Next-Generation User Interface Technologies for Mobile and Consumer Devices
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Next-Generation User Interface Technologies for Mobile and Consumer Devices March 2016 Topics Include: • Gesture Recognition • Sensor Fusion and Middleware • Eye Tracking • Brain, Heart and Other Biometric Sensors • Touch Screens, Haptics and Display Technologies • Image and Vision Processing • Speech Recognition / Language Processing / Mics • Virtual and Augmented Reality • Security Biometrics Next-Generation User Interface Technologies nd for Mobile and Consumer Devices (2 Edition) Report Overview Increasingly, the most differentiating features of consumer electronics devices are the user interfaces. Touch-screen displays have had a substantial impact on the smartphone market, and gesture recognition has played a major role in the gaming industry. Emerging user interface technologies have the potential to significantly affect market share in smartphones, tablets, computers, televisions and a variety of other electronic devices. As a result, there has been significant user interface technology M&A activity, including acquisitions by many of the largest technology companies (e.g., Apple, Google, Intel, Microsoft, Qualcomm, Facebook, Amazon, etc.). Given the growing importance of these technologies, there may be a robust M&A market in this sector over the next several years. This report provides a brief overview of a variety of mobile device user interface technologies. In addition to discussing the technologies themselves, the report also summarizes some M&A transactions in this sector and provides highlights of a variety of relevant private technology companies. Page 2 Table of Contents About the Author …………………………………………..….………………...… 4 About Pagemill Partners and Duff & Phelps ………………………....……… 5 Select Pagemill Partners’ Transactions ………………………....…………..… 6 Preface to the 2nd Edition ………………………………………....…………..… 8 Select Pagemill / Duff & Phelps Contacts …………………….……………… 10 Chapter 1 – Introduction …………………………………………....…………..… 11 Chapter 2 – Gesture Recognition ……………………………………………….. 13 Chapter 3 – Eye Tracking ………………………….…………………………..… 20 Chapter 4 – Touch Screens, Haptics and Display Technologies ………..… 24 Chapter 5 – Speech Recognition / Language Processing / Mics .……….. 38 Chapter 6 – Security Biometrics …………………………………………...….… 48 Chapter 7 – Sensor Fusion and Middleware ………………………………….. 58 Chapter 8 – Brain, Heart and Other Biometric Sensors …….………..…..… 61 Chapter 9 – Image and Vision Processing …………………………...……..… 68 Chapter 10 – Virtual and Augmented Reality ………………...…………....… 80 Chapter 11 – Some Final Thoughts ……………………………………………….. 96 Appendix – M&A Transaction Summary ……………………………………….. 97 Page 3 About the Author, Pagemill Partners, and Duff & Phelps About the Author “Good bankers, like good tea, can only be appreciated when they are in hot water.” – Jaffar Hussein (Governor, Malaysian Central Bank) Mark Grossman, Managing Director Mark Grossman is a managing director at Pagemill Partners. At Pagemill, he has successfully completed more than 40 transactions (primarily M&A) around the world across a variety of technology sectors. Previously, Mark worked as an investment banker at SVB Alliant, where he was involved in a variety of technology M&A transactions. Prior to becoming an investment banker, Mark was a managing director and senior technology research analyst at several Wall Street firms. As an analyst, he wrote research on technology industry trends and covered dozens of public technology companies, and he received a number of accolades including the Wall Street Journal "Best on the Street" award. Mark began his financial career as an Associate at Goldman Sachs. Prior to graduate school, Mark was a Project Engineer at General Electric, where he managed the development of a variety of complex electronics systems. Mark has a bachelor's degree in electrical engineering, with a computer science minor, from Polytechnic University (now part of New York University), and both a master’s degree (Electrical Engineering) and an MBA from the Massachusetts Institute of Technology, where he completed a two-year dual- degree program. Page 4 About Pagemill Partners, a Division of Duff & Phelps Securities, LLC Pagemill Partners is a premier investment bank focused on successful transactions for middle-market technology companies. Pagemill Partners specializes in merger and acquisition advisory services and has successfully completed more than 225 transactions since the beginning of 2005. These include transactions with IBM, Microsoft, Intel, Oracle, Computer Associates, Qualcomm, Salesforce, SAP, and many other industry leaders. Pagemill Partners works in close partnership with its clients to help achieve extraordinary outcomes, and is able to repeatedly do so through the team's combination of transaction experience, domain expertise, and personal commitment to the success and objectives of its clients and their shareholders. Pagemill's team has collectively completed hundreds of transactions across a wide range of industries, geographies, and strategic circumstances. Pagemill is a Division of Duff & Phelps Securities, LLC. About Duff & Phelps Duff & Phelps is the premier global valuation and corporate finance advisor, with expertise in complex valuation, dispute consulting, M&A and restructuring. The firm’s more than 2,000 employees serve a diverse range of clients from more than 70 offices in North America, Europe and Asia. To learn more, visit www.duffandphelps.com. M&A advisory, capital raising and restructuring services in the United States are provided by Duff & Phelps Securities, LLC, Member FINRA/SIPC. Pagemill Partners is a Division of Duff & Phelps Securities, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd., which is authorized and regulated by the Financial Conduct Authority. Page 5 Select Pagemill Partners’ Transactions has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has acquired has been has been acquired by acquired by acquired by Page 6 Select Pagemill Partners’ Transactions (cont.) has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been has been acquired by acquired by acquired by acquired by has been has been has been acquired by has acquired acquired by acquired by Page 7 nd Preface to the 2 Edition Update to the First Edition of the Report Introduction In the first edition of this report (issued in April 2014) we noted that, given the growing importance of human interface technologies for mobile devices, there would likely be a number of acquisitions in the sector. This has proven to be the case. In addition to a few high-profile M&A transactions (e.g., Facebook acquiring Oculus), a variety of companies in the sector, including several we highlighted in the first edition, were acquired. Some examples include the following (the appendix contains a more detailed list): FlyBy Media (vision processing software) – Acquired by Apple Faceshift (facial analysis software) – Acquired by Apple SoftKinetic (3-D image sensor/gesture recognition) – Acquired by Sony Vocal IQ (natural language technology) – Acquired by Apple Saffron (cognitive computing) – Acquired by Intel Qualcomm’s Vuforia Unit (augmented reality) – Acquired by PTC CogniVue (vision processing) – Acquired by Freescale/NXP Looksery (augmented reality “lenses”) – Acquired by Snapchat Pebbles Interface (hand/gesture recognition) – Acquired by Facebook Cypress’ Touch Unit (touch controllers) – Acquired by Parade Metaio (augmented reality) – Acquired by Apple N-Trig (stylus for tablets) – Acquired by Microsoft Kolor (virtual reality software) – Acquired by GoPro Lemoptix (MEMS pico-projection) – Acquired by Intel Nimble VR (hand tracking) – Acquired by Facebook 13th Lab (augmented reality tracking) – Acquired by Facebook Analog Devices’ MEMS Mic Unit (MEMS microphones) – Acquired by InvenSense. Vision Factory (image and object recognition) – Acquired by Google Movea (sensor fusion software) – Acquired by InvenSense Sensor Platforms (sensor fusion software) – Acquired by Audience (which was later acquired by Knowles) Page 8 In addition to M&A activity, several relevant companies have completed significant capital raises since the first edition. A few examples include: Magic Leap (augmented reality) – Raised $542 million in late 2014 and just recently announced a new $793.5 million funding Movidius (vision processing) – Completed a $40 million private capital raise Tobii (eye tracking) – Had an IPO on the Nasdaq Stockholm exchange There has also been a substantial amount of new product activity. For example, Microsoft announced HoloLens; Samsung introduced Gear VR; and Sony and HTC have demonstrated virtual reality solutions. Given all of the recent activity, we thought the timing was right for a second edition. Beyond updating M&A transaction activity, the second edition also discusses recent sector and technology developments. Page 9 Contact Us Author Canada M&A Contacts Mark Grossman Scott Munro Managing Director Managing Director Silicon Valley / Boston