A spin-off from the Swiss Federal Institute of Technology Zürich (ETH), u-blox AG, has shed its project-oriented roots to take a technically leading position as a vendor of Global Positioning Systems (GPS) chips.
Its competitors include GPS pioneer Sirf Technologies, the wireless giant Motorola and a host innovative start-ups.
Two years ago u-blox took the big leap to change its product focus from developing global positioning system modules that relied on integrated circuits from another to developing its own chips.
According to the firm, these new chips, called Antaris, are more accurate, cheaper, faster, smaller, require less power, and are easier to program than the competition's. The chips have been available since December.
u-blox has achieved three "design-in" wins, which means that three end-user equipment manufacturers are designing and developing new products that will include its chips. Ten more potential customers are testing prototypes.
Revenues from projects
The five-year old company originally made money by developing positioning systems and modules for a diverse group of customers who would buy in relatively small amounts generating revenues of about SFr 10 million last year.
Anyone who has seen those white cigar-box sized flashing units on the dashboard of oncoming transport trucks in Switzerland is looking at a road tolling system made by u-blox.
The new chips will enable it to sell in volume to existing customers, such as Siemens, General Dynamics, and Thales Navigation, but also new customers in the mobile phone and car navigation markets.
It is a "fabless" manufacturer of chips, which means it markets and designs the chips itself, but the silicon is processed and packaged at a foundry, in this case Atmel is the foundry partner.
This is a tough business with tight margins and it is all about balancing cost and performance. u-blox's chips enable a GPS module at a price point of less than €40. The chipset alone is less than €15.
"Since we started shipping the chips to customers starting late in December, we've already had good feedback on the user interface and software engineering of the chips," says Hans Ulrich Mueller, a board member representing the company's lead investor, the private equity firm Partners Group, based in Zug.
Positioning to go global
There are at least two competitors in Switzerland alone.
Switzerland is a natural breeding place for this kind of semiconductor application because positioning chips for portable devices need to be very low-power and yet highly precise.
These are skills that some of the engineers at u-blox and its two Swiss competitors, Nemerix and Xemics, have drawn from experience in designing systems for the watchmaking industry.
Nemerix and Xemics are hard on the heals of u-blox, both launching similar low-power, small form factor chips on the market. Its other competitor, based on size and performance, would be fastrax, a Finnish startup.
For a startup company based in Europe the challenge is to convince large international equipment manufacturers that it can deliver quality products that outperform the competition and that the firm is financially secure.
"It took Qualcomm executives, for example, three trips to Thalwil before they were convinced of the technical lead and quality product we could offer," says Claus Habiger, VP Strategic Partnerships at u-blox.
According to Mueller, u-blox is currently shipping about 20,000 of its GPS modules and related products a month to customers worldwide. The firm expects to break-even this year after raising about SFr 24 million in venture capital to-date and employs 40 people, about half are R&D engineers.
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