Hi,
We wanted to provide some background on today’s exciting announcement and some new developments with Sprint and HTC. There was significant media and press coverage for the launch of Sprint’s new HTC One® M8 Harmon Kardon® Edition device in NYC last week. The device was marketed as a music device featuring a new partnership with Spotify and also a default music centric homescreen experience called Music Live. The Music Live experience is powered by NQ Live. NQ Live provides homescreen animation, music recognition, music news feeds, music tracks, and music partner promotion.
What is the specific relationship with Sprint?
As a reminder, in January of this year, we announced a new relationship with Sprint where we would co-develop the next generation of Sprint ID - which would be called Sprint Live and be powered by our NQ Live platform. Sprint Live will deliver Sprint customers a more interactive, informative and immersive mobile experience and will be the standard homescreen on all Sprint Android devices.
What is the announcement today?
Last week, Sprint and HTC have collaborated to introduce a world-class device with leading hardware in conjunction with Harman Kardon, launching the exclusive HTC One M8 Harmon Kardon edition device. In addition, they have collaborated with Spotify, a leading music content platform, to anchor the HTC One music offering. This device’s default music-centric homescreen experience is powered by our NQ Live platform.
NQ has worked with Sprint, HTC and Spotify to create a homescreen that brings together the unique features of this device, its interactive capabilities and various music applications and services. As a first-party experience (Sprint-branded, Sprint directed experience) and the first commercial execution of an NQ Live powered experience, NQ Live serves as the central DNA of the user experience that brings this world-class device and content experience to life in the hands of the end consumer. Without NQ Live, a traditional execution of such a device and content partnership would have just been another app preinstalled on the device. With NQ Live, however, Sprint and HTC and Spotify are delivering the world’s best hardware, software, and content integrated with a fully integrated and seamless content experience on the device. And, this is still just the beginning of NQ Live.
In addition to the NQ Live integration, we have also extended our strategic alliance with Sprint by adding our Music Radar audio search technology as both the music search, discovery and recognition technology for the Sprint Music Live flagship app on the latest HTC One devices and the Sprint Live platform. Today’s announcement with Sprint is an exciting next milestone for our audio search technology.
As a reminder, our audio search technology is being licensed and used in some of the world’s largest music applications like China Mobile’s Migu, Kugou, TTpod, Huawei’s Ring Back Tone services and applications, and now Sprint’s Music Live offering. Music Radar is available direct to consumers on Google Play and in Samsung’s Galaxy Gear Store for their smart watches.
The extension of our relationship with Sprint highlights an important capability of our channel partnership and platform model, and that is our ability to leverage important breakthrough technologies like NQ Live to also drive a partnership with other elements of our platform, in this case, Music Radar. Our platform gives our partners and channels the immediate benefit of continuously adding new mobile software as a service capabilities to their portfolio that have significant business impact with only an incremental level of additional effort and gives our platform a significant advantage in securing future growth and new opportunity with our partners.
What is the business model for NQ Live?
As we discussed on our product introduction conference call back in October, the business model for this platform includes technology licensing, revenue sharing agreements with carriers, revenue sharing agreements with third-party developers and content owners, advertising, traffic sharing, and premium content that users pay to access.
Currently, we are focused on building and scaling traffic on the NQ Live platform. As traffic scales, the ecosystem of third-party developers, content publishers, advertisers, as well as additional carrier and distribution partners grows. These early distribution agreements are extremely important to this scaling process, It is very exciting to see the results of these efforts at this early stage of product rollout. Specifically with Sprint and with this deal, we have both technology licensing and revenue sharing agreements in place -- yet, our highest priority will continue to be scaling the distribution of NQ Live.
This same principle applies to our Music Radar and audio-search technology business. Besides the Huawei ring-back tone (RBT) revenue share agreement previously announced, we are licensing our music technology and scaling our user base. With distribution, monetization opportunities via premium content, advertising and traffic sharing will follow.
What does the future look like for NQ Live?
The new HTC One M8 Harmon Kardon Edition device is just the beginning of what the NQ Live platform will become. NQ Live is a proprietary software platform that uses the Android application framework to introduce a new user interaction model that is unique to NQ Live.
NQ Live includes a to-be-launched software development kit that allows developers to program new NQ Live experiences in the homescreen. There are three main components on this device that will help you better understand what NQ Live really is: 1) a dynamic wallpaper, 2) a homescreen accessible tray, and 3) a “full-screen” mode.
1) The Dynamic Wallpaper: differentiated in its ability to display dynamic content programmatically (i.e. the content displayed is not just animated, and is delivered to the wallpaper through live content feeds generated from Sprint and its partners). On the HTC One device, the NQ Live wallpaper is a dynamic collage of album covers that features (or brings to the forefront) different album highlights or partnership highlights every few seconds.
2) The “Tray”: an easily accessible tab on the left side of the home screen which can showcase content, application links or application functions and can also dynamically render new offers. NQ’s Music Radar is one of the main capabilities offered in the NQ Live tray, along with music promotions, and permits one touch access to music search from the homescreen.
We are planning on publishing an NQ Live software development kit (SDK) that third party developers can use to program NQ Live applications that leverage these innovative user interface enhancements to Android. We look forward to sharing more about this in the future.
3) The “Full-Screen Mode”: accessed by “peeling” the screen (swiping the upper left of the screen down towards the middle or also just touching the peel in the upper left corner of the screen as well). The swipe launches an NQ Live application that extends the screen’s real estate indefinitely by allowing content to be navigated by vertical and horizontal scrolling. In the HTC One M8, the “full-screen” mode brings you to the Spotify application as well to various other music-related content modules and features including music news feed, popular music tracks, and Sprint partner promotional applications.
Why is our controlling interest in vLife valuable and important?
Following the announcement of our vLife acquisition (for a controlling 58% stake), some questioned the rationale for investing in a company that appears to just create and distributes dynamic wallpapers. What they are missing are the details of the technology and IP that underlies the vLife app as well as vLife’s quickly growing user adoption (Technology/IP AND Distribution Scale). Simply put, without vLife, there would be no NQ Live.
NQ Live is a development platform derived from vLife’s underlying technology that enables developers to build on top of Android application framework and extend the user interface beyond what is currently possible with any other available technology using Android’s application framework. NQ Live brings developers and distributors, including carriers, the ability to design and customize a more immersive, interactive and dynamic user experience on the most valuable real estate in mobile — the device homescreen. As NQ Mobile’s proprietary platform for the Android ecosystem, NQ Live is a key component of our future distribution strategy. We valued our acquisition investment primarily on the core IP that serves as the technical foundation for NQ Live as well as the tremendous scale and distribution head start. Our partnership with Sprint and HTC uses just some of NQ Live’s capabilities. You will see much more of the capabilities as the platform is rolled out and evolves.
As we have stated before, we believe NQ Live is the most exciting product and offering in NQ Mobile’s history. The user interface of the new exclusive Sprint HTC One device marks the just beginning of our vision for NQ Live.
Please let us know if you have any questions.
Below are a few articles about the device as well as video links (notice in the pictures and the video demonstrations the various components of the NQ Live platform (the wallpaper, the full screen mode and the tray):
http://www.cnet.com/news/sprint-htc-one-m8-harman-kardon/
