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Smith Micro Finds Its Online Store Increase in 'Clicks' As Primary Sales Channel

Nov 06, 2002
Greater Margins, Direct Relationship with Customer Make the Internet a Winning Channel To Bricks-and-Mortar Sales for Business/Consumer Software Provider

Aliso Viejo, CA -- Smith Micro Software, Inc. (Nasdaq: SMSI), a developer and marketer of a wide range of software solutions for the wireless and Internet markets, has sold its products online for the last seven of its nineteen years of existence. But in the past year, an increasing amount of the company's overall sales have come from the online world-something the company has taken steps to encourage.

"Customer habits have changed," notes Doug Deck, Director of Sales and Marketing of the Internet and Software Solutions Business Unit that is the seller of such popular software as the CheckIt line of PC utilities and the HotFax® line of fax management tools. "Today, people in both the B2B and consumer sides of our business are more Internet savvy, using the web to quickly shop for the best deals in software. Added to that is the increased number of individuals with access to broadband. With high-speed Internet access, downloading software is a snap."

Given the rising number of cable modem and DSL Internet hookups, buyers who might have faced hours to wait for large software programs to download can now complete the same task in a few minutes. Couple that trend with the limited time people have to shop-either at brick-and-mortar retailers or, in the case of some business prospects, from resellers and other middlemen-and it's easy to see why buying software applications via the Internet makes sense to large numbers of customers.

Smith Micro is making the most of the growing shift to web store buying by running targeted email campaigns to its registered customers. "We recently conducted two email campaigns for CheckIt® FastMove, our PC-to-PC file transfer and synchronization product," said Bruce Quigley, Smith Micro's Director of Business Development. "Both efforts reached 275,000 of our key customers, and went very well overall."

The company also finds it can increase its revenue by selling direct to the customer. "We're careful not to price a product on the web for less than people can buy it through our brick-and-mortar partners," said Quigley. "However, as in the case of CheckIt FastMove, we will sometimes sell software as an "electronic download" version for less, simply because we don't include a parallel cable or other accessory as we do in the product's boxed version."

"To make our products as visible as possible in the online world, Smith Micro merchandises its products through the use of third-party search engine performance facilitators that keep our visibility high during searches on MSN, Yahoo, and other key portals," says Deck. "On a cost-per-sale basis, promoting ourselves on the Internet is a better alternative than traditional advertising."

Currently Smith Micro offers its full line of communications, wireless, eBusiness, and utility products on its web store, including its HotFax® PC-based fax management products, its WebDNA™ family of eBusiness development tools, the CheckIt® product line mentioned earlier and QuickLink® Mobile, a data connectivity kit that enables laptop PC users to access the Internet using their cellular phone. Still, the company sees good reason to continue its relationships with CompUSA, Staples, Best Buy and other mass merchant retailers.

"Our channel partners have tremendous customer bases that we'd be foolish to ignore," Deck said. "These retailers give us a high marketing presence with many of our customer segments. And some people just like the idea of holding a package in their hands before buying."

Despite the long-term benefits of its brick-and-mortar alliances, however, Smith Micro sees the shift to web-based selling as one that will pay off for the company in higher sales and a higher 'touch' factor with its key customer base.

"While our products are inherently used by web-savvy people, there is nothing about the Internet that doesn't apply to a broad range of businesses," Quigley remarked. "Whether they're downloading our products or having a boxed version physically shipped to them, customers are getting very comfortable buying over the web. This is a good strategic move for us, and it's one that we will continue to exploit."

About Smith Micro Software

Smith Micro Software, Inc., headquartered in Aliso Viejo, CA, is a developer and marketer of wireless communication and utility software products. The company designs integrated, cross platform, easy-to-use software for personal computing and business solutions around the world. With a focus on the Internet, Wireless, and Broadband technologies, the company's products and services enable wireless communications, eCommerce, eBusiness, Internet communications (voice-over-IP), video conferencing, and network fax, along with traditional computer telephony. Smith Micro's complete line of products is available through direct sales, retail stores, value-added resellers (VARs) and original equipment manufacturers (OEMs). Smith Micro's common stock trades on The Nasdaq Stock Market® under the symbol SMSI. For more information, contact Smith Micro at (949) 362-5800.

This release may contain forward-looking statements that involve risks and uncertainties, including without limitation risks and uncertainties relating to the company's financial prospects and projections, the company's plans for returning to sustained profitability and the company's ability to increase its business in the Wireless and Broadband segments. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are new and changing technologies, customer acceptance of those technologies, fluctuations or cancellations in orders from distribution customers, new and continuing adverse economic conditions, and the company's ability to compete effectively with other software companies. These and other factors could cause actual results to differ materially from those presented in any forward-looking statement and are discussed in the company's filings with the Securities and Exchange Commission including its recent filings on Forms 10-K and 10-Q.

Smith Micro, the Smith Micro logo, CheckIt, QuickLink, HotFax and WebDNA are trademarks or registered trademarks of Smith Micro Software, Inc. Windows is a registered trademark of Microsoft Corporation in the United States and other countries. All other trademarks and product names are the property of their respective companies.