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Antenna Maker Looks for Ways That ‘Less’ Can Do More

Ethertronics Inc.

CEO: Laurent Desclos.

Revenue: Would not disclose.

Net income: Would not disclose.

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No. of local employees: 38.

Headquarters: Sorrento Valley.

Year founded: 2000.

Company description: Ethertronics is a privately held technology company designing innovative antenna and RF system solutions to provide the best connected wireless experience.

Key factors for success: A deep understanding and expertise in antenna and RF system design, coupled with the foresight to understand industry trends that enable the company to deliver an innovative portfolio of solutions to businesses worldwide.

Millions of people love smartphones for their abundance of innovative features. Amazing things are also going on inside the phone where hidden antennas make the connections that make those features possible.

At Sorrento Valley-based technology company Ethertronics Inc., a team of engineers designs some 200 built-in antennas a year for leading cellphone makers like Samsung, Nokia and Motorola and laptop makers like Sony and HP.

Founded in 2000 by the then UCLA Professor Eli Yablonovitch and Ethertronics’ CEO and President Laurent Desclos, the firm has received $40 million in venture capital funding, including from early investor VC firm Sevin Rosen.

It is a self-sustained business today, said Rick Johnson, CFO at Ethertronics.

“We are in the high-end smartphone market, which has grown significantly in the last few years,” Johnson said. “Everybody is buying smartphones, but not regular phones. With the (global) market size being 400 million units a year in the smartphone category, we have seen a huge growth.”

Revenue Growth

Ethertronics’ CEO Desclos said the last 12 months have marked a significant chapter in the firm’s business, underscoring the 50 percent revenue growth between 2011 and 2012.

“The continued growth of our antenna business, coupled with the advancements we made in our active antenna systems division and the formation of our chip division, positions us for even more growth in 2013,” Desclos said in a recent company statement.

Johnson declined to give revenue figures, but said Ethertronics makes roughly 200 million antennas a year in manufacturing plants in Korea and China, which sell for between 10 cents and $2 apiece.

What makes Ethertronics’ antennas unique is a patented technology dubbed Isolated Magnetic Dipole (IMD), he said.

“With that technology we are able to get into smaller and smaller devices,” he said.

In the early analog cellular and even early digital days, cellphones used external antennas, which gave the devices better range when communicating with cell sites. As wireless network operators like AT&T, Verizon and Sprint began building out cell sites nationwide, device makers decided to hide the antenna inside the phone.

While this made phones more appealing to users and easier to carry, antenna experts are tasked to match the antennas to the frequency on which they operate and make them small enough to fit into ever smaller devices.

“In our current cellphones, we have three to five antennas to make calls and download data,” Johnson said. “We have a Bluetooth antenna for connecting Bluetooth devices, a GPS antenna for location, one to connect to Internet Wi-Fi, and a new one to do credit card transactions — so you have multiple antennas within a small space.”

Making these complex systems work together is Ethertronics’ core competency, Johnson said.

While making antennas for high-end smartphone makers is Ethertronics’ main business, its clients also include makers of laptops, and other wireless products, he said.

World Phone Market

“The new market everyone is moving to currently is the world phone,” Johnson said.

These sophisticated phones create even more challenges for antenna design engineers.

“There are 13 bandwidths to cover in a worldwide phone,” Johnson said. “It is estimated that in three years, if the phone is to be (operational) worldwide, you need to be in 42 different bandwidths, for which you would need a huge antenna.”

Ethertronics’ engineers have created an “active antenna” whose smart design allows it to change characteristics and find the right frequency. Thus far, Ethertronics is the only company worldwide with an integrated active antenna in a world phone on the market, he said.

The Japanese mobile communications operator NTT Docomo markets the Japanese version of Samsung Electronics Co.’s Galaxy S II LTE world phone in Japan. Johnson said it will likely take a few years before their antenna will be marketed in a world phone in the United States.

“We wanted to test it in a smaller market first,” he said. “As it becomes more prevalent, it will come to the United States.” He said it took six months to a year of working with the cellphone maker to integrate the new active antenna, creating a barrier to market entry.

Though cellphone makers typically have their own antenna design makers, Johnson feels that Ethertronics gains a competitive edge by focusing solely on antennas.

“We see more designs than anyone else,” he said. Ethertronics’ team creates more than 200 antenna designs a year compared with four-to-five designs created by a typical cellphone company, he said. Innovative giants like Apple and Motorola, who have their own design engineers, are Ethertronics’ biggest rivals.

Another antenna maker Sofant Technologies of Edinburgh, recently said it created a miniature antenna that maintains a strong signal and helps prolong battery life, which it hopes to license to smartphone makers. Sofant said it believes it could fetch more than $16 million with such a deal.

Ethertronics also has big plans for 2013.

“We will release products in 2013 that will benefit users, makers and carriers and will provide a better cellphone experience,” Johnson said. “We will use the same concept for an active antenna and provide faster downloads, quality of services and extended battery life.”

Marion Webb is a freelance writer for the San Diego Business Journal.

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