The failure of US analog mobile TV chip company Telegent to go public after all, was passed off last week with the company suggesting that it doesn’t need the money. It had, after all, just shipped its 80 millionth chip.
In fact its exact words were ‘We are able to pursue our growth and diversification goals with the working capital generated from our operations as a private company.’
But one of our eagle eyed readers suggests that the withdrawal from the IPO has other reasons ‘ the fact that at least three Chinese companies have begun volume shipments of analog mobile TV chips, both in China and other surrounding regions ‘ compromising device pricing for Telegent as well as reducing its market share. The result may have been a dramatic fall in quarterly revenues, which would have been impossible to miss, had it gone public, in its first quarter figures.
Chinese rivals such as RDA, Fuzhou Rockchip and Montage have begun shipping mobile TV chips in volume, but the key offering is likely to be the analog 5888 chip from RDA, offering low power analog TV on a chip with NTSC, PAL or SECAM, alongside global FM radio reception. This devices works throughout the VHF and UHF spectrum from 50 MHz to 870 MHz, with power consumption understood to be in line with Telegent chips.
Most of the others, like market leader Siano Mobile Silicon, are targeting digital chips for terrestrial TV or the CMMB standard designed for handsets. Although this should not put them directly up against Telegent right now, when the digital terrestrial standard DMB T/H, also known as GB 20600-2006 takes off, and people try to transfer it to handsets, it will immediately impact Telegent. The standard is slowly being implemented across China and is already in some major cities and in Hong Kong.
Rockchip is only shipping digital TV on its RK2728 chip but this now supports the Chinese mobile TV standard CMMB as well as DVB-T and the Korean digital mobile TV T-DMB. Montage already offers GB 20600-2006 on one chip, the M88DD2000, and DVB-T on another.
DVB-T was the standard that Telegent identified as its first digital target, and it is planning a hybrid analog TV/DVB-T chip. All these Chinese chips which can offer this technology in low power have the potential to disrupt this. It’s hard to be sure of the state of play in China but our contacts there reckon that RDA is one of a handful now producing analog chips in volume, and the fact that around 90% of Telegent shipments are in China, and the emerging digital terrestrial technology, both point to a slackening off in revenues and margin.