Uniview tries to hang on while technology catches up
5/7/2001
dfwtechbiz.com
By Scott Boyter
Executives with Dallas-based Uniview Technologies Corp. must cringe every time they hear or read another story about how digital subscriber line, or DSL, technology has been slow to catch on in the United States.
The reason? Domestic acceptance of DSL could determine whether or not the company survives.
Uniview (Nasdaq: UVEW) manufactures the 310VOD, a digital set-top box designed to bring video on demand, or VOD, high-speed Internet, and several other services to home televisions.
The target market for the boxes is DSL providers such as Southwestern Bell, which could ride those services into the home by using a box like Uniview’s.
“We feel we’re in the ‘sweet spot’ with the 310 as a VOD box because DSL providers are finally getting market penetration to sell the service, and the quality of the technology that deploys and supports this kind of throughput is finally there,” said Cameron Hurst, Uniview chief technology officer.
The 310VOD can be viewed as a cross between WebTV and Tivo, the television that allows users to pause live television programming and record multiple programs at once. The device supports the new Media 8 software product from Microsoft Corp., which delivers digital video disk, or DVD, quality video over the Internet.
A demonstration of the 310VOD using Media 8 occurred April 26 at NAB2001, an electronic media trade show put on by the National Association of Broadcasters in Las Vegas. NAB2001 is a worldwide gathering of television and radio broadcasters and telecommunications, multimedia, film and Internet professionals.
“I can tell when something is going to be a flop — this is going to be a winner,” said Jeremy McKane, chief executive of Internet streaming provider Mindverge Inc. of Dallas, who saw the NAB2001 demo. “The box is so easy to use, anybody’s mom would be able to operate it.
“I was impressed enough that we will try and partner with Uniview to use the box for a project I’m working on,” McKane said. “We were thinking about manufacturing a box ourselves, but they beat us to the punch.”
From all indications, the 310VOD was a hit, although no one from Microsoft was available for comment. But no matter how much buzz the box generates, Uniview still faces significant obstacles to survival.
The company, formed in 1996 as an offshoot of electronics manufacturer Curtis Mathes Holding Corp., faces the dreaded delisting from the Nasdaq stock exchange because it cannot comply with the stock exchange’s SmallCap Market requirements. Nasdaq requires stocks listed on its SmallCap Market board to be priced at $1 or more, and Uniview’s stock was trading at 49 cents a share at the close of market May 2. The company’s 52-week high was $4.25, reached in April 2000.
“Hundreds of companies are at 52-week lows — we happen to be in a group trading under a dollar,” said Bob Fudickar, Uniview director of investor relations. “But revenues are improving, and we’re approaching a cash flow-neutral situation.”
Revenue has hovered at about $10 million the last two years, Fudickar said, compared with $2.5 million in 1998. Uniview is seeing some demand for the 310VOD in Europe, chiefly in hospitals and hotels wanting to provide television viewing alternatives for what are basically captive audiences.
In addition, Uniview generated about $800,000 by licensing the Curtis Mathes name to an undisclosed, third-party television manufacturer. Uniview has also signed a $50 million deal to provide 100,000 310VODs to Australian telecom provider Tele2000, although Uniview will not see any money until the country’s broadband infrastructure is ready. Fudickar hopes the order will begin shipping in June.
Uniview is also providing 310VODs for use by Cincinnati Bell DSL customers, who get their DSL service from ZoomTown.com. Broadwing Inc. owns both Cincinnati Bell and ZoomTown.com.
Equity analyst Murray Arenson, who works in the Dallas office of investment firm Morgan Keegan & Co. Inc., said Uniview has done well in developing new technologies and adapting them quickly. He added, though, that the company has to survive month-to-month because funding sources are hesitant to wait for a long-term payoff.
“I don’t have a magic answer, and I don’t know if there is one,” Arenson said. “They will have to look in different directions to find partners that can give them money. They also need to turn to their other assets and monetize them, such as what they’re doing with the Curtis Mathes brand.
“I don’t think video over DSL will penetrate in a big way for another 12 to 24 months,” he said. “But they don’t need deep national penetration, just a few key deals and stepping-off points.” |
