US 60 GHz wannabe SiBeam has been sold by investors for $25 million after 6 years of trying to send wireless signals, including HD video, across a room. The company absorbed $112.5 million in venture funding, with the last round only one year ago being for more than the company has sold today.
This almost certainly means that the SiBeam inspired WirelessHD is no longer a contender to dominate the in-home wireless video distribution market, which will leave WiGig still in the frame as well as boring old WiFi with some tweaks ‘ our personal favorite.
Investors in that last round included US Venture Partners, New Enterprise Associates, Lux Capital and Hatteras Funds with both Best Buy and Cisco putting up some cash, in total some $36.5 million.
That money was to take the product to market and should have been the last round of funding, and would have tried the patience of those who invested back in 2005. The fact that the company either needs to be sold, or more likely took an opportunistic offer, seems to imply that SiBeam’s gamble to create a chip which offered both WiGig and WirelessHD capability, has failed in the market, or at the very least, needs a lot more cash.
However the buyer, Silicon Image, boasts a solid track record in not only creating connectivity standards such as DVI and HDMI, but of making money out of them. It’s revenues are at the $190 million level, and the company has a similar amount of money, $190 million, in cash and short term investments.
Silicon Image could either be buying SiBeam because it truly believes in the WirelessHD 60GHz standard, or as a cheap way into WiGig know how, or both. Either way it is an insurance policy to its vested interest in wired HDMI, one of its core revenue streams, which will eventually flag in favor of a wireless delivery format.
But the deal, and the price of the deal, make it clear that whatever the reason for the purchase, it is NOT because the WirelessHD is doing well, or else the price would have been high enough to recoup all of that $112.5 million.
SiBeam claims that its 60 GHz technology can support the multi Gbps speeds necessary to delivery uncompressed HD video across a room, with the second generation WirelessHD specification claiming to support a data rates up to and beyond 20 Gbps, which will support 4K (4 times 1080p) and Deep Color (with more bits used on each pixel) as well as 3D and will also offer sync’n go file transfers at 1 Gbps for portable and fixed devices. WirelessHD version 1 was supposed to deliver at 10 Gbps. WiGig by comparison is supposed to begin life at 1.5 Gbps and in its second generation go to 6 Gbps.
As early as January, 2010 SiBeam had Panasonic and US TV maker Vizio bundling its chips and had shown them in LG Boxes.
The purchase price is $25.5 million in cash and Silicon Image stock and the deal will close in the second quarter and will be dilutive to Silicon Image for a single year and neutral on 2012 income.
‘The acquisition of SiBEAM underscores our stated mission to be the leader in advanced video connectivity solutions and SiBEAM’s 60GHz wireless technology will enable us to rapidly bring the highest quality of wirelessly transmitted HD video and audio to market,’ said Camillo Martino, chief executive officer of Silicon Image, Inc. ‘Silicon Image has a proven history of establishing successful global connectivity standards, including DVI, HDMI, and most recently MHL and we are looking forward to driving WirelessHD as a global connectivity standard and to delivering ‘standards plus’ products supporting both wireless and wired HD connectivity standards.’
So with that kind of statement it highlights the underlying 60GHz technology as well as separately talking about WirelessHD, so we think that’s how Silicon Image sees it, and thinks that it can now ride ANY 60GHz horse, and has a shot at establishing WirelessHD.
When Silcon Image established HDMI it worked with Sony, Matsushita, Philips, Technicolor, Hitachi and Toshiba, so it has some good friends and it could be that SiBeam was pushed by these global CE manufacturers into Silicon Image’s arms, knowing they can work with it.
Silicon Image already has a couple of game changing silicon projects on the go, silicon that can support 18 Megapixel cameras on phones and it has provided the core intellectual property behind the Mobile High Definition Interface Working group, which along with Nokia, Samsung, Sony and Toshiba will provide an advanced HDMI cable which connects a smart phone to a HDTV. The difference is that it will charge the phone, like a USB connector, at the same time, so not deplete the phone’s charge. It also offers a control channel, so that your TV remote can fastforward what’s on the phone. We can’t see how the two projects, WirelessHG and Mobile HDMI are connected, but they may both have a home in the same device.