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Kaufman Bros. 11 th Annual Investor Conference September 3, 2008 NASDAQ CM: FCSE. Safe Harbor Statement.
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Kaufman Bros. 11th Annual Investor Conference September 3, 2008NASDAQ CM: FCSE 1
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. We refer you to the Risk Factors section in the Company’s Form 10-K for the year ended December 31, 2007 and Form 10-Q for the quarter ended June 30, 2008. These statements are based on information as of September 3, 2008 and the company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Systems Group Digital Media Solutions Hi-def. video and tapeless acquisition driving market FireStore technology #1 New growth markets and Media Asset Management Partnerships with Canon, JVC, Panasonic, and Sony 80% of corporate revenue Semiconductor Group Convergence Chips: TV-out Portable media players and navigational devices RMI, FreeScale, Marvell Reference Designs UWB Wireless Technology Superior technology 1st chip: video distribution 2nd chip: WUSB mass market Expected $1B industry Digital Wireless Audio (DWA) $136M TAM 2011 6 patents pending to dominate Rapid time-to-revenue Focus Enhancements A leading developer ofdigital audio/video technology 3
Ultra Wideband (UWB)“The Plan” • Discontinuity and an inevitable growth market for high speed (54 – 480 Mbs) WPAN multimedia connectivity. • Goal: One radio multi-protocol support (USB, UPNP, 1394, BT next gen.) • Targeting bluetooth costs with all CMOS design • Growth opportunity: • $1B plus market 2012 • Wireless USB believed to drive initial market acceptance. NOTE: USB already exceeds 80% attached rates. (PDA, printers, PCs) Mass Storage Digital Camera, Camcorder, Handset PC & Media Centers Printer MFP USB hubs Future Apps: HID – mouse, keyboard, gamepad Display – TV, monitor Settop Box 4
Significant Market OpportunityPreviously Projected UWB Revenue $ in millions $ ASP Delayed ~1 year 5 Source: In-Stat, Nov. 2007
Portfolio Strategy Wireless Connected Consumer (AV Distribution) Smartphone Docking STB New Existing UWB Wireless Video/Data Wireless Audio New Wired Video Out (Biz, Con.) Wireless Audio Technology Investment UWB Convergence PMP/GPS Convergence Existing Market Focus 6
Today’s Digital Home PC Game Console DVD STB PVR PMP Home Entertainment Speakers 7
Phase III:Wireless Digital Home Usage Case AudioMojo PC Game Console UWBWireless Media DVD UWB STB Wireless Media PVR UWBWireless Media PMP Home Entertainment AudioMojo 8
Digital Wireless Audio Industry Revenue $ in millions Source: RHA Associates 9
SpeakerFinderTM: Setup • RF • C • LF • RS • LS • Sub • RB • LB • Focus • Competition • RF • RS • C • LF • RB • RS • RF • LS • Sub • RB • LF • LB
SpeakerFinderTM: Optimization • Focus • Competition
MyZoneTM: Sweet Spot • Focus • Competition
MyZoneTM: Sweet Spot • Focus • Competition
Wireless A/V Applications AVR & Home Theater DSP Host DVD/ Blu-Ray / HDDVD DTV Integration AV Docks and PVRs Game Console 14
The AudioMojo™ Gap Closure • AudioMojo™ enables the first scalable, 16-channel, highest-quality, wireless audio systems • Transmit (master) modules integrate into DTV or AVR • Receive (slave) modules integrate into powered, “active” speakers • Dolby 5.1 surround sound sale would be 7 chips per complete system • ASP per chip ~$5 DTV Master Slave AudioMojo 15
Execution Plan • Short Term Execution Objectives: • DWA chip: • Tape-out: September ‘08 • Receive back 100 chips: November ‘08 • Bring up and demonstrate technology: November ‘08 • Sample with customers: Nov./Dec. ‘08 • Customer design commitment @ CES: January ‘09 • UWB Wireless Video: • Demonstrated @ Computex: June ’08 • Product reference Design Demo: January ‘09 16
Silicon/IP provider Focus’ Competitive Summary $$$ • ONLY solution to provide: • 2ms latency • Lip Sync requirement < 10ms • Scalable • Up to 16 channels • Quality • 24 bit @ 48Ksps 96Ksps • < 1usec intra-channel jitter • Simplicity • SpeakerFinder™ • myZone™ (Ear Finder) • 7 levels of redundancy and robustness • Active Speaker Technology • Digital Crossover Circuitry • Linear Phase Delay • Notch Filters Cost / channel $ Stereo 5.1 7.1 or higher Channel Depth No competitor can do < 10ms latency (required for lip sync) with up to 16 channels at 24 bit @ 48KHz 17
Leveraging Technology & Expertise with Partners and Customers 18
Semiconductor Summary Drive UWB towards CE and Mobile applications which takes advantage of our customer base, current expertise in mobile appliances, and capabilities of our current TT1013 UWB chip Strengthen wireless technology portfolio with audio technology Targeting to generate revenue from all activities in Q3’09: TV out chips UWB video streaming Digital wireless audio chip Long-term, merge the video and audio technologies onto a single UWB platform 19
Systems Group: HD Digital Media Solutions Media Asset Management Acquisition / Video Production Video Distribution • Tapeless acquisition with file formatting • Saves 320 hours/year capture time per camera • Partnered with JVC, Panasonic, Canon • Integrated Media Asset Management and Archive System • Provides a scalable and convenient workflow alternative • Technology Alliance with Sony • HD networked media appliances and processors • Narrowcast, Digital Signage • Best Buy, Wal*Mart, Bank of America, Fleet Bank ENTERPRISE MEDIA 20
Proprietary technology adopted by major camera companies Portable Direct To Edit™ Recorders FS-5 $2,195 FS-4 HD $799 FS-100 $1,995 DR-HD100 $1,995 FS-C $1,995 FS 4 Based Models Moving to FS 5 21
Systems Growth Drivers • FireStore has been the growth driver for Systems: • Competitive conditions between the professional camcorder manufacturers shortened the product life cycle on existing FS4 product line, but FS5 with enhanced metadata functionality began shipping in June. • Actions: • Reduced expenses • Leverage our 4 partners: Canon, JVC, Panasonic, and Sony • Convert FireStore users to Enterprise Media to benefit from converging A/V & IT technologies • Enterprise Media products have the potential to be larger than FireStore with our partners… if only 5% of FireStore installed base converted to ProxSys = $60M 22
Focus is well positioned to take advantage of media going wireless and mobile Wireless audio, video, and data technologies Strong customer base Expect to be generating semiconductor revenue in Q3’09 from three product families: TV-out chips UWB video Digital wireless audio Expect Systems group’s revenue to grow with partners coming on line with FS5 and ProxSys technology alliances Investment Highlights 23
THANK YOU NASDAQ CM: FCSE 24