Prospectus Summary
PROSPECTUS SUMMARY You should read the following summary together with the entire prospectus, including the more detailed information regarding us and the common stock being sold in this offering and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the section entitled “Risk Factors.”SiRF TECHNOLOGY HOLDINGS, INC.
We are a leading supplier of Global Positioning System, or GPS, semiconductor solutions designed to provide location awareness capabilities in high-volume mobile consumer and commercial systems. Location awareness capabilities allow a user to determine and use location information to gain access to applications and services, such as navigation or roadside assistance. Location awareness capabilities may be combined with wireless connectivity to enable a range of tracking and location applications, such as child and asset locators. Our products use the Global Positioning System, which is a system of satellites designed to provide longitude, latitude and time information to GPS-enabled devices virtually anywhere in the world.
Our products have been integrated into mobile consumer devices such as mobile phones, automobile navigation systems, personal digital assistants, handheld navigation devices and GPS-based peripheral devices, and into commercial systems such as fleet management and road-tolling systems. We have an intellectual property portfolio of 71 patents granted in the United States and 10 patents granted in foreign countries.
We market and sell our products to original equipment manufacturers, or OEMs, of four target platforms: wireless handheld devices, including mobile phones, automotive electronics systems, including navigation and telematics systems, portable computing devices, including personal digital assistants and notebook computers, and embedded consumer applications, such as recreational GPS handhelds, digital cameras and watches.
Mobile communications devices are gaining broad acceptance among consumers. According to IDC, the number of new mobile phones sold worldwide is expected to increase from over 456 million in 2002 to over 681 million in 2006. IDC estimates that the number of handheld devices and notebook PCs sold worldwide will increase from 48.3 million in 2002 to approximately 140 million in 2006. These devices increasingly provide for wireless data access. Recent technological advances have created the potential for location awareness capabilities to be added to these mobile devices. A number of factors are driving the growth of GPS-enabled devices. In the United States, the Federal Communications Commission, or the FCC, has mandated that all wireless carriers deploy location technology into their networks. Three out of six national carriers are using GPS-enabled handsets to meet the E911 requirements. Under the E911 mandate, by December 31, 2005, these carriers must ensure that 95% of all subscribers’ handsets are location-capable. In Europe, countries such as Germany and Switzerland are implementing GPS-based road-tolling systems to tax commercial vehicles for usage of highway systems. Many automobile OEMs are adding navigation and telematics systems to their automobiles as a value-added option to enhance the consumer experience. Enterprises are using GPS-equipped systems to manage fleets, protect assets and improve supply chain logistics.
High-volume consumer and commercial applications for location awareness can be generally classified into four groups: convenience, safety and security, productivity and mobile information access. An example of a convenience application is a handheld device that provides personal navigation capabilities using GPS and mapping software. Personal safety and security can be enhanced through the ability to locate and track lost persons using a specifically designed device with GPS and wireless connectivity or a mobile telephone with GPS. An example of an enterprise productivity improvement application is the use of location information to more efficiently route work teams or assets between multiple job sites. Mobile devices that can access wireless data
Index to Financial Statements
can use location awareness capabilities to filter information relevant to the user based on his or her location, such as the closest gas station, or to share that information with a group of users for coordination purposes.
Our products are available in four forms. First, our chip sets are designed to enable our customers to quickly integrate distinct GPS capabilities into their products. Chip sets are the semiconductor devices used to receive and process signals from GPS satellites to calculate user location. Second, OEMs that need to quickly add GPS functionality to systems designed for other functions may purchase modules based on our chip sets from our value-added manufacturer customers. Third, we offer licenses of our intellectual property cores to companies that require a higher level of integration. Our intellectual property cores consist of the design code for our chip sets and the code for the software embedded into our chip sets. Purchasing our products in this manner enables our customers to integrate location technology into their products at a low cost because they do not have to purchase separate chip sets. Fourth, we offer premium software products that enhance our chip sets and intellectual property cores with algorithms designed to provide superior performance in several specific end-market applications.
Key benefits of our products include rapid calculation of location, high quality signal reception and accurate location information. In addition, their small size, low power consumption and low heat dissipation make our products well-suited for mobile devices. We believe that our products can detect signals with as low as 1/100th the strength of normal GPS satellite signals and can track signals with as low as 1/400th the strength of normal GPS satellite signals. We believe that products incorporating our technology can acquire signals quickly, improving the performance of GPS devices in urban areas, indoors and under dense foliage.
We introduced our first chip set based on our first generation architecture, SiRFstarI, in late 1996. Our architecture is the core technology used in our products to detect GPS satellites and receive and process information from the satellites to determine location. We introduced a low power product line, called SiRFstarI/LX, in October 1997. We introduced our SiRFstarII architecture in both chip set and intellectual property core form in 1999. We initiated production of our first product family, called SiRFstarIIe, based on this architecture in August 2000 and launched lower-power versions called SiRFstarIIe/LP and SiRFstarIIt in 2002. In October 2002, we introduced SiRFLoc, and in May 2003, we introduced SiRFXtrac, both of which are premium software products. We do not own a fabrication facility, but use third-party contractors to perform manufacturing, assembly and test functions.
We began our operations when our subsidiary SiRF Technology, Inc. was incorporated in February 1995. In September 2001, we completed a reorganization in which SiRF Technology, Inc. became a wholly owned subsidiary of a newly-formed holding company, SiRF Technology Holdings, Inc. Our headquarters are located at 148 E. Brokaw Road, San Jose, CA 95112, and our telephone number is (408) 467-0410. In this prospectus, “SiRF,” “we,” “us” and “our” refer to SiRF Technology Holdings, Inc. and its subsidiaries and not to the underwriters or the selling stockholders.
SiRF®, SiRFStar® and the SiRF name and orbit design logo are our registered trademarks. The following are trademarks of SiRF Technology, Inc., some of which are pending registration as intent-to-use applications: SiRFstarII™, SiRFLoc™, SiRFDRive™, WinSiRF™, SiRFNAV™, SiRFXtrac™, SnapLock™, SnapStart™, FoliageLock™, SingleSat™, TricklePower™, Push-to-Fix™, UrbanGPS™ and Multimode Location Engine™. This prospectus also includes trade names, trademarks and service marks of other companies and organizations.