Zi Corporation, best known for its predictive text entry software, has secured an agreement with a ‘major multi-national’ operator for the rollout of its Qix product. It hasn’t named the new customer yet, but the deal represents a significant breakthrough: previously Virgin Mobile had been the only publicly announced deployment.

Qix is a difficult product to define. It works by indexing all of the content and applications on a handset, allowing the user to access anything from contacts to bookmarks simply by entering a few letters from the device’s idle screen. In this way it combines aspects of an on-device portal and search engine, while supplementing or altogether replacing the menu functions of a handset.

The result is extremely intuitive. It eliminates the latency caused by using different key combinations for different functions. Rather than having to remember applications are accessed by opening a menu, navigating through folders and selecting the correct icon, users can simply enter the first few letters of the application name and are presented with a direct link to the program. Qix leverages users’ familiarity with predictive text input to great effect and provides a single interface method for accessing almost all of the functions on the device.

Virgin Mobile reported a 33 percent increase in ARPU from devices equipped with Qix. That’s a compelling argument for widespread deployment.

The difficulty Zi faces is convincing operators to experiment with an interface which sounds much more complex than it really is. I too was skeptical until I tried Qix for myself and found it so useful I actually changed my handset to one which supported Zi’s software so I could continue using it day-to-day.

If Qix becomes widely adopted, it will alter Zi’s strategic position within the industry. It has previously been regarded as supplier of embedded software to handset manufacturers, generating revenues from a steady stream of licensing royalties. Qix puts Zi in competition with on-device portal vendors and an emerging breed of search tools. It has the potential to serve as the main interface for the handset and demonstrate a direct link to revenue increase for operators. As such, Zi should be able to command a premium licensing fee.

This first major operator deal will be structured as an upfront payment and ongoing royalties. That is a considerable success in itself given the tendency for on-device portal vendors to support free ‘trials’ without actually generating any revenue in an attempt to build market share and gain a competitive foot-hold.