Slab Tech takes off with a roar (but no hiss)

Auckland-based digital signal and audio systems start-up Slab Technology is in expansion mode after buying an overseas company and building a promising 'noise cancellation' system for aeroplanes.

Auckland-based digital signal and audio systems start-up Slab Technology is in expansion mode after buying an overseas company and building a promising “noise cancellation” system for aeroplanes.

Slab’s expansion comes as its speaker products go on the US market for the first time, through distributors Labtec, a computer peripherals company, and Guillemot. Part of the reorganisation will also see Slab pitching direct into the local market with a new, locally produced top-end, “extreme” flat-panel speaker range.

“We have tried to stay an intellectual property company, but we also realise there is a need to see some revenues from production,” chief executive Chris Lock says of the expansion. “[But] We’ve got about 16 to 17 patents in the sounds side and we won’t be able to stop issuing these as we move further into new technologies.

“There is now an intellectual property value associated with our company that we can’t deny.”

Slab, which counts among its investors AMP and venture capitalist Caltech Capital, was reorganised over Christmas into an international parent company with two, almost polarised local R&D “hothouse” subsidiaries in Auckland, each holding a number of patents. One is based on the company’s original flat-panel speaker technology - that is, creating sounds - and one on digital signal processing - that is, noise cancellation - with its first application for aircraft entertainment systems catching the eye of Japanese giant Matsushita’s avionics arm.

To service the growing demand for its speakers, Slab Sound has also bought its Hong Kong-based licensee manufacturer as a sales and marketing centre and is setting up another subsidiary in China as a boutique factory for limited product runs. Slab has also brought into its fold a young Auckland speaker design company called Audio Fusion, which has begun to make a name for itself with sculpture-like speakers.

Slab’s staff have doubled to about 20 and it is still recruiting, with plans under way to open offices in the US and Europe.

Lock says the speaker subsidiary is the bigger of the two businesses, bringing in royalties from computer speaker sales from Labtec, a $US100 million company currently being acquired by Nasdaq-listed Logitech International, and from Guillemot, which last year set up an Australian arm. Future revenues will include those from the Extreme-branded speakers produced and exported from here.

Slab’s tiny flat speaker technology, as distinct from cone technology, uses few components and is based on electrodynamics.

But Lock says the digital signal processing subsidiary may challenge the speaker arm in size within the next few years. Slab DSP uses active noise reduction techniques and software solutions along with its patented transducer technology to create "surround sound" silence.

Potential revenues in the airline industry could come both from long-term contracts for aircraft seat systems – aeroplane seats have an average life of seven years – and from disposable headsets.

Lock won’t comment on the specifics of his company’s first deal, which were outlined by Matsushita, the parent company of brand Panasonic and often claimed to be the world’s largest supplier of inflight entertainment systems, as a “strategic undertaking” with regard to potential incorporation of Slab's products into its systems.

Lock also wouldn’t reveal this year’s projected revenues for the company, but says they are already significant.

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