Bermai IP Headed to Video Phone

By Ed Sutherland

December 09, 2004

The chipset that was expected to help propel wireless video on living room screens will instead become the power behind new handheld video communications.

The chipset designed by bankrupt WLAN startup Bermai will become the core of a video phone, according to DSP Group, a California-based fabless chipset company.

Bermai, a private company based in Palo Alto, California, collapsed in September after investors pulled out of the company's plans to offer an inexpensive multimode Wi-Fi chip for the consumer electronics market. The 802.11a chip had been earmarked to power set top boxes, DVD players, televisions and media center PCs.

Wednesday, Santa Clara, Calif.-based DSP Group announced it had purchased "substantially all the assets" of Bermai. As part of the deal, former employees of Bermai were granted stock options. The former employees have the option on 239,000 DSP Group common stock at $22.67 per share. The purchase is worth $6 million, according to the Associated Press.

Former Bermai employees being picked up by DSP Group number under 30, and include the company's engineering staff. Also, Bermai co-founders Dr. Ramesh Harjani and Dr. Jaekyun Moon will become consultants to DSP Group. Former Bermai CEO Bruce Sanguinetti now leads development of ZigBee technology at NEOReach, a subsidiary of wireless broadband company MobilePro.

The purchase is "in line with the Company's strategy and focus to provide a complete short range residential wireless offering," according to a DSP statement. "DSP Group plans to further develop and offer chipsets for voice, data and video applications with high quality of service and improved ranges over Wi-Fi networks."

Bermai technology will form the heart of a planned videophone. Called 'V-Squared Over IP', DSP Group in 2006 expects to release a cordless video phone that will also wirelessly connect to the Internet, according to Yaniv Arieli, president of U.S. operations and investor relations for the company.

DSP Group, which was founded in 1987, claims its chipsets are part of 70 to 75 percent of cordless telephones. The company realizes the cut-throat quality of much of the Wi-Fi market ("The data portion is a pretty bloody market," says Arieli) and plans to concentrate on voice applications.

The DSP Group executive says the purchase of Bermai was a "strategic move" designed to give the company access to the growing trend of home wireless networks. Bermai's multimode technology is well suited to combining voice and video for the consumer market, according to Arieli.

Founded in 2001 by Drs. Harjani and Moon, Bermai received $33 million in its first two rounds of funding by investors that included Advanced Technology Ventures, Blueprint Ventures and Mobius Venture Capital.

The September closure of Bermai caught the 55-member staff by surprise. Not only was the company poised to announce its first chipset, the company had already demonstrated the chipset at world tradeshows and signed Gemtek Technologies as an original design manufacturer.

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