Ittiam Launches Multimedia Chip For Digital Devices.
1 March 2004
Financial Express
The Financial Times Limited.
Ittiam, the Bangalore-based DSP (digital signal processing) chip company, has just started to license its latest product - a digital media chip, which can form the base of products in the digital consumer goods market. It has already sold 15 licenses to OEMs in Taiwan, Korea, US, Europe and Japan. The third major product family launch from the company, the new chip is what CEO Srini Rajam calls a "Swiss army knife." "Our customers can pick and choose any of them in any combination," he said. This makes the chip a mass consumption product, which increases its potential to bring in revenues. Being a product company, Ittiam's revenues come in from two streams. One is the sale of its technology (or licenses sold) to OEMs; the other is the royalty on the sale of the each unit of each product developed by the OEM. The new chip offers three functions - recording, playing and storage on three media - video, audio and image. Various combinations of these can result in different digital devices.
Ittiam's customers - mainly OEM of digital devices - have already come up with products such as a digital camera and a handheld personal video for inflight viewing. Using Ittiam's new chip, one customer has been manufacturing and selling personal videos for less than half the price in the market. "The customer sells at around $400 per unit, as against $1000 per unit using other technologies," said Mr Rajam. Moreover, the Ittiam chip also makes it possible for the device to run for eight hours at a stretch. "No other product can run for this long," Mr Rajam said. Almost three year-old, Ittiam is just about starting to see revenues coming in from royalties. Around 98 per cent revenues this year would still be from license fees, Mr Rajam said. At the end of four years, royalties ouwld account for 10-20 per cent revenues, and 30-40 at the end of five years, he said. Mobile phone companies are also interested in the new multimedia chip, he said. Today's video capability on mobiles is still rudimentary with low frame rates and resolution. The chip offers video frame rates of 24 frames per sec, which can significantly increase video quality. The automobile industry is also looking at video devices for the passengers in premium cars. Mr Rajam sees potential for the chip in the home entertainment segment too. The privately-held company, which is expected to share its revenues for the first time in April this year, plans to increase headcount from the current 100 to 150 by the end of the year. Product companies typically work in small groups and in the next three years, the headcount is targeted to grow to 250-300 people.
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