December 12, 2007 – JUST when it seemed that a measure of maturity had come to the handheld IFE market, all hell has broken loose again.

The established players, all two of them, are reminding us that it’s a tough place to make a dollar while, undismayed by the broken dreams littering the landscape, new entrants unaccountably queue up to take their chances.

The rough-and-tumble nature of the game has just been brought into sharp focus by the news that transatlantic premium-only carrier MAXjet has suspended trading in its shares amidst outsiders’ fears about its cashflow position. Events in the handheld world suggest that those worries may have some substance.

Until this autumn MAXjet had offered its passengers handheld IFE from leading provider digEcor. Then the airline switched to Californian-based e.Digital with its eVU device (Inflight Online, November 29). The change was accompanied by hints from MAXjet of underperformance on the part of digEcor, and an announcement that it was in dispute with the supplier. “Not so,” riposted digEcor. “It’s we who have grounds for a lawsuit – they haven’t paid our bills for close to 12 months.”

No doubt working on the “digEcor’s misfortune is our opportunity” principle, e.Digital now finds itself supplying the troubled airline. Perhaps it’s time for the Californian-based company to take the old legal warning and turn it on its head – “Seller beware,” e.Digital?

The same might go for Mezzo, the UK turnkey IFE provider that includes eVU in the package that it supplies to another transatlantic premium-only carrier, Silverjet. Last month the Luton-based operator announced a new £22 million financing package, saying that the money would be used to improve ground facilities and acquire two new aircraft. However, the London Times chose to see the cash injection as a lifeline after heavier than expected losses in Silverjet’s first year.

With around 30 airline customers and fresh business announced only the other day, digEcor still has good claim to the title of No 1 handheld supplier. But it is undoubtedly being run close by IMS of Anaheim, California, with its nimble, COTS-based product development strategy and broader range of content management products and services. But even this savvy firm has recognised that a business plan built on air transport could be precarious indeed.

IMS has just unveiled a major contract from car rental giant Hertz under which it will supply players running Nickleodeon content for hire to leisure travellers at nearly 50 airports in the USA (Inflight Online, December 10). Commenting on the deal, Michael Childers, managing director of IMS’ content and media development group, said: “The extension of our portable entertainment products and content management services to Hertz is part of our strategy to expand beyond airline inflight entertainment and into the broader travel industry.”

It’s the second such move by IMS - at the beginning of September the company announced a contract to provide content management services in relation to the NICE (Network Integrated Cabin Equipment) network developed by Lufthansa Technik for VIP and business aircraft.

Among the wave of bright-eyed new guys – VT Miltope, WiseDV, Nintendo and French avionics company Sodilec all emerged from the woodwork at this autumn’s WAEA show in Toronto – the British Bluebox venture has the most by far in the way of track record, as well as sharing IMS’ regard for the VIP sector as a way of broadening its prospects beyond air transport.

“We’ve got real interest from a couple of VIP charter operators,” David Brown, chief executive of one of the Bluebox partners, said earlier this month (Inflight Online, December 4). “Because VIP aircraft generally have a much smaller number of seats, it has in the past been difficult to put a content package together at a sensible price,” he continued. “But our partner Phantom Media now seems to have cracked that, while our semi-fixed offering is ideal because it’s much more scalable than traditional systems – we can install 10, 50 or a hundred in-seat units, it doesn’t really matter.”

Meantime, Bluebox is in service on growing numbers of aircraft operated by UK carrier bmi and is on trial with an unnamed Middle East airline, with an order expected within the next three months.

Orders are exactly what’s been missing from the escutcheon of Panasonic’s eXpress in recent times. Mexicana popped up at the beginning of last year with an announcement about content provision for its eXpresses, but since then news of this product from the No 1 supplier of embedded systems has been thin on the ground. Ditto Dublin-based AirVOD, with its promising mach5 player, and Transtar, founded by IFE pioneer Dick Bertagna to exploit UMPC technology – both were last heard of a year ago.

Definitely consigned to the Arizona boneyard are putative products from Watermark of the UK and California’s Global AirWorks. The two companies dipped their toes into the water a couple of years ago before evidently concluding that there was a lot more to cracking the handheld business than had originally met the eye.

Nonetheless, the flame of hope still seems to burn bright in the bosoms of any number of would-be handheld honchos. But experience shows that making a go of it in this claustrophobic marketplace will call for a thick skin, sharp elbows and deep, deep pockets.