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David Talbot

A View from David Talbot

Helio's Hard Times

Helio offered the feature-packed Cadillac of the mobile Web, but it couldn’t make money.

  • June 27, 2008

Credit: Toby Pederson

I had the chance to visit the Helio headquarters in Westwood, CA, last year to write this feature story on the company’s ambitions. Now comes news that Virgin Mobile USA is buying Helio for $39 million, making for an impressive burn rate on the $710 million invested in Helio by Earthlink and the Korean phone giant SK Telecom over three years. (The companies’ initial joint investment of $440 million, which I reported in the feature, was followed by a $270 million infusion from SK Telecom.) Both Virgin Mobile and Helio had been small players in the mobile markets, buying capacity on the Sprint Nextel networks to run their businesses. Helio’s offerings will remain available from Virgin Mobile.

Helio was ahead of conventional American tastes, offering high-end, do-it-all services and devices for the mobile Web. It broke ground with all-inclusive data plans, integration with sites like MySpace and YouTube, and unified e-mail interfaces. Of the many statistics the company loved to toss around, one stood out: 95 percent of Helio users actually accessed the Web from their Helio gadgets. (The rest of us mainly use our cell phones for voice calls or text messages; only 13 percent pay for Web features on mobile phones.)

But while Helio’s most ambitious device, the Ocean, was mechanically interesting, it may have been too much so. It had dual sliders and a full Qwerty keyboard, and its beefy size recalled that of an eyeglass case. But the Ocean was in development at the same time that Apple was secretly developing its own do-everything gadget. The sleek, touch-screen iPhone launched around the same time as the Ocean, and the rest is history.

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