With EPOS Purchase, Qualcomm Reveals Growing Presence in Israel
Brian Sagi of San Diego’s Cerian Technology Ventures has pulled together a few disparate threads of mobile technology news that offer some interesting insights about recent initiatives by Qualcomm (NASDAQ: QCOM), the wireless technology giant.
Cerian provides a variety of services in technology-based transactions. Sagi says his firm was hired to serve as a strategic M&A advisor for EPOS Development, an Israeli startup with technology that Qualcomm acquired a few weeks ago. Cerian’s work is usually confidential, but Sagi says EPOS allowed him to talk about his firm’s involvement in the Qualcomm deal. He describes the EPOS digital ultrasound technology as “super interesting, with the potential to make a big impact in mobile applications.”
Sagi, who got two engineering degrees at Israel’s Technion before moving to San Diego, points out that EPOS is Qualcomm’s third M&A deal in Israel over the past two years—and he says the wireless giant is scouting for more acquisitions there.
Qualcomm acquired Ra’anana-based DesignArt Networks for $140 million about four months ago. DesignArt, which was consolidated with Qualcomm’s Atheros business, specializes in small cell modem and system-on-a-chip designs for heterogeneous networks and high-speed wireless backhaul infrastructure. It’s an area that has been emerging recently as a key technology focus at Qualcomm.
In 2010, Qualcomm paid an estimated $60 million to $80 million to buy San Francisco-based iSkoot, which was founded in Beit Shemesh in 2005 to develop voice-over-Internet software and related technologies for mobile phones. From its partnership with Skype, iSkoot has expanded its platform to extend the reach of other Internet-based services into mobile handsets.
A few of the EPOS team members are planning to move from Hod Hasharon, where the company is based, to San Diego. But Sagi said most of the startup’s 30 employees would continue to work in Israel. Qualcomm operates an advanced wireless communications R&D center in Haifa that founder Irwin Jacobs established almost 20 years ago. Qualcomm now has about 270 employees in Israel—which represents a 50 percent increase since 2010, according to Israel’s Haaretz newspaper.
Sagi says he enthusiastically agrees with a provocative report issued recently by Startup Genome that recently ranked Tel Aviv as the world’s second-biggest startup hub, after Silicon Valley.
“After Silicon Valley, Israel is basically No. 1 in mobile communications, applications, and medical devices,” Sagi says. “There’s a famous book that came out about a year ago called Startup Nation that explains how the culture of Israel and the technology infrastructure there are doing such a great job.”
Qualcomm plans to integrate the EPOS technology with Qualcomm Technologies Inc. (QTI), the subsidiary now operating the company’s semiconductor business, as well as engineering, R&D, and substantially all of the company’s products and services businesses.
Where touchscreen technology approximates hand gestures, Sagi says the EPOS technology is far more precise. A transmitter embedded in a pen, stylus, or pointing device sends constant ultrasonic acoustic waves to a software-based receiver, which uses the sound waves to measure the distance and position of the pointing device. The technology can be used to pinpoint both 2-dimensional and 3-dimensional signals, using off-the-shelf microphones and minimal hardware.
“The technology allows you to add a stylus or pen to a touchscreen pad at very low cost,” Sagi says. In addition to precisely tracking movements onscreen, Sagi says, it can also track what a user is writing off screen on a piece of paper.
Qualcomm plans to integrate the EPOS technology into its Snapdragon processor to strengthen and differentiate the chipset, which serves as the core technology in a large variety of Android and Windows Phone smartphones and tablets. In the statement announcing the deal, QTI senior vice president for product management, Raj Talluri, says, “EPOS’ technology goes beyond the PC-era mouse and keyboard and enables touch-free gesture and pen interactions as user input mechanisms. Enabling this technology on Qualcomm’s Snapdragon processor will allow devices that accommodate a more mobile and multimedia-centric lifestyle.”
It’s also worth noting that in mid-2011, Qualcomm acquired certain assets from GestureTek, a Sunnyvale company. As I reported at the time, GestureTek specializes in machine vision technology that enables people to use hand and body motions to dynamically control computer-based information displayed on a screen or camera-enabled device. Qualcomm also planned to integrate that technology in its Snapdragon processor.
With the EPOS acquisition, Qualcomm said it plans to provide digital pen/stylus reference designs to help accelerate adoption of this technology in consumer, enterprise, and education markets. Wave your hand if you think this is a sign of innovations to come.