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Analysis: Merger sparks hope for UWB market

Posted: 24 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:UWB? startup merger? wireless USB?

The announced merger of UWB startups Staccato Communications and Artimi Inc. offers a way forward for others in what one executive recently called a venture capital winter. The combined companies now have a broader portfolio and funding through 2010, at which point they believe the economy will be resurging and UWB technology gaining traction.

Venture capitalists are reserving cash for existing investments, refusing to fund new startups, said Howard Bubb, CEO at processor startup Ambric which closed its doors this week after failing to find a new investor to lead a series C round. The Staccato-Artimi combination created a new $20 round by pooling investments that only needed to tap current investors in the two companies.

"The money that would have been committed by Staccato investors was a reasonable amount, but we wanted a runway through 2010 to be capitalized well into the period where this economy starts to recover," said Jeff Chang, VP of marketing at Staccato.

One downside to the move is the combined company will trim staff to 85, laying off people from both startups. Staccato alone employed about 75 people before the merger.

Market exit
In early September, even before the troubles on Wall Street unraveled, an analyst said the UWB chip area was ripe for a shakeout with as many as a dozen players and a high bar for success. Since that time WiQuest Communications folded, Stonestreet One sold off its small UWB software business to startup Alereon and Intel said it ended an internal effort to design UWB chips.

More shoes are likely to fall. "I think you'll see more news [from UWB companies] over the next six months, then the noise will go down and we will get back to getting products out," said Chang.

The UWB sector is something of a canary in the mine for many other venture sectors that will come under pressure in tight economic times. Any startup that needs funding in the next 12 months may not survive.

Merger outlook
UWB has had its unique challenges. The technology has been plagued by problems seemingly on every frontperformance, power, price and global regulatory conflicts with significant market penetration still at least a year away, according to some observers.

Staccato has a better than even chance with its RipCord2 product which delivers on several of the technically challenging market requirements. The integrated single CMOS chip implements support for the so-called upper bands of spectrum needed to ship a single product into multiple countries and may be able to hit the sub-$5 price targets OEMs demand.

For its part Artimi has a media access controller (MAC) but it requires a separate PHY chip. The merged company will continue to sell the device and back Artimi's work-in-progress on an integrated MAC/PHY expected to ship in early 2009.

The new Artimi chip uses a relatively fast interface to target throughput up to 150Mbit/s, meeting requirements for devices such as docking stations, wireless external hard drives and projectors. A version of Staccato's RipCord2 for peripherals will be aimed at digital still cameras and other embedded systems that like its lower power consumption and SDIO interface.

Staccato also plans to port to RipCord2 UWB software Artimi developed for a range of devices including mobile systems and HDTVs. Artimi also has software to enable easy sharing of point-to-point external devices that can link notebooks and projectors wirelessly without requiring users to install new software.

"We'll take the best of both worlds," said Chang.

The big question now is will OEMs embrace UWB, and if so, when. An economic downturn may force some system makers to hold off on adopting new technologies and their added costs.

But Chang said he is hopeful other OEMs will see the technology as a way to differentiate systems, particularly for notebook makers using otherwise standard systems platforms from Intel and AMD.

"The notebook market is the anchor for wireless USB" one of the leading protocols for UWB, Chang said. "Most of the companies making embedded systems like digital cameras have been waiting for notebook adoption."

He pointed to a simplified Lenovo notebook that does not come with a docking station, inviting wireless as the easiest link to peripherals. "I think we'll see more of that," Chang said.

In the end, the success of wireless USB will depend on such user scenarios that demand wireless links for convenience rather than any killer app, he said.

- Rick Merritt
EE Times

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