Speeding on South Korean roads? If you think no one is looking, you’d be sure to get a ticket, for every fifth or sixth intersection will have a camera. You will never know when the camera will capture you! But here is the idea; your car has a built-in speed trap avoidance system. Approach a speed trap camera and the device goes crazy, beeping wildly while reminding you of the legal speed limit.

Cut to Netherlands: Suppose you are in a park with your two children and one of them wanders off. Your heart just literally stops! Using the child locator system you can locate where your child is at any moment. When your child is at school, you can track your kids’ location information via mobile phone. How about using the same system to locate your pets? Literally, there are thousands of location-based consumer applications one can think of.

Now you’re on Park Avenue in New York City, looking for that quaint little Italian restaurant in midtown Manhattan. You could use your Nextel cell phone or a navigation system to provide you turn-by-turn directions to your destination. In fact, to any address in the North American continent and Hawaii.

Under the hood of these applications is a special signal processor built for Global Positioning System, a satellite-based technology to pinpoint location anywhere in the world. With a GPS-enabled wireless device, two things happen. First, the GPS hardware fires up and starts hunting down satellites to calculate position. And then the device makes a quick connection to a special server run by the service provider, which quickly delivers location based content or service.

Building the GPS chipsets is a quiet company in San Jose, CA: SiRF. The company has grown and thrived in the past ten years. “The power of having the location information with you wherever you go is like having power of time, wherever you go. As we get into the mobile society, the power of location becomes more important than ever before,” says Kanwar Chadha, the company’s founder and vice president of marketing.
Since going public in April 2004, the company has seen revenues climb 60 percent to $117 million, and net profit hit $30.7 million last year. Strong order booking and demand for its GPS products puts SiRF on a different terrain. SiRF expects the growth to continue.

On The Drive
The first customers of SiRF were not in the U.S, but in Japan and Europe. The first generation car navigation systems had just started to take off in the late 90s. They were not only huge in size but also expensive. And with only high- end cars like Mercedes, BMW or Acura, one could expect to use navigation systems. Chadha sensed the opportunity and believed he could enable development of similar systems at a much lower cost.

Chadha and his team were successful in bringing down the price points of the core GPS technology for navigation. However, getting to the market wasn’t easy. “The automotive OEMs are very conservative. They don’t like dealing with startups. We had many meetings with them. They loved our technology, but they just didn’t buy because they feared we might go out of business,” says Chadha. It took time for SiRF to establish credibility. Today, it is a different ball game. SIRF garners substantial revenue from the automotive sector.

Consulting firm Gartner predicts that GPS-based car navigation will grow from 8.7 million cars today to 16 million by 2006. General Motors, Toyota, Honda and others include navigational and help systems in many of their models. In addition to the traditional systems, today portable navigation systems are driving high growth in this market. Europe has a proposal to make it mandatory for cars to be equipped with basic GPS type system by 2009, which would automatically trigger the emergency service operator in case of an accident. Such regulations will further fuel the growth of GPS market, thereby benefiting SiRF. The competition for SiRF really comes from local companies in Japan, who have tried to popularize the technology since the mid-90s.

Upwardly Mobile
Beyond the car, the cell phone has also been a strong market for SiRF. In many cases, consumers prefer personal navigation applications on their handsets. With GPS getting embraced as the technology of choice, companies like SiRF stand to benefit.

The recent surge in GPS-enabled handsets, at least in the U.S., can be largely traced to the FCC’s mandate that cellular carriers must ensure that the phones on their networks can be located by rescue workers when people dial 911. Today, most of the carriers—Verizon Wireless, Nextel, Sprint—have adopted GPS. Even carriers in Europe and Asia are providing location-based GPS services and content.

SiRF’s focus on this segment has been aggressive. In 2001, SiRF acquired Conexant’s GPS business, in 2003 it acquired the start-up Enuvis and three months ago it acquired Motorola’s GPS business. Having gained strength through acquisitions, SiRF today competes head on with Qualcomm in this space.

Chadha is also closely watching the PDA and the Notebook market. He claims GPS offers the last, best hope for the PDA. With smart phones absorbing calendar and phonebook features, the PDA would become more of a location and mapping device to survive. SiRF started rolling out products for the PDA market about four years ago and has gained some traction in Europe and the U.S.

Notebooks with built-in GPS technology are yet to hit the market. Chadha believes the GPS market for notebooks should take off by 2007. For enterprises, GPS-enabled notebooks can ensure security. “Notebook theft is a big problem. Cost of computer is cheap. But the cost of data in the computer is very high. With GPS-technology, enterprises can make sure that the notebook works only in certain locations and is locked elsewhere,” says Chadha who is patiently waiting for this market to explode.

And Microsoft with its focus on Geographic Information Systems is surely steering the market toward its boom. The next generation of Microsoft’s OS—Vista will have an inbuilt information location system. So when a developer is building an application, location-related modules are readily available in the system libraries. Microsoft, Google and Yahoo’s thrust on mapping applications further reinforces that location will be part of every desktop or notebook. Chadha hopes that SiRF will lead the pack in every segment of the GPS market as it unfolds.

Ahead of the Pack
“Technically, it was not difficult to get GPS technology into the chipset level. The challenge was, when you put into devices like the cell phone, PDA or the notebooks, how is it going to work?” asks Chadha. Engineers at SiRF have over the past 10 years, perfected the GPS system to work better in various devices and platforms. It doesn’t stop there. “In future we will see how to make it work on wrist wear,” says Chadha.

As he made his stride into the GPS market, Chadha maneuvered SiRF to create significant competitive barriers. And to SiRF’s advantage, there are very few people in the world who understand how the GPS system works as it is relatively a protected system.

“GPS is not a silicon game. It is much more of a system and algorithm game. People cannot duplicate business model easily,” says Chadha. SiRF today has more patents than any company of its size. “We have 140 patents in our kitty and in addition we have applied for 200 more,” he informs. Having a strong patent portfolio is one of the key steps to ensure that SiRF remains in the leadership position.

Before SiRF rolled out its products, GPS devices were expensive, slow, and bulky. They would routinely take more than a few minutes to give you a fix—and unless you were in an open field, even that fix was dodgy. The GPS system was designed to work in any part of the earth as long as the view to the satellites was clear. “Nobody focused on how to make the system work in urban canyons or dense foliage where the satellite view is obstructed,” says Chadha. “Most research was focused on how to get within a millimeter of accuracy, not how to get a quicker response.” The urban canyon problem is largely an issue of speed. A moving target can only intercept satellite signals for brief periods of time before high-rise structures block them again. To get around the problem, the company incorporated 240 correlators, which search for satellite signals, into its first chipsets. Typical chipsets at the time contained around 50 correlators. “The more correlators, the more deep and broad the search,” says Chadha. “You need a satellite search engine that is very fast. Today our flagship products incorporate 200,000 correlators.”

Earlier, the battery life was short and the military, not consumers, were the biggest customers. Battery life is now better. SiRF has driven power consumption down from 1.5 watts to less than 100 milliwatts. The goal, on a wearable GPS unit, is months of battery life when used many times a day. “We’re less than five years from that day,” says Chadha.

Early Days
Chadha founded SiRF in 1995. This was not his first venture as an entrepreneur. In 1989, he had co-founded AQuesT, which developed multimedia and 3D graphics acceleration products. During the economic slowdown of late eighties, investors became skeptical and carefully evaluated every business model before they gave more money. In AQuesT the flow of money stopped despite the forward-looking ideas of the company. “There wasn’t enough money to keep us excited. As an entrepreneur you have two choices—follow the money and keep doing what they [VCs] want you to do or do what you want to do. Not having enough money to do it right hurts you,” recalls Chadha. Soon AQuesT shut its operations and Chadha had learnt his first entrepreneurial lessons; always take money when you don’t need it.

“At SiRF, we got good valuation over a period of time,” says Chadha. However, raising money ahead of time isn’t always easy. “Three weeks before September 11, 2001 we had commitment from many investors for a funding round. Some of the investors pulled back after the WTC incident. We had money to survive. But it took us more than six months to go back and complete the round,” notes Chadha.

Chadha had the backing from Diosdado Banatao, founder of S3 (now SonicBlue Inc) who invested in SiRF. Chadha brought in many corporate investors during multiple funding rounds—Nokia, Intel, Dell, Mitsubishi, Hitachi, Yamaha, Matsushita and MiC, an NTT DoCoMo affiliate. “Corporate investors have more patience,” quips Chadha.

Patience, yes, Chadha has it more in him. He plunged into the GPS space when the market wasn’t really there. He believed in his intuition, an attribute necessary especially when the market is not defined. With the gutsy feeling, he went out convincing and roping in investors. “We were realistic and conveyed to the investors that high growth market isn’t going to open up for the next five years. We made them believe, one day this market will take off and when it does SiRF will be on the leading edge of the wave,” explains Chadha.

Chadha should be proud that his intuition has today put him on that “leading” edge. Getting there wasn’t easy. Marketing combined with product architectural definition is what Chadha enjoys. His M.S. in Computer Information Systems from the University of Pennsylvania, and an M.B.A. from the Wharton School of Business at the University of Pennsylvania gives him that flexibility. Sound technical knowledge coupled with strategic thinking has kept Chadha and his business under good stead.

Many founders take a back seat or get out of day-to-day operations as the company grows. For Chadha the steam hasn’t died yet. He speaks with the same energy and passion, as he did in the early days of SiRF. A founder into a marketing role is a rare breed. Chadha enjoys every bit of it. As he jokes, “A customer recently told me, ‘we meet executives from various companies. We don’t meet founders too often.’”

In response to the technological advancement, consumer interest and government mandates, the GPS market is heating up. SiRF’s market leadership and vision for mass-market adoption of location technology will ensure that it is “Built to Last.”