3Com licenses Parthus mobile platforms

3Com licenses Parthus mobile platforms
By Peter Clarke, EE Times
January 25, 2001 (7:29 a.m. EST)
URL: http://www.eetimes.com/story/OEG20010124S0013

LONDON — Parthus Technologies plc (Dublin, Ireland), an emerging intellectual property and design services company, has licensed three of its intellectual property (IP) platforms to 3Com Corp., the company announced Wednesday (Jan. 24). Parthus also announced that its sales revenue in 2000 jumped 68 percent from 1999 to reach $31.9 million, against a loss of $9.4 million.

Parthus underwent a transition in 2000 when it shifted to IP licensing, moving away from its 1999 focus on design services or IP creation. Much of Parthus' IP creation in 1999 involved work for STMicroelectronics.

While announcing its results, Parthus said it had signed 32 new license agreements in 2000, and that its average initial license fee climbed during the year and exceeded $1 million by the third quarter, at which point the company started to receive its first royalty payments. Parthus said it has also formed strategic relationships with a number of companies, inc luding ARM Holdings, Sony Corp., Symbian Ltd. and 3Com Corp.

Under its agreement with 3Com, which has become an equity stake holder in Parthus, the latter company will provide its BlueStream, NavStream and MediaStream intellectual property platforms to 3Com. Parthus describes its platforms as market-ready wireless solutions.

BlueStream is Parthus' approach to providing Bluetooth wireless communications. NavStream is a global positioning by satellite (GPS) system, targeted at mobile phone and automotive markets. MediaStream is an audio platform with a 24-bit DSP, analog components and audio software aimed at creating MP3 players.

"Wireless allows 3Com to provide radically simple connections for our customers," said Rick Maule, general manager of the mobile connectivity division of 3Com. "Our next generation of wireless and mobile products are a natural extension and will complement our current role in LAN technologies. This alliance with Parthus, a leader in the mobile Internet, provides us with additional wireless and multimedia technology, which enhances our existing mobile IP portfolio."

Kevin Fielding, chief operating officer of Parthus, said that his company's loss in 2000 will probably be followed by a loss in 2001. "Right now we do not factor royalties into our plans," he said. "They are notoriously difficult to predict and can take 18 months to arrive."

Fielding said he believes that the average initial licenses for Parthus platforms will continue to escalate. "It went up by 4x in 2000 because when we get involved with a lead key customer we do heavily discount, but when others follow them we want to get full market value," he said.

Peter McManamon, chief financial officer of Parthus, said, "The planned strategic shift in the business to licensing intellectual property is creating a higher gross margin business mix. Repeat business is strong at 64 percent and our largest customer, STMicroelectronics, although higher in absolute terms, has reduced to 39 percent of our revenues fro m 68 percent in 1999."