoNexus, San Diego’s free high-tech incubator, announced that it has enrolled three more startup companies during ceremonies yesterday that officially marked the opening of its new facility.

CommNexus, the San Diego wireless industry group, announced five months ago that it was leading the creation of the free and “no strings attached” startup incubator, to be headed by wireless industry executive Cathy Pucher. EvoNexus, which is structured as a nonprofit organization, plans to eventually house 10 to 12 technology startups; it named its first three startups less than two months ago.

CommNexus and EvoNexus have both moved their offices into part of a 25,000-square-foot commercial office building that was previously occupied by San Diego-based Leap Wireless, (NASDAQ: LEAP), which sells prepaid discount mobile phone service through its Cricket Communications subsidiary. By providing the office space to EvoNexus for one year at no cost, Leap made the largest single contribution of more than three dozen companies and individuals that donated in-kind services and cash to the incubator, according to Pucher.

“San Diego is an innovation economy,” Leap CEO S. Douglas Hutcheson told the crowd. “We’ve spawned more new companies in San Diego than I think anyone would have believed, and it’s vital that we support that.”

For the startups that are lucky enough to get selected, the incubator provides free office space, including utilities, Internet service, office equipment, and volunteer business mentoring for up to two years.

“Other cities don’t recognize the collaboration that we have here,” San Diego Mayor Jerry Sanders told a lunchtime crowd of roughly 150 people who attended a ribbon-cutting ceremony for the incubator. The mayor was joined by other local dignitaries and industry officials, including CommNexus board chairman John Major, the former chairman and CEO of two San Diego wireless companies, Novatel Wireless and Wireless Knowledge. “As we entered into the recession of recessions, a lot of non-profits hunkered down, and frankly that would have been the easy thing for us as well,” Major said. “But that’s not the way we operate.”

Pucher, the incubator’s executive director, told me …Next Page »

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It was a quiet week for deals in the Northwest, but we dug up some important ones in business software, wireless, and biotech.

—Seattle-based Amazon’s (NASDAQ: AMZN) acquisition of Zappos, the online apparel and shoe seller based in Las Vegas, has closed. The deal, first announced back in July, is valued at $1.2 billion in Amazon stock.

—Bellevue, WA-based Onehub has raised $1.3 million in Series A funding from Ignition Partners and angel investors. The company was founded in 2007 and makes Web-based software for business collaboration and file-sharing.

—We took a close look at small financing deals in the Northwest, worth between $100,000 and $1 million, that have flown under most people’s radar in the past month. According to stats from ChubbyBrain, a New York-based information and data services company tracking the innovation economy, the following companies raised a small amount of equity in September: Acucela, Adometry, BallLogic, InEnTec, Inson Medical Systems, Second Porch, Site 9, SynapticMash, Smilebox, Vantos, and WA 32609.

—Seattle-based Kineta, a biotech firm developing drugs to fight autoimmune diseases, has formed a strategic alliance with MPI Research, based in Michigan, as Luke reported. Financial terms of the deal weren’t given, but Kineta said it will receive support for animal studies that will enable the company to begin clinical trials next year.

—Portland, OR-based RF Arrays raised $6.5 million in equity, options, warrants, and/or other rights to acquire securities, according to a regulatory filing. The investors were not disclosed, but New York-based New Science Ventures has previously backed RF Arrays, which develops wireless communications technology.

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San Diego’s tech sector got some money and glory during a week that was overshadowed by news from two life science conferences: TEDMED and the annual Biocom Investor Conference. Get your tech news now while it’s still hot.

—To stay connected with open-source development for smart phones, San Diego’s Qualcomm created a subsidiary, the Qualcomm Innovation Center, that is focused on making sure the chipmaker’s technology works smoothly with Android, Symbian, and other open-source wireless platforms. Qualcomm (NASDAQ: QCOM) also joined the Symbian Foundation and is supporting the open source systems used by Nokia and others.

—One of the big selling points for algae-based fuels is that algae absorbs a lot of carbon dioxide before it gets harvested and turned into biofuels. Yet San Diego-based Sapphire Energy and other algae biofuel companies say they are having a hard time getting enough carbon dioxide at an affordable price to support their research and development efforts.

—Federal stimulus funds will help cover almost half the cost of a new $60 million wireless communications system that San Diego Gas & Electric is developing as part of its smart grid program. The $28.1 million grant is part of $3.4 billion to be allocated nationwide.

—Carlsbad CA-based Verdezyne, which is applying advanced biotechnology tools to the development of industrial chemicals and biofuels, raised nearly $3 million of a planned $15.2 million round of venture capital.

—JMI Equity, the venture firm based in San Diego and Baltimore, led a $5 million investment in Axeda, the Waltham, MA-based startup that makes a cloud-based system for wireless tracking of company assets. Axeda also raised $4 million in venture debt from MMV Financial of Toronto.

—TechAmerica San Diego, the local chapter of the industry group previously known as the AeA, issued nine awards at its 16th annual high tech awards luncheon. The group named winners in nine categories: MadCap Software (Software); InterKnowlogy (Internet); Verari Systems (Hardware); Quake Global (Communications); SeaBotix Inc. (Defense); Peregrine Semiconductor (Integrated Circuits); OneRecovery (Medical Device) IPS Group (Cleantech); Legend Films (Emerging Growth).

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