October 5, 2000 12:05 PM PDT

Email appliance maker doubles subscribers

Email appliance maker Cidco said today it more than doubled the number of subscribers using its $99 MailStation in the third quarter, although the company still expects to lose money for the rest of the year.

The Morgan Hill, Calif.-based company said it now has 36,800 subscribers after adding 19,400 new customers in the quarter. Richard Kent, Cidco's chief financial officer, said the company hopes to have 100,000 subscribers by the end of the year as a result of a national TV ad campaign it kicked off this week.

"Looking forward into the fourth quarter, we believe that's going to be a major quarter for us," Kent said.

The MailStation allows people to send and receive email. They cannot surf the Web, but can get news and some other content from Yahoo. The MailStation service costs $9.95 per month.

Profitability is not yet around the corner for Cidco, which has been losing money for the past several quarters, Kent said. The company subsidizes $10 to $15 of the cost of each MailStation appliance and also has been spending heavily on marketing the unit.

"We are not going to be profitable for certain this year," Kent said. "We're investing heavily in the MailStation."

Last month, the 12-year-old company sold its telephone products unit to an investor group, saying it would focus exclusively on Internet appliances such as the MailStation. The move has yet to significantly boost the company's shares, which have been trading in the $3 range, down from a 52-week high of $14.25.

The market has also been rough in recent weeks for Netpliance, another Internet appliance maker. The company traded as low as $1.13 this week before rebounding somewhat yesterday to close at $1.88. Today, its shares were up 6 cents to $1.94. Netpliance said it had more than 44,000 subscribers using its I-opener appliance at the close of the second quarter, up from 21,000 at the end of the first quarter.

Cidco sells its MailStation through retail stores such as Target, RadioShack, Best Buy, Office Depot, Staples, Kmart and CompUSA.

 

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