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Hyderabad,
India, June 25, 2003—PortalPlayer, Inc., a leading
supplier of digital audio platforms for consumer electronics,
today announced plans to invest resources and funds in "Pinexe
Systems," a newly formed company launched today at a
press conference in Hyderabad, India. PortalPlayer's local
development team will become a part of Pinexe Systems, a provider
of outsourced design and development services. The move will
allow PortalPlayer to continue its technology innovation and
serve its customers with its existing development team within
a highly scalable, responsive and cost-effective business
model.
Led
by high-profile entrepreneur, J.A. Chowdary, the former president
of PortalPlayer's Indian subsidiary and a well-known 25-year
veteran of the Indian IT industry, Pinexe Systems will offer
a variety of VLSI/ASIC and embedded system design and development
services. To serve companies like PortalPlayer, Pinexe Systems
plans to establish dedicated offshore development centers
(ODCs). As a result, Pinexe Systems will offer its customers
the security, stability and consistency of an in-house development
team, with the flexibility, scalability and reduced overhead
costs of an outsourced supplier. PortalPlayer's development
team will join the first Pinexe Systems ODC and will be dedicated
to PortalPlayer and its customers' custom development activities.
"Our
Pinexe Systems' ODC will further strengthen PortalPlayer's
position as we continue to gain market share in the digital
audio market," said Gary Johnson, president and CEO,
PortalPlayer, Inc. "We serve a rapidly growing consumer
electronics segment which can often have unpredictable and
cyclical demand. By moving to the ODC model, we will give
our customers access to a highly skilled development team
that is capable of scaling up or down as demand shifts, and
yet will allow us to maintain the lowest possible overhead
cost."
India
has become an ideal region for outsourced design and development
due to its proximity to Asia, its core technology expertise,
and the large pool of available engineering talent. Pinexe
Systems was established to capitalize on the outsourcing trend
to India which has doubled since 2002. PortalPlayer's development
team will become employees and part owners in the new venture,
and will therefore have an opportunity to enjoy the rewards
of ownership in both the growing trend toward outsourcing
in India, and the tremendous growth predicted in the compressed
digital audio devices (MP3 player) market.
A
recent report from IDC forecasts that the worldwide market
for MP3 players, the end products that are enabled by PortalPlayer's
technology, will reach $44 billion in revenues by 2007. The
report predicts that broad consumer acceptance and the availability
of a variety of form factors will combine to drive demand.
"Moving
to an ODC model will streamline the design cycle for MP3 devices
and promote rapid product development," said Susan Kevorkian,
senior analyst with IDC's Consumer Devices and Technologies
Group. "Innovations like these by key technology providers
will help fuel MP3 player market growth by allowing device
manufacturers to drive down development costs and offer new
device form factors and feature sets."
PortalPlayer
has continuously adopted innovative business models to best
deliver its technologies to its customers. Unlike traditional
semiconductor companies who focus on delivery of silicon alone,
PortalPlayer's unique approach includes a complete platform
for digital audio and entertainment. From silicon, to firmware
and PC applications, PortalPlayer has developed a completely
integrated platform to help customers bring a variety of new
types of battery- and line-powered music recording and playback
systems to market.
"PortalPlayer
has proven its ability to adapt its business model to the
needs of its customers," said Charles Wolf, analyst with
Needham and Company. "The Pinexe Systems ODC will allow
the company to maintain its core IP development while at the
same time driving cost efficiencies and accelerating turnaround
times. This is exactly the kind of scalability that is required
to support the rapidly growing digital audio and entertainment
market."
About
PortalPlayer, Inc.
To
meet the growing demand for digital-audio-capable entertainment
products, leading manufacturers use PortalPlayer's platforms
to design and develop complete product families for the pocket,
home and car - from portable jukebox devices to stereo components
and systems that can record and playback digital media. PortalPlayer's
platforms are based on a fully customizable and scalable architecture
that includes a system on chip, firmware, and a PC-based digital
media manager application.
PortalPlayer
and the PortalPlayer logo are trademarks of PortalPlayer,
Inc. All other trademarks or registered trademarks are the
property of their respective owners.
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