Gizmondo execs launch new mobile venture

Following the demise of handheld gaming firm Gizmondo, three of the company's top executives are launching a new mobile phone company in the US.

According to the Financial Times, Xero Mobile is being established by Peter Lilley, who previously ran Gizmondo's Smart Adds operation. Through Smart Adds, consumers were offered money off the price of a Gizmondo unit it in exchange for agreeing to receive regular advertisements on their handheld.

Lilley is setting up the new venture together with David Levett, who was formerly a chief software architect at Gizmondo, and US Gizmondo producer Rich Clayton.

Xero Mobile will offer mobile phone users free airtime if they agree to allow adverts to be sent directly to their handsets. The service will target college students, and Xero Mobile aims to have five million customers - which would enable it to break even - within the first year of launch.

The Financial Times also claims that Carl Freer, who resigned as CEO of Gizmondo in October 2005, has been helping to raise investment funds for Xero Mobile. An estimated USD 92 million is required to get the service up and running, and the company predicts earnings of USD 1.8 billion before tax, interest, depreciation and amortisation within the first three years of operation.

According to some rumours, USD 300 million has been already secured in investment financing, mainly from European sources - however, it's not clear where the rumours are originating from. Nor is there any available data regarding how successful Smart Adds were, or indeed how many Gizmondo units were actually sold.