SiRF launches starIII, files for IPO: new chip, mobile software target location services

GPS World, March, 2004

GPS OEM manufacturer SiRF Technology has simultaneously introduced a new generation of hardware and software while announcing plans to make an initial public offering (IPO) of stock.

The new products from the San Jose, California-based company target wireless and handheld location--based service (LBS) applications, particularly asynchronous mode telecommunications such as GSM. They include the SiRFstarIII chipset architecture, SiRFsoft mobile GPS software designed to run on host processors, and SiRFloc multimode server technology for wireless communications networks.

Meanwhile, on February 10 SiRF filed a proposal with the Securities and Exchange Commission (SEC) to issue up to $100 million in common stock as part of a renewed effort to take the company public. The company previously filed for an IPO in late 2000, but withdrew its application the following April primarily due to poor market conditions. SiRF seeks to be listed on the NASDAQ stock exchange favored by many high-tech companies.

SiRFstarIII. The new SiRFstarIII chipset architecture, succeeding the SiRFstarIII technology introduced in 1999, reportedly provides the equivalent of 200,000 correlators for processing digital signals, a sensitivity reaching -159 dBm, and a GSM-aided cold-start time to first fix (TTFF) positioning of one second. The previous generation had the software equivalent of 1,920 correlators, a sensitivity of -149/150 dBm, and a network-assisted TTFF of 7-20 seconds. The SiRFRF integrated circuit (RFIC) front-end uses silicon-germanium materials in place of the CMOS and bi-CMOS for previous generations of SiRF technology.

SiRF founder and vice-president Kanwar Chadha says the company's objective was "to totally eliminate the delay" in obtaining a position fix, which he sees as a precondition for widespread adoption of GPS-based LBS applications. Wireless users expect an instant and reliable positioning solution comparable to what they obtain with their phones or PDAs, he says.

Production quantities of SiRFstarIII chips are expected to become available by the middle of the year. The company also will offer the SiRFstarIII intellectual property (IP) core in a modular form for integration into high-volume wireless chipset platforms.

Mobile Software. SiRFsoft mobile software is designed to eliminate the need for a baseband IC by using a portable device's host processor to calculate GPS position. Targeted at microprocessor platforms using Intel's XScale Technology and the Open Mobile Application Processor Interface (OMAPI) championed by Texas Instruments and STMicroelectronics, SiRFsoft automatically uses whatever network assistance data is available, including GSM (04.31), UMTS (25.331), CDMA (IS-801), ARIB WCDMA and PDC, according to the company. When network aiding is not available, the software enables handsets to obtain fixes autonomously.

Offered through SiRF's infrastructure partners in a carrier class network location server, SiRFLoc Server is expressly designed for wireless location-based services deployment implemented by wireless operators or wireless application service providers (ASP). SiRFLoc Server draws on technology developed by Enuvis, South San Francisco, California, which SiRF acquired last year for about $11 million in SiRF preferred stock.

The product supports standard wireless air interfaces and location service protocols, including RRLP for GSM/GPRS, RRC for WCDMA, PDDM for CDMA2000, IS-801 for CDMA and DLP for NTT DoCoMo, and non-standard protocols for wireless ASPs. According to the company, SiRFLoc Server can support both aided network-based or -assisted GPS and autonomous positioning methods, as well as hybrid Cell ID/GPS and other hybrid positioning methods.

Stock Offering. Underwriting the IPO are Morgan Stanley & Co., which serves as the lead bank, and Credit Suisse First Boston, as the co-lead. Deutsche Bank Securities Inc. and Thomas Weisel Partners are also providing underwriting support.

In a consolidated statement of operations included in the SEC filing, SiRF reported 2003 net income before taxes of $3.9 million on net revenue of $73.1 million, compared to a net losses of $12.6 million in 2002 (on net revenue of $30.4 million) and $23.7 million (on $15.1 million revenue) in 2001. According to the company, the 140 percent increase in revenue from 2002 primarily stemmed from a 157 percent increase in unit shipments of chipsets and, to a lesser extent, an increase in royalty revenue on IP core and premium software licenses. Export sales from the United States comprised 87 percent of net revenue in 2003.

SiRF manufactures and markets its products for four target platforms: mobile phones, automotive systems, portable computing devices, and embedded consumer devices.

Ten customers account for 87 percent of SiRF's 2003 net revenue that year, including Motorola, 15 percent; Leadtek Research, Inc., 12 percent; Flextronics Mfg. (HK) Ltd., 12 percent; Siemens VDO Automotive AG, 11 percent; and Promate Electronics Co. Ltd., 10 percent. As of December 31, 2003, SiRF had 71 granted patents in the United States, 96 U.S. patent applications pending, 10 patents granted in foreign countries and 73 foreign patent applications pending.