Irish are big winners in Las Vegas

Irish companies at the Consumer Electronics Show were announcing deals with major players

BEHIND ALL the hype of the annual Consumer Electronics Show (CES) in Las Vegas last week, the event marked a watershed for the Irish firms attending.

While there has always been an Irish contingent at the world’s largest annual event for the technology industry, this year Irish companies were announcing deals with major players like Samsung, Bang Olufsen and Vizio, and winning best-of-show awards for their technological innovation.

The performance is more remarkable because Ireland Inc doesn’t have much of a pedigree in providing technology for devices and services that end up in the hands of consumers. The high-flying technology companies of recent years – Iona, Baltimore and Fineos – became successful selling to large businesses, the public sector (internationally rather than at home) and to telecoms companies.

But one of the most notable trends of the last decade has been that technology innovation is now driven by consumers, and in particular the social media tools they are quick to embrace, rather than by big business.

A slice of the annual $681 billion worldwide spend on electronics is an attractive prize for companies that can crack it. That might suggest it has become harder for small Irish firms to break into an increasingly crowded marketplace. “It’s very hard to get the big manufacturers to integrate technology from a small Irish company with 30 staff and a pretty poor balance sheet,” admits one seasoned Irish executive who, for obvious reasons, prefers to talk off the record. Making sure your first customer is a big name which you can then leverage as comfort for other potential customers is a tried and tested strategy.

Jonny McClintock, president of worldwide sales with APTX, a Belfast company which has developed software to make Bluetooth usable for high-fidelity audio, admits to having squeezed as much mileage as possible out of the firm’s deal with headphone manufacturer Sennheiser.

But McClintock was smiling at APTX’s stand at CES last week as he showed off new products from Creative, JayBird and Chordette which use APTX’s compression and decompression algorithm, known as a codec.

APTX is also part of a project with premium audio brand Bang Olufsen to bring wireless capabilities to existing speakers, while Microsoft has decided to use APTX as part of its Xbox Live quiz game channel PrimeTime.

Not bad for a 15-person company which sold off its 20-year-old professional broadcast audio business last year to concentrate on the opportunity in the consumer space.

“We are an audio codec development house which there are pretty few of in the world,” says McClintock. “The ideal business model for us is being in a place were the royalties flow as our software is used in other people’s products.”

Another strategy is to align yourself closely with the dominant force in a particular space but spot a niche that they are not exploiting. That’s the strategy that Amulet Devices has taken and it is partnering Microsoft closely to take advantage of the voice-recognition capabilities in Windows Media Centre.

“Microsoft has a great voice engine and a great media server but there is no integration between the two, so Amulet jumped in,” explains Pat Lawless, president of Amulet’s US operations.

Importantly for the execution of the strategy, Lawless is a former sales manager with Microsoft in the US, giving him an insight into how such a massive organisation works.

At CES, Amulet was showing off the second generation of its voice-controlled remote control which works with Windows Vista and Windows 7 media centres.

The remote, which has a new casing, improved voice recognition and enhanced infra-red functionality, enables users to use simple voice commands to access items in their digital library such as music, television programmes, movies, videos and photos.

Lawless explains that, behind the scenes, Amulet has also been working on providing a set of application programming interfaces (APIs) so that third parties can integrate its remote with other home automation kit.

“We want to be the company that best understands Microsoft’s voice engine and can integrate that with a range of consumer electronics,” says Lawless.

But for startups with limited resources, choosing who to partner with can be key. Samsung announced at CES that Muzu.tv’s music video service would be available on its internet-connected televisions. Muzu.tv chief executive Ciaran Bollard describes it as a “strategic deal” and says it came about as a result of heavy investment in marketing and PR in Britain.

“Samsung wanted an exclusive deal but we have to evaluate each platform independently,” explains Bollard. “They may want to do something on mobile, for example, but we may be talking to other people in that space. With Samsung we took a punt but it took up a lot of our development resources for the quarter.”

There is also profitable business to be done with firms who may not be household names, RedMere, a designer of chips that enable slim and flexible high definition cables, announced deals with PNY Technologies, a significant maker of Flash memory, and Vizio, the top selling brand of LCD TVs in the US.

Simone Boswell, the Enterprise Ireland executive in Silicon Valley responsible for the digital media sector, says Irish companies are coming out to the US much earlier in their development than previously.

One Irish entrepreneur who has taken this approach is Fergus Hurley, founder and chief executive of Clixtr, a Silicon Valley-based firm that provides a platform for location-based photo-sharing. Hailing from Galway, Hurley moved to Silicon Valley in June 2008 to attend a course in entrepreneurship at Stanford University, having completed a masters in electrical engineering and computer science.

Hurley describes Clixtr as a location-based mobile photo-sharing platform. Using the GPS functionality of iPhones, the idea is that everyone at an event can share pictures even if they don’t know each other. Founded in late 2008, it has been accepted into Silicon Valley’s incubator Plug and Play and has attracted $200,000 in seed funding from early-stage Valley investor Draper Fisher Jurvetson (DFJ).

At CES it won the high-profile Mobile Apps showdown, just the latest plaudit in Clixtr’s short life. For Hurley, it all helps to build relationships with electronics manufacturers he hopes will integrate Clixtr into their products.

While he has made Silicon Valley home, he’s not convinced it’s essential for Irish technology entrepreneurs. “It’s easier here because the infrastructure is here but it’s getting to the point where it’s not crucial to move here. The tools are available to build a team remotely and build products with contributions from around the world.”

The progress of Irish firms and entrepreneurs at CES in recent years has been impressive. With the industry pulling itself out of recession in 2010, the telling thing will be to see where they are by the time the electronics world descends on Las Vegas next January.