Bermai Buffs Up
Why would anybody invest in yet another 802.11 chip play? Good question. With dozens of players already, there isn't much room for differentiation in these devices. Moreover, big players are already staking their turf, with Broadcom Corp. (Nasdaq: BRCM) coming on strong this year and Intel Corp. (Nasdaq: INTC) expected to make a splash in 2004 (see Broadcom Ascending in WLAN?).
Regardless, Bermai Inc. is diving into the fray with 802.11 chips due for release next quarter. And today, the company picked up another $12 million to stay in the race.
Previous investors Advanced Technology Ventures (ATV), Blueprint Ventures, and Mobius Venture Capital returned for the B-round, joined by new investors STIC Ventures (a division of LG Electronics Inc.) and Walden International Investment Group.
Bermai CEO Bruce Sanguinetti is sanguine about his company's chances. "We feel there's plenty of market to go around," he says. He points out that few of the announced 802.11g chips have really begun shipping, and he claims that no one will offer as many a/b/g/e combinations as Bermai.
[Note: 802.11a (54-Mbit/s over the 5Ghz band), b (11-Mbit/s over 2.4GHz), and g (54-Mbit/s over 2.4GHz) are the principal flavors of wireless LAN, while 802.11e is an upcoming quality-of-service standard. All are defined by the Institute of Electrical and Electronics Engineers Inc. (IEEE).]
Bermai has three 802.11 permutations due to hit the market simultaneously: standalone a, standalone g, and dual-band a/g. Bermai's 802.11e accelerator can be added to any of them, although it's most likely to be used with the a chipset. The company is weeks away from getting the chips back from the fab and should be able to ship during the third quarter, Sanguinetti says.
Price is going to be Bermai's primarly selling point. Sanguinetti claims the company's chip sets take up fewer components -- and therefore less money -- than competing wares. Bermai claims its g chipset will require only half the component count of competing products, and its a products will use only 20 percent of the components. "So right there, you're saving bucks on this thing."
That's been made possible through the design of the chips. Sanguinetti claims, for example, that Bermai has developed a smaller radio element than others and a baseband that doesn't require a microprocessor or memory.
Standalone a is also a major cog in the strategy. Some industry watchers have declared standalone a to be dead, but Bermai still sees potential in enterprise access points and particularly in gadgets such as high-definition TV. "You've got to have a-only for the consumer electronics market," Sanguinetti says.
Still, others are gunning for consumer electronics, including Atheros Communications -- which is already working with powerhouse Sony Corp. (NYSE: SNE) -- and Intersil Corp. (Nasdaq: ISIL), says Bob Wheeler, analyst with The Linley Group. “It’s going to be tough, given that there are going to be a lot of 11a products out there in the second half of this year,” he says.
Consumer electronics is probably Bermai's primary target, Wheeler says. "I would suspect they have a large consumer electronics company onboard [as a customer], possibly Japanese, most likely Korean." Sanguinetti can't point to any firm commitments yet but notes that the chips are being evaluated by major OEMs. Bermai's first round of funding, for $21 million, came in March 2002. "We sized our 'A' [round] just about perfectly. We got orders just before we ran out of 'A' money," Sanguinetti says.
The new money should take Bermai through its first nine months of generating revenues, "which is typical -- 'A' to develop, 'B' to launch, 'C' to go to profitability," he says.
— Craig Matsumoto, Senior Editor, Light Reading