Interview with Newport Media CEO, Mohy Abdelgany

Frontier Journal(FJ): Every startup has a story, what's Newport Media's story in brief?

Mohy Abdelgany (MA): I come from the wireless chip industry but I didn't want to form a company around yet another cellular RF chip - in that business it takes $40 million or more for research and development to create a me-too product that sells for less than $2 and has terrible margins. But I knew I wanted to stay in the handset space and believed that TV is the next big thing after the camera module. So I became very interested in the development of highly integrated solutions for emerging digital audio and mobile TV broadcasts standards. Our development team has extensive collective experience in the two key drivers for this market: broadcast multi-media architectures, and wireless IC implementations with unprecedented performance, power efficiency, size and cost. Plus, we've got a highly experienced team with many years of selling into this market and long-term customer relationships.

FJ : What are Newport Media's unfair advantage and core competencies as a fabless semiconductor company?

MA: We decided early on to design our products as system-on-a-chip integrated devices to optimize performance while giving customers one-stop design convenience. Because of that, we're considerably ahead of where our competition is on the technology evolution curve. Our focus on system performance, scale of integration and implementation optimization will enable our customers to develop handsets with high-performance mobile TV at very attractive price points and form factors.

FJ: Could you elaborate Newport Media's key strategies and tactics in exploring the emerging digital audio and mobile TV broadcasts market? How do you position Newport Media in this highly competitive market?

MA: The company has focused its attention on solving critical mobile TV handset integration challenges, including the elimination of interference problems caused by extremely close proximity of mobile TV circuitry to WCDMA, EDGE, GSM and CDMA transmitters. Newport Media has developed a proprietary single-chip system architecture that will significantly reduce the size, cost and power requirements for adding digital TV capabilities to mobile handsets, so that broadcast multimedia content can become as ubiquitous in the handset as cameras and color displays. Our system architecture combines a tri-band, direct-conversion radio and a high-performance OFDM demodulator in a single device with roughly half the power consumption of competitor's solutions. This SoC approach is key to delivering high performance while reducing the power requirements for mobile TV. Also, our system platform accommodates all key standards which will enable us to serve diverse customer needs while fielding a comprehensive portfolio of products.

FJ: May we have some detailed information of your Sundance Series (tm) Mobile Broadcast Media IC products, its value, differentiation, scalability and stickiness? E.g., What are their targeted applications? What is the enabling technology? Who are your reference customers (if any)? Do you have strategic partnerships? Are there any regulation issues involved? Do you offer IP core licensing to third parties?

MA: The Sundance Series platform of products will comprise single chip tuner/demodulator products as well as individually packaged tuner and demodulator solutions. All Sundance Series solutions will use low-cost complementary metal-oxide semiconductor (CMOS) process technology. The platform will support all popular mobile TV standards including Digital Video Broadcasting-Handhelds (DVB-H), Digital Video Broadcasting-Terrestrial (DVB-T), Digital Multimedia Broadcast (DMB), Integrated Services Digital Broadcasting-Terrestrial (ISDB-T) and MediaFLO. The platform will also offer advanced features that significantly improve system performance, reception quality and design flexibility, while enabling capabilities such as personal video recorder (PVR) functionality previously available only in full-sized set-to-box (STB) products. The design of the Sundance Series platform of mobile digital TV products will lead to easy integration in cellular phones, portable media players, PDAs, portable gaming devices, notebook PCs and automobiles. Once customers are exposed to type of user experience our chips enable, we are confident Sundance Series products will become the benchmark for mobile TV performance. We cannot yet name reference customers or strategic partners, there are no major regulatory issues involved, and we have no plans to offer IP core licensing to third parties at this time.

FJ: Could you introduce your start-up team to our readers a little bit?

MA: This team is truly an all-star lineup - each member of the team has more than 20 years of experience in cell phones, semiconductors and the integration of different technology standards. The team includes our COO, Luke Smith, who was previously president and CEO of a fabless PMIC company in Ottowa called Potentia, and prior to that was COO of Philsar. Our vice president of baseband engineering, Mohamed Ben-Romdhane, was previously an executive director of SoC patforms at Conexant Systems. And our vice president of marketing and sales, James Kamke, was previously CEO of Spectra Wireless and, prior to that, was vice president of business development at Sequoia Communications after having served as vice president of product marketing at PrairieComm. As for me, I'm a 20-year industry veteran who previously was with Rockwell Semiconductor Systems for 10 years, building its wireless division from nothing to $750 million in sales in what is now the spinoff, Skyworks Solutions, Inc., of Woburn, Mass. Other key members of our team include our investment partners -- Oak Investment Partners, Benchmark Capital, Venrock Associates, Global Catalyst Partners and Pinnacle Ventures.

FJ: Newport Media was named a Red Herring 100 Winner, which is quite impressive, why Newport Media surpasses others to be listed in the Top 100?

MA: Red Herring was looking for new companies who were taking on the established players with disruptive technologies and innovative business plans, and pushing and breaking the boundaries of the technology business. We are doing just that with our SoC design approach for mobile TV - ours is the most comprehensive solution on the market today and will allow us to compete very successfully with the significantly larger developers.

FJ: What are Newport Media's Strength, Weakness, Opportunities and Threats (SWOT)? Regarding Opportunities, what are the biggest emerging opportunities for Newport Media?

MA: Our biggest strength is the team we have pulled together -- the initial progress that this team has already made in developing system-on-a-chip products for this market is truly unprecedented. Our biggest weakness is our small size in comparison with some of the titans who are eyeing this market, but we've played this to our advantage by leaping out to as much as a 6-month headstart against these competitors. Our biggest opportunity is in the DVB-H market, which many industry analysts have pegged as the dominant way that broadcast services will be provided to mobile devices, but we also have an edge in that we can use our core technology to support all popular standards including DVB-T, DMB, ISDB-T and MediaFLO. Our biggest threat is industry's general lack of visibility into market deployment - in any new technology, there is always uncertainty about market timing. When the market does ramp, though, it is expected to be very rapid -- ABI Research recently reported that In 2011, mobile TV services will have some 514 million subscribers worldwide, up from only 6.4 million at the end of 2005. We believe that within a few years, 40 percent of all cellphones will be able to display television broadcasts.

FJ: Do you envision any Strategic Inflection Point (SIP) in your business within your targeted market? If yes, how do you cope with that, I mean before it happens and after it happens?

MA: It's your typical chicken-egg scenario - content/services will drive adoption rates, but not until the core handset technology is available, which won't happen unless there's strong anticipated demand for the content/services, and so on. The inflection point will arrive when network/service rollout and device availability jointly reach the necessary level for the market to reach some measure of critical mass. We see that happening sometime in roughly the 2008 timeframe, following 2 years of trials and early-adopter deployment.

FJ: You've been in this industry for near 2 decades, what are the "signal" and "noise" in your currently targeted market? Any IPO plan for Newport Media in mind so far?

MA: The "signal" is the undeniably strong demand for television and on-demand video content wherever you are, whenever you want it. Consumers have proven time and again that whatever you can put onto the Internet, people are ultimately going to want on their portable devices, and we believe TV and on-demand video is that next big thing. The "noise" is debate surrounding how we're going to get there. We believe that a highly integrated SoC platform built from the ground up for mobile TV and on-demand video is the right way to do it, leveraging integration to pack more features and performance into smaller, lower-cost devices. As for an IPO, our focus right now is to establish ourselves in the market with a quality mobile TV solution. We recently announced a major round of funding that will allows us to continue to complete development for our Sundance Series platform and bring first products to market.

FJ: What else would you like to bring our readers' attention?

MA: We're very excited about this market and our prospects for capturing a sizable share of it. We're well ahead of the competition on the development curve, have an enviable team with a rock-solid track record, and we're extremely well capitalized and poised to begin shipping firsts products this year to an A-list of lead customers. We're also excited about the new services that our technology will be enabling in the very near future. No one disputes how dramatic television's impact has been since its emergence in the 1920s and 30s. We think the migration of television and associated on-demand video services to the mobile platform will have an impact of at least similar - if not greater - magnitude, and we're thrilled to be a part of it.


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