Mobile Stream and MobiHand
Monday, October 1, 2012 at 2:20AM I received this email over the weekend from Anastassiya at Mobile Stream which adds some detail to the Mobihand situation.
For many years, we at www.mobile-stream.com have been developing mobile apps. Our palm apps such as Landscape for Sony Clie, Card Reader and USB Modem have been among best-selling apps with PalmGear and other resellers. Our Android app EasyTether is very popular at Google Play store and Amazon. We've sold our apps via MobiHand, unfortunately.
Now it is almost a year since I've been trying to get our earned royalties from MobiHand. In October 2011 they simply stopped paying saying they have no money. Which was obviously fishy. Because they billed customers, got 100% money from the buyers, but then did not pay to developers. I've been waiting for months, no result. In February 2012 I filed a lawsuit with San Mateo court, lawsuit number is CIV511913. You can check the lawsuit at the court website (type in MobiHand in the search field).
After the court settlement they started to pay something, by that time they had been using my royalties for many months "to finance their new projects". And we, developers, had to support customers without being paid.Then MobiHand defaulted even on the court's settlement (as can be seen from the court website). Now as they filed for bankruptcy, I'm simply without money, with thousands of customers to support. Their debt is $20667, to say nothing of the interests for using our royalties for a year!
They did not inform me of their bankruptcy, they simply purged all statistics and reports from their website (though the agreement required a 30-day notice). Of course, no explanation why they decided to cheat a developer with popular apps who helped them to earn much money.
There are other developers who suffered from their unpayment, though their debts are much smaller.
This case creates a dangerous precedent: any app store, any payment processing company, any reseller can at any time stop paying and there will be no punishment. Then they declare themselves bankrupt and developers are left with losses, without money and with many customers to support.
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Reader Comments (3)
Not really? Reliance on a third party to take payment and pass it through has always been a risk, in the real as well as digital distribution worlds.
It's obviously unfortunate for all concerned, but it was not an unforeseeable risk, to my mind.
You'd like to think that someone would do a cursory glance at the financial behaviour to check the obvious (such as what the "New ventures" are, and that they're part of the assets of the bankrupt company and not a stitch up).
First mistake was they let it go on for so long before taking any action....
My guess is mobihand was trying to stay afloat paying staff and other costs first and without having enough of a revenue stream to support those costs due to lack all the app markets that have left them out in the cold.
Would also just like to say that this occurs all the time and there is very little you can do about it. My wife and I once had to take a supplier to court. We won with full judgement only to have the company turn around and declare bankruptcy, which I solicitor had advised us would be the case. We went ahead and did it anyway as I wanted the black mark on their name, the inconvience they would experience with the case, and having to set up their business again but having to do it with different directors etc. 7 months later they were back up and running but with "completely different people" at the helm - according to their papers. But I like to think that at least we go them back for the trouble that they had caused us and possibly we had made it a bit more difficult for them to continue their dodgy practices in the future.
More of us should do the same, plus we should all support programmes like Watchdog more as this is really the only way to solve issues like this - it takes time and effort but eventually you get better results, and we can always hope people turn over a new leaf.