PRKR 2010.05.12 MDB Conf
Man: When you look at truly disruptive innovation, you start to see numbers 20, 30, 40 percent; in the case of ParkerVision 84.5 percent. Again, that's number one for 4000 companies in PatentVest . And so the point being ParkerVision is really a unique company from the standpoint of having barriers to entry and truly game‑changing technology. And with that, I'd like to introduce Jeff Parker, CEO of ParkerVision.
Jeff Parker: Well, thank you. I really appreciate MDB inviting us to this conference, and it's been a terrific couple of days. We've had many, many one‑on‑one meetings so they've kept us super, super busy. And so hopefully, in this session, some of those that we haven't had a chance to see on a one‑on‑one, we can give you a little bit of background about our company and technology products and answer some questions you might have. So, just a high level overview, we are a company that's developed some radio frequency technology based on some very novel approaches to both sending and receiving radio signals.
If you look at how the traditional radio signals are created, especially in mobile products like your handset, they're using linear analog circuits that have been deployed now for many decades. And those circuits are running up against quite a few challenges in terms of power consumption being greater than what many handset OEMs would like to see, especially when you get to complex signals like 3G signals and the 4G signals that are coming.
Our technology changes the relationship between how a signal can be generated in its linearity or its fidelity and the amount of power consumption that it consumes. We'll talk a little more about that in a minute.
Our focus right now is really on mobile handset space, and it's because we really bring a nice benefit to that space in power savings and that space is now really seeking ways to link battery life in 3G/3.5G phones and certainly what we see coming in the emerging 4G space as well.
And we feel, you know, it's taken us a number of years to get our technology to the point where it's ready for handset adoption, but we're finally at that point, and we think we're very well positioned for a launch. And we believe you'll be hearing what we anticipate this quarter to be our first design win with a mobile handset OEM, and we're excited for a company that's been taking quite an investment in both time and money to get to this point.
I won't go through the PatentVest matrix and we just heard about those, but we're very appreciative of being included in this conference and the fact that they have a thoughtful process for analyzing intellectual property and putting a score to the depth of the IP.
We also were very pleased yesterday to get a Provectus Award from MDB. I appreciate not only their leadership in what they're doing in this industry, but their vision in how intellectual property and its importance is going to continue to grow, especially in some of the emerging nations that are going to play a larger market economic role in the world.
Back to our technology: If you just have a high level look at how a radio signal is sent today out of your handset, you'll start with the baseband processor that generates the data signal that feeds into a linear analog RF transmitter, which is typically a separate piece of silicon that goes into a linear analog power amplifier and ultimately in the 3G phone through a filter called a duplexer and out to the antenna. The circuit architectures, the analog circuits have been the same basic architecture for many decades now.
But I'll give it that the materials have gotten better. The semiconductor materials, some of the filter materials, certainly have helped this type of a traditional approach improve, but the problem in the space is that these circuits consume more power. They generate more heat as a function of consuming more power, as the RF transmitted signal becomes more complex.
So, if you looked at a 2G GSM handset with a thousand milliampere hour battery in it, you know, you might get six or seven or even eight hours of talk time. But then along comes the 2.5G edge signal and now maybe you're down 20 or 30 percent, and a 3G signal, maybe you're down in half. And the 4G signal even less. So, it's not uncommon for many of reviews that you see today on 3G handsets to give lots of nice flaws and features of a handset, but also point out the short battery life.
What we replace is basically what the function of the transmitter and the art of power amplifier is doing with the technology we call D2P, which is direct to power. We go right from the baseband signal with no intermediate modulated radio carrier to a radio carrier in one step. It's a high efficiency technology. It's built out of all silicon. We don't use any gallium arsenide, which is typically used in the power amplifiers and handsets today, although there's some silicon power amplifiers, but they're minority.
And our architecture is a nonlinear switching architecture. So, the high efficiency, nonlinear switching architecture and the whole thing is put in a single package. So, when it goes into the handset it's pre‑calibrated, it's tested, and it will eliminate some of the manufacturing steps today that they have to do on the production line.
The benefit though that people are really looking for out of our technology is they want to consume less power. They want to generate less heat in these handsets, and they still expect very good or even better quality signals for the 3G/3.5 G signals, and that's exactly what our technology delivers.
So, the challenges that you see in the market today, we are addressing is adoption of 3G networks, of course, is on the rise. The applications for using data on the networks is certainly on the rise. The complexity of these phones also on the rise, and battery life is going down.
And people say, "Well, why will your technology be adopted?" And from the conversations we're having with handset firms, I candidly tend to believe that the reason our technology will be adopted is because handset firms are looking to distinguish themselves from the crowded market of handsets, and one of the features that people are very intrigued by is the extended battery life ‑ the ability to go out with handsets that are exceedingly short battery life, the experience that people are having with 3G phones today.
To give you a little quantification of that, we actually put together with a baseband partner some sample working 3G handsets late last year. And if you look at the range of power that that handset has to generate in terms of power, RF signal powers to the base station, you know, when you're on the edge of the base station, you're generating full power and when you move nearer to the base station, the power of the handset is reduced.
But, we mapped all of the saveing that we provided ‑ the power savings in the d2p phone versus the traditional phone. And in the sweet spot of where that handset operates ‑ meaning it's not on the edge of a base station and it's not underneath, it's kind of somewhere in between those two ‑ we save up to a 170 milliamps of power, which is a huge amount of power.
An entire handset today, in a voice call, might consume 520 to 550 milliamps. So, knocking 170 milliamps off is a lot of power.
People have asked me how does that compare to the display function of the phone. If you were to look at the display on a smartphone like an iPhone or the HTC phone, you see that those displays, depending on where you have the brightness setting adjusted, could be anywhere from about 75 to 150 oto170 milliamps.
So, what we're saying is that our technology saves as much power as the entire display consumes and then some. What that translates to is up to about an additional 60 percent in talk time.
So today, if you were to have a phone with a 900 milliamp battery and you were getting 2.25 hours of talk time, with our technology you could expect more than 3.5 hours. So a significant increase just by the savings of power from the transmit chain itself.
The other thing is our technology produces less heat. And this is always an issue the handset guys, because they're trying to pack more features in. They're trying to keep these phones thin. A lot of them are not vented. They're trying to keep the water out of them.
And so it's not uncommon for the power amplifiers in the 3G applications today, when you're on the edge of a base station and trying to maintain full power, to run up close to 200 degrees Fahrenheit, which is pretty hot, for any of you experiencing holding your phone and feeling that heat.
Because of how efficient our technology is, we can reduce that heat by about half. So, if it's at 200 degree Fahrenheit running full power, we're running at about 100 degrees.
So, you kind of converge all that together, we provide a very nice level of integration, very low heat, great efficiency, low current consumption, good yield ‑ because the whole thing comes in a single unit on the production line. We work with our baseband partner today to provide a complete reference design, which makes a good starting point for handset OEMs.
Our product timeline, we delivered our sample phones to our baseband partner in the fourth quarter of last year. They've tested those, they've approved those. Then the first half we went out and started showing reference designs of the phones to our baseband partner's handset customers and started getting a lot of interest in this.
Shortly we'll actually have production quantity samples available of D2P - our first 3G offering. And the second half of 2010, we'll begin volume production, and then an additional product offering coming out later in the year for additional frequency bands. We started in a particular frequency set of bands, because that's the most volume that our baseband partner operates in, and we'll expand to their other geographic areas a little bit later this year.
So, kind of the business drivers this translates into for ParkerVision, our mission is to become a leading provider of RF technology through these chip sets. We focused exclusively on this technology the last five or six year, and we certainly have a culture within our company that is very innovative and is supportive of this type of development.
Our initial product, as I said, was for 3G handsets, where we solved the significant challenge of battery life and the heat issue that some of these companies were having.
And if you look at the size of the market today, the mobile handset market of course is well over a billion units. Our particular focus on 3G enabled handsets has grown to about half of this total market by around 2013. I think it's something like 350 million to 400 million unit range.
We're very well‑positioned right now for 3G and expanding in the coming next steps to the 4G space. Our initial target space is about 220 million to 230 million handsets per year. If you look at the specific 3G space that our baseband partner focuses in on, that's what currently is shipping this year predicted.
We see after this particular launch, we'll pave the way for our next initiative, which is multi‑mode headphones and also 4G LTE.
People ask me all the time if you were to make your best prediction on where you're going to take the technology next, probably the closest application to mobile handsets that we could take our technology in next would be in things like femptocells, picocells. Base stations certainly are very different from what you do in a mobile handset, but the technology certainly has put ParkerVision, the company, [inaudible 12:55] into that space. But maybe through a partner we could realize it.
So, our target customers today is typically the large mobile device OEMs and ODMs. Our baseband partner today, if you look at their market, we're looking at targeting about 40 million to 45 million annual unit shipments to market, based on their share of the market, the growth they're projecting. That would be out of 220 million total phones shipped, that would be what we would see as their potential for us to really go partner with them.
We have a manufacturing partner today, a relationship we have with one of the LG companies, called LG Innotek. They have a lot of expertise in taking silicon and packaging that in a module, doing the testing and inventory for those. And there's some other companies who are also very good at the module packaging, test and calibration area, that we're also in dialog with that I would not be surprised become manufacturing partners with ParkerVision.
We also have a relationship today in the military space. We have a relationship with a company called ITT, who is a military contractor, or they have a division of ITT that's military contracting in the communications area. And the government recently funded a small study, of taking one of our d2p cell‑phone demonstration chips and having us re‑purpose that so they could study it for uses in military radios.
We just finished delivering, a few weeks ago, the boards to ITT and the military. They were accepted. We met the time frame, we met the budget, and we exceeded the performance expectations that they had. And so now it's in ITT's ballpark to take those programs forward, and they're in a dialog right now with some of their government customers.
From the value‑proposition standpoint, we think it's a pretty strong value proposition. If you look at the total available market for the space that we're focused on, starting in this year, if you just look at the 3G space, that 220‑million‑unit space ‑ which is 3G and 3.5G, really ‑ it comes out to a little over a billion‑dollar total‑available‑revenue potential. Obviously, ParkerVision will get some percentage of that as we get design wins, but that's a nice starting point for us.
When we add the multi‑mode HEDGE product, which we see happening probably later next year, that jumps up significantly in terms of potential. Both the number of handsets that would represent our market potential jump up from that 220 million up to almost 800 million, and accordingly, the total available market opportunity jumps up with it to almost $5 billion. And it continues to grow.
So, this slide is just simply to say there's a lot of market out there for ParkerVision to certainly go work with, and it certainly doesn't take a large market share for us to have made this particular focus of our company a good starting point.
Just a little bit about the technology. We've truly taken a very unique approach to the methodology that we've employed. Of course, when you take a unique approach after many decades of doing something the same way, you get your share of people who are skeptics and who don't understand or don't want to understand how your technology works. But, at a high level, what we're basically doing is we're taking what's today linear, analog circuits and we're replacing those with non‑linear circuit processes and processing.
The problem today with the linear, analog circuits is they really force a trade‑off, especially in these complex waveforms of 3G and 4G, between how much linearity can I generate out of my antenna and what kind of efficiency can I achieve at the same time. And there's always this trade‑off that these designers have had to struggle with. If you don't care about power consumption, using analog, linear transmitters, you can make beautiful signals, but they tend to draw a lot of power.
Our solution truly divorces that relationship, not completely divorces the relationship, but it changes the relationship significantly. And it also enables us to do some things with the silicon, whether it's CMOS or silicon‑germanium, that is much more difficult to do in a linear architecture, and it tends to force people to want to go off and use things like gallium arsenide.
From our IP standpoint, we've had the good fortune of working with, I think, one of the best intellectual‑property firms in the country today, which is Sterne, Kessler, Goldstein, and Fox. One of the co‑founders of the firm, Rob Sterne, sits on our board of directors. We're the only public board that he's ever sat on. He has a real love for the art of radio itself. And he has represented companies like Qualcomm, Google, Johnson and Johnson. It's a who's who. You can go to their website and take a look.
And so Rob understands exactly how the technology works. And he helped us architect a patent strategy at the beginning, to make sure that we would be able to do at least three things. Freedom to operate, make sure that we can use our own technology without having someone come in and say, "No, we already have a blocker." Number two, we want to protect the technology. We don't want people just going off and practicing it. And we want to be able to sell the technology, whether it's the licensing agreements or through the product.
So, we have quite a patent portfolio right now that's in the works, and we try to cover our inventions, from the methodology, apparatus, implementation, and, of course, the exact design itself. I think it was this very thoughtful approach to creating a patent portfolio around this technology that's one of the reasons we got our Provectus Award yesterday. It takes a lot of time and a lot of discipline to do it, but I truly believe that it will pay off for ParkerVision.
Within the company itself, the invention process is kind of integral. Our engineering staff truly understands the benefit of capturing intellectual property, and it's the visceral part of how we go about developing products today.
That's pretty much the presentation. And I think we have, maybe, a few minutes left to talk, so I'm happy to answer whatever questions I can answer for you guys.
Man: Jeff, thanks very much, and we appreciate you telling us the story. Breakout is in breakout room number one.
Jeff: Thanks. [applause]
Transcription by CastingWords