SAN JOSE, Calif. Greg Winner has been named chief executive of embedded Wi-Fi chip startup GainSpan Corp., fresh from closing a deal in January to sell its competitor ZeroG to Microchip Technology Inc.
The news doesn't mean GainSpan is being put up for sale. Rather, Winner cautions, investors should expect stepwise progress building the startup's business.
ZeroG announced in February 2009 an 802.11b module delivering 2 Mbits/s for $16 aimed at a wide range of embedded applications including digital thermostats. The company raised about $30 million before it was sold to Microchip.
"I found the buyer, negotiated the sale and closed it," said Winner who was president of ZeroG. "I didn't want to, but we had a relatively small investor syndicate, and the investment climate for semis isn't the greatest," Winner said.
GainSpan raised about as much venture capital as ZeroG, but has a larger group of investors, including Intel Corp. which spun out the company. "There's more of a commitment to semis with this group, they understand this space and have maybe more patience as a group," said Winner.
GainSpan and its competitors such as G2 Microsystems and Ozmo Devices Inc. still have a long road ahead bagging the big opportunity to bring the wireless Internet to embedded systems. Ozmo hired a new CEO last week.
"This year you'll start to see some partnerships and design deals, but you are easily looking at 12 to 18 months to complete projects, so realistically the embedded space revenues will start in 2011 or 2012," Winner said.
In the meantime, GainSpan will focus on expanding its software stack to include automated configuration capabilities and other ease of use features to accelerate time-to-market. It differentiates itself in part by use of a secondary processor on its module.
Winner may seek additional investments from existing investors, but has no plans to reach outside the group for funds. He also has no plans to seek an acquisition, but shared his analysis of how top-tier Wi-Fi chip suppliers see the embedded space.
"Broadcom and Atheros have done well in traditional Wi-Fi, so Marvell will be more aggressive" to get into the embedded market, Winner said. "Broadcom doesn't do modules and focuses on extremely large customers, putting a lot of application engineers on every design in," he added.
That's the opposite of the business model in embedded systems where chip makers have many small customers, Winner noted. "So I see Marvell getting in early, Atheros coming in the middle and Broadcom taking a longer time," he said.
Analysts such as Craig Mathias of Farpoint Group are bullish on embedded Wi-Fi. "Wi-Fi is settling in as being one of the few radios that really matter from very low power, expanding all the way out to the LAN and metro scale--and it's based one of the few global standards where we have we frequency bands available almost everywhere," Mathias said.