Zoran Corporation

Source: Wikipedia, the free encyclopedia.
Zoran Corporation
BrandsVaddis (DVD player chip), COACH (digital camera chip), SupraHD (HDTV chip)
RevenueDecreaseUS$357 million (2010)[1]
Decrease-$40.6 million (GAAP, 2010)[1]
  • Decrease-$47.6 million (GAAP, 2010)[1]
  • Decrease-$21.5 million (Non-GAAP, 2010)[1]
Total assetsDecrease$507 million (2010)[1]
Total equityDecrease$401 million (2010)[1]
Number of employees
1,411 (September 2009)
Websitequalcomm.com
Footnotes / references
[2]

Zoran Corporation was a

incorporated in the state of Delaware and had offices in Canada, China, England, Germany, India, Israel, Japan, Korea, Taiwan, and the US. Zoran had strong ties with Israel, with a strong R&D presence and being the beneficiary of incentives from organizations such as Israel's Ministry of Industry and Trade.[3]

After an early focus on

HDTV
broadcast in the US.

In 2011, Zoran merged with

CSR[4] and is now represented by the CSR brand and stock. After the merger, CSR executed substantial layoffs
of former Zoran employees.

History

Supplier of signal processing ICs

Zoran was founded in 1981 by Yuval Almog and Dr. Levy Gerzberg, with a focus on DSP technology.

Due to the similarity between the Zoran Corporation's name and services and those of

film A View to a Kill, which was released in 1985, a disclaimer had to be added to the film stating that the name Zorin was not related to a real-life company[5] - none of the film's producers had been aware of the Zoran Corporation's existence when selecting a name for the villainous Max Zorin (Christopher Walken) and his fictional organisation.[citation needed
]

Until 1991, Zoran derived the substantial majority of its revenues from digital filter processors and vector signal processors used principally in military, industrial and medical applications. In 1989, it repositioned its business to develop and market data compression products for emerging multimedia applications and discontinued development of digital filter processor and vector signal processor products.[6]

Supplier of multimedia chips, success in DVD player market

Zoran became better known through PC video products incorporating Motion JPEG technology, which until 2001 were a significant contributor to Zoran's revenues. The ZR3606x and ZR3650x (with USB interface) family of devices was widely used in PC-based video capture and editing devices. Zoran also offered digital audio products such as the ZR38601, a single-chip digital audio processor designed to support the PC and home theater digital speaker market. Zoran also offered to third parties chip design IP (intellectual property) cores for decoding and encoding NTSC, PAL or SECAM television signals.[7]

In 1997 Zoran acquired CompCore Multimedia, a provider of software-based compression products and a designer of IP cores for video and audio decoder integrated circuits.[8]

Beginning in 1997, Zoran established itself as a leading provider of MPEG-2 technology for DVD and Super Video CD applications.[6] Although, unlike some competitors, the company had not participated in the first major revenue opportunity for high-volume MPEG-decoding chips, the Chinese Video CD player boom of the late 1990s based on MPEG-1 decoding technology, increasing sales of chips for DVD player applications launched Zoran into a period of strong revenue growth and expansion. For several years starting from 2001, Zoran derived a substantial majority of its product revenues from the sale of DVD player chips.[9]

Prominence and product diversification through acquisitions and turning point of DVD business

In October 2000, Zoran acquired Nogatech, Inc., a manufacturer of integrated circuits that establish connections between video devices and computers as well as connections between video devices across a variety of networks, in exchange for Zoran common stock with a fair value of $154 million.[10]

In 2003, Zoran purchased Oak Technology in a deal valued at $358 million,[11] thereby expanding its product portfolio with chips used in digital televisions (originally from TeraLogic which Oak had earlier acquired),[12] as well as chips and software used in inkjet printers, laser printers, multi-function printers, and industrial imaging equipment. Zoran also acquired IP related to optical storage technology, which it intended to utilize in chips targeting DVD recorders.[13]

DVD chip sales reached a climax in Q2 2004, after which a significant inventory correction in China greatly affected Zoran.[14] Thereafter, revenues from DVD products declined from a substantial majority of revenues until the middle of 2004 to 8% of revenues by 2010. DVD chip revenues were affected by significant declines in average selling prices and associated commoditization of DVD player chips, resulting in lower revenues and profit margins, and market share loss due to competition from low-cost competitors.[citation needed]

Growth in non-DVD product lines

By 2005, its COACH product line for digital camera processors, which built on its earlier JPEG expertise, had started to become significant and would be the largest revenue contributor in Zoran's later years. The printer/imaging business acquired from Oak also consistently contributed in the region of 20% of revenues.[1][15]

Targeting the mobile phone market, Zoran acquired Emblaze Semiconductor (based in Israel close to a large part of Zoran's own R&D facilities) in 2004 for $54 million in cash.[16] The resulting mobile phone multimedia processor product line eventually achieved limited success with production for LG camera phones in 2008, but could not sustain growth and Zoran discontinued development on this product line in Q3 2009.[17]

Zoran's revenues and net income peaked in 2007, with revenues reaching $507 million and non-GAAP net income of $71 million.[18] In 2008, revenues declined to $439 million, with non-GAAP net income declining to $8 million.[19]

The DTV product line for

LCD TVs for the US market.[17][21]

Decline in final years as independent company

For 2009, Zoran reported revenues of $380 million, declining from $439 million in the previous year, with a non-GAAP net loss of $13 million. TV revenues increased by 40% over the previous year on market share growth for DTV in the US, with market share reported to have reached 30%.[22] However, by Q2 2010 the DTV business began to see challenges and the outlook for this business was significantly reduced.[23] Around this time frame the market for DTV and digital camera chips started to suffer from increased competition and a trend towards commoditization, which had earlier affected Zoran's DVD chip business, resulting in reduced average selling prices and reduced profit margins.[citation needed]

Zoran's last acquisition was that of silicon RF tuner company Microtune Inc. in 2010, for a transaction price of approximately $166 million. Microtune's tuner chips targeted cable set-top box, broadband cable modem, digital TV, and automotive entertainment markets.[24]

Zoran posted a non-GAAP net loss of $21.5 million for the year 2010, on revenues of $357 million, with a loss of $15 million for Q4 2010 alone.

Cisco's exit from the video camcorder business.[25] For Q2 2011, its last quarter as an independent company, revenues declined to $83 million with a non-GAAP net loss of $18 million, although it forecast revenue growth to between $100 million and $105 million for the seasonally stronger third quarter of 2011.[26]

CSR plc merger

On 21 February 2011, Zoran announced it was merging with

GPS based in the UK.[4] At the time of the merger agreement, Zoran's board of directors was agitated by hedge fund Ramius LLC, which had said in a letter to the board that it believed Zoran's shares were undervalued.[27] Due to Zoran's decreased business outlook, the offer for Zoran was reduced to about $484 million in June from the originally agreed offer value of about $679 million (based on an all-stock transaction) under mutual agreement, although a significant cash component was introduced.[27] The merger was completed on 31 August 2011,[28] and Zoran now trades under the CSR banner with little mention of the original company name. Zoran described the transaction as a merger, but actually, it is a takeover according to CSR management.[citation needed
]

After the merger, CSR executed substantial layoffs involving former Zoran employees. The discontinuation of the DTV and silicon tuner divisions was announced at the end of 2011, involving the layoff of 800 employees,[29] which some say caused CSR's share price to jump up substantially. Other divisions were cut as well, and as of the end of 2012, only the COACH (camera-on-a-chip) and Quatro (printer/imaging) product lines still existed. In December 2013 CSR announced it would discontinue development of the COACH platform,[30] with around 200 people being laid off. As of 30 June 2014, CSR had sold the COACH and related camera/video IPs to Qualcomm.

Finally, Qualcomm acquired CSR.

Products

Zoran SupraHD chip

Zoran developed and marketed chips that were used in a wide range of consumer and professional electronics devices featuring

digital cameras, security cameras, digital TV set-top boxes, printers and related imaging devices, and mobile phones.[31]

As is common in the semiconductor industry, Zoran was a fabless semiconductor company that outsourced the actual manufacturing of chips to independent foundries such as TSMC. Apart from semiconductor chips, Zoran also commonly provided customers with associated reference designs including a printed circuit board layout and a bill of materials with required components for common configurations, as well associated firmware and software tools, allowing a customer to bring an end product (for example, a DVD player or digital camera) to market faster with a reduced amount of investment while requiring less technical expertise.

Examples of successful chip families sold by Zoran include the Vaddis product line that was widely used in DVD players, especially in earlier brand-name models with upscaled

ATSC and NTSC standards for the US market.[31]

Other specific target applications included set-top boxes for digital TV deployment[31] in Asia, converter boxes facilitating the transition away from analog terrestrial television in the US,[citation needed] DVD recorders with the Activa product line featuring MPEG-2 encoding,[31] and high-end camera phones with APPROACH camera multimedia processors.[31][33]

Prominent customers and products using Zoran chips included DVD players from brands such as

Epson, HP, Lexmark, and Samsung.[37]

References

  1. ^ a b c d e f g h "Zoran Corporation Reports Fourth Quarter and Full Year 2010 Results". Marketwire. 2011-02-03. Retrieved 2014-08-18.
  2. ^ "Zoran Sets Organization Changes". InsideChips. 2001-04-03. Retrieved 2014-08-19.
  3. ^ "FORM 10-K". U.S Securities and Exchange Commission. 2003-03-31. pp. 12–13. Retrieved 2014-08-18.
  4. ^ a b "CSR Plc announces merger with Zoran Corporation". Bloomberg. 2011-02-21. Retrieved 2014-08-18.
  5. .
  6. ^ a b "FORM 10-K". U.S Securities and Exchange Commission. 2003-03-31. p. 21. Retrieved 2014-08-18.
  7. ^ "FORM 10-K". U.S Securities and Exchange Commission. 2003-03-31. p. 11. Retrieved 2014-08-18.
  8. ^ "Form 10-Q". U.S. Securities and Exchange Commission. 1999-11-15. Retrieved 2014-08-19.
  9. ^ "FORM 10-K". U.S Securities and Exchange Commission. 2003-03-31. p. 29. Retrieved 2014-08-18.
  10. ^ "FORM 10-K". U.S Securities and Exchange Commission. 2003-03-31. p. 64. Retrieved 2014-08-18.
  11. ^ "Zoran to buy Oak Tech for $358 mln in stock, cash". MarketWatch. 2003-05-03. Retrieved 2014-05-16.
  12. ^ "Oak to Acquire TeraLogic for $38M". EDN. 2002-10-08. Retrieved 2014-08-18.
  13. ^ "Oak wanted to buy Zoran, but the price was too high". Haaretz. 2003-05-27. Retrieved 2014-08-19.
  14. ^ "Ex-99.1". U.S. Securities and Exchange Commission. 2004-10-05. Retrieved 2014-08-19.
  15. ^ "Zoran Corporation Reports Fourth Quarter and Year End 2005 Results". PR Newswire. 2006-01-30. Retrieved 2014-08-18.
  16. ^ "Zoran Corporation Agrees to Acquire Emblaze Semiconductor and Enters the Multimedia Mobile Phone Market". PR Newswire. 2004-06-07. Retrieved 2014-08-18.
  17. ^ a b "Zoran Corporation Reports Third Quarter 2009 Results". Marketwire. 2009-10-26. Retrieved 2014-08-18.
  18. ^ "Zoran Corporation Reports Record Results for the Fourth Quarter and Year End 2007". Marketwire. 2008-01-28. Retrieved 2014-08-18.
  19. ^ a b "Zoran Corporation Reports Fourth Quarter and Year End 2008 Results". Marketwire. 2009-01-26. Retrieved 2014-08-18.
  20. ^ "Zoran Corporation Reports First Quarter 2009 Results". Marketwire. 2009-04-28. Retrieved 2014-08-19.
  21. ^ "Zoran Corporation Reports Third Quarter 2008 Results". Marketwire. 2008-10-27. Retrieved 2014-08-18.
  22. ^ "Zoran Corporation Reports Fourth Quarter and Year End 2009 Results". Marketwire. 2010-01-25. Retrieved 2014-08-18.
  23. ^ "Zoran Corporation Reports Second Quarter 2010 Results". Bloomberg. 2010-07-26. Retrieved 2014-08-18.
  24. ^ a b "Zoran to buy Microtune for $166 million". EETimes. 2010-09-08. Retrieved 2014-08-19.
  25. ^ "Zoran Corporation Reports First Quarter 2011 Results". Marketwire. 2011-05-09. Retrieved 2014-08-19.
  26. ^ "Zoran Corporation Reports Second Quarter 2011 Results". Marketwire. 2011-07-26. Retrieved 2014-08-19.
  27. ^ a b "CSR cuts offer for Zoran". EETimes. 2011-06-17. Retrieved 2014-08-19.
  28. ^ "CSR and Zoran combine to create a leading provider of platforms and solutions to the global consumer electronics industry". CSR. 2011-08-31. Retrieved 2014-08-18.
  29. ^ "CSR guts Zoran's DTV chip business". EETimes. 2011-12-12. Retrieved 2014-08-19.
  30. ^ "CSR announces end of Coach investment". RNS/London Stock Exchange. 2013-12-10. Retrieved 2014-08-18.
  31. ^ a b c d e "Form 10-K". U.S. Securities and Exchange Commission. 2008-02-29. pp. 8–9. Retrieved 2014-08-19.
  32. ^ a b "Zoran's COACH Digital Camera Processors Powering Over 100 Digital Cameras on Display at Photokina". Marketwire. 2010-10-04. Retrieved 2014-08-18.
  33. ^ a b "Zoran's APPROACH® 5C Multimedia Processor Powers LG's New Viewty 5 Megapixel Camera Phone". Marketwire. 2007-11-29. Retrieved 2014-08-18.
  34. ^ "Zoran powers Samsung's new HDMI DVD players". EETimes. 2007-08-07. Retrieved 2014-08-19.
  35. ^ "Form 10-K". U.S. Securities and Exchange Commission. 2008-02-29. p. 11. Retrieved 2014-08-19.
  36. ^ "Zoran Demonstrates Latest DTV Platforms for Worldwide Manufacturers at CCBN 2011 in Beijing". Marketwire. 2011-03-23. Retrieved 2014-08-18.
  37. ^ "Zoran Demos New DTV, Set-Top Box, Silicon Tuner, Digital Camera and Printer Platforms for Worldwide Manufacturers at Computex 2011". Marketwire. 2011-05-31. Retrieved 2014-08-18.

External links