News Column

Austin chip designer looks to make mark in wireless world

July 26, 2014

By Brian Gaar, Austin American-Statesman

July 26--An Austin chip designer is about to start playing with the big boys.

Nitero, which specializes in wireless products using 60 gigahertz transmissions, recently unveiled a product line that promises to bring a superfast wireless Internet connection to your smartphone.

Known as WiGig, the new technology essentially promises wireless connections that are several times faster than most current WiFi ones, albeit at very short ranges. WiFi operates in two main frequency bands, 2.4 gigahertz and 5 gigahertz. WiGig operates at 60 gigahertz, and is estimated to send data three to four times faster than the fastest version of WiFi.

Nitero's CEO Pat Kelly says his company's chip, which is set to begin volume production next year, differs from competitors because it was built with mobile in mind, from the ground up.

"I can't at this point talk about the level of interest or any specific customer, we're not ready to do that yet," Kelly said. "But we have had customers say that, 'Hey, if you can get this to us in production next year or sooner, as soon as you can get that to us, we're going to put it into a phone.'"

It could be a huge market for Nitero -- because if the new technology is adopted, the major smartphone makers would presumably all jump on board.

"The market for 60 GHz WiFi is set to pick up in a big way in 2015," said Philip Solis, research director at ABI Research. "Nitero is one of the few companies that will have 60 GHz WiFi modules ready for mobile products next year. The company makes a perfect complementary solution to WiFi chipsets from companies that will not have 60 GHz solutions ready next year or have not planned for it in their roadmaps."

But there are some big players getting involved in the market, too.

This month, wireless chipmaker Qualcomm Inc. said it is buying startup Wilocity, a bet that a high-speed wireless technology will become a standard feature on smartphones and other products.

Financial terms weren't disclosed. Online publication TheMarker in May reported that a deal was imminent, putting the price at $300 million.

Wilocity, founded in 2007 and based in Sunnyvale, Calif., is one of a number of companies pursuing WiGig, which operates at a higher frequency than the more familiar WiFi technology and is used in different kinds of applications. But unlike traditional wireless, WiGig broadcasts a much shorter distance (a maximum of several meters) and can't pass through walls, so it won't replace regular home WiFi.

For example, companies have proposed using WiGig for replacing wires to send video between components in the same room. Amir Faintuch, president of the unit called Qualcomm Atheros, said the technology could help transfer multiple video streams using the new technology called 4K, where Wi-Fi can only handle one.

"If you are a leader in WiFi you have to have WiGig," Faintuch said. "If you don't have it in time, you have a problem."

Qualcomm will have a lead in WiGig "given Wilocity has been shipping in devices for six months," said Patrick Moorhead, an analyst at Moor Insights & Strategy. But he said Intel Corp. and Broadcom Corp. will be "hot on their tail."

Nitero was founded in 2011 and is headquartered in downtown Austin with design operations in Australia.

Since 2011, the company has been growing substantially, Kelly said, and now has about 50 employees. About half of those work in Austin, he said.

"Austin actually just ended up being a great place to have the headquarters -- you've got the talent and then (opportunities) on the investment side as well," he said.

To date, Nitero has raised $13.7 million from backers including Austin Ventures, Southern Cross Venture Partners and Trailblazer Capital.

Nitero's first product is intended for mobile and display/peripheral devices, with production shipment slated for next year. Product demonstrations are already underway with select partners and customers, none of whom Kelly would name.

Like other analysts, Moorhead said the technology is very promising.

"WiGig helps remove the video cable and nearly any other cable, for that matter," he wrote in a column for Forbes' website. "I'm looking forward to the day where I can walk into my office and drop my PC, tablet, or phone on my desk and I can start doing work right off that very device without plugging in any cables."

It will also allow the transmission of extremely high-quality video, known as 4K video. Also known as "Ultra HD," 4K resolution is a display device or content having horizontal resolution on the order of 4,000 pixels.

"While for many, the bottleneck today has been the speed of the Internet, as the size of the files we want to share and internet bandwidth increases, the bottleneck would become WiFi," Moorhead wrote. "And that's where 60 GHz comes into play.

Kelly says he expects Nitero's chips to be in top-tier smartphones when the makers eventually adopt the technology. It also has potential for high-speed video distribution (imagine quickly downloading a video from a retailer like Redbox).

And Kelly said that could just be the beginning.

"The interesting thing is we've talked to a lot of the TV makers and because the smartphone market is such a big market, that as soon as the smart phone adopts it, the TV guys have said they will immediately start putting it into TVs," he said.

Additional material from The Wall Street Journal.


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