SimpleTech Cuts Workers as Memory Drops Further
Hop-On Calls on Infea in Disposable Phone Deal; DMarc Partners with Clint Eastwood
TECHNOLOGY
by Andrew Simons
The hard times facing computer memory makers aren’t letting up yet.
Just ask Santa Ana-based SimpleTech Inc., which recently laid off about 25 workers, or about 7% of its staff, according to a source familiar with the company.
The company didn’t return phone calls for comment.
The layoffs,mostly sales and production workers,were the result of the declining memory prices, the source said.
SimpleTech designs and makes memory and storage products. In the past four months, the price of the most basic form of memory has declined 50%.
The price drop stands to further squeeze other OC memory makers, which have seen losses and layoffs in the past year. The memory market is known for supply and price swings. OC companies such as Viking Components Inc., which recently was bought by San Jose-based Sanmina-SCI Corp., and Fountain Valley-based Kingston Technology Co. buy memory chips from Japanese and South Korean suppliers and assemble them onto circuit boards that go inside computers and networking gear.
Prices for memory boards are closely linked to chip prices. While local companies are paying less for chips, computer makers and consumers also are paying less for memory boards, squeezing profits.
The tough memory market has prompted some bold moves by local memory makers. After months of talk among memory insiders, word of Viking’s sale to contract electronics maker Sanmina broke last month.
Also this year, SimpleTech paid $3 million for Irvine-based Irvine Networks LLC, which had designed what’s called a content-processing switch,a circuit board that helps speed the processing of Web pages on servers. Irvine Networks now operates as a SimpleTech subsidiary called Xiran, which says its switch “will make it a lot less expensive to deliver a lot more content a lot faster than is currently possible.”
Kingston is going a different route: global expansion. The company opened up an office in China, hoping to gain market share there.
Wireless Deal
Garden Grove-based Hop-On.com Inc., which is close to the commercial launch of its disposable cellular telephone, recently signed a deal with wireless phone distributor and seller Infea LLC in De Pere, Wis.
Infea’s distribution unit will provide airtime for Hop-On’s disposable phones in some parts of the U.S., according to the deal. The agreement will also provide Hop-On with a broader prepaid billing platform, which will allow customers to add additional minutes to their Hop-On phones using a credit card or separately purchased prepaid calling card, thereby encouraging repeat usage.
“This agreement will further speed our commercial deployment and phone distribution,” said Hop-On chief executive Peter Michaels. “At the same time, we are continuing active discussions with other potential strategic partners.”
Hop-On has been trying to increase its profile lately as it nears completion of its disposable phone. Hop-On, a publicly traded company on the Pink Sheets board, recently announced it would step up communication with Securities and Exchange Commission so it can be listed among the slightly more prestigious over-the-counter section of Nasdaq.
“This is another significant move forward with our corporate strategy,” Michaels said. “We believe that full reporting status will better reflect the intrinsic value of Hop-On.”
The move comes just as the company’s design for a disposable cell phone was approved by the Federal Communications Commission. The company has been working on the design for the past four years,as long as the company has been publicly traded.
A Few Dollars More
DMarc Networks Inc., the outfit founded by Newport Beach-based entrepreneurs Chad and Ryan Steelberg, recently signed a deal with Malpaso Productions, Clint Eastwood’s production company.
The company is promoting Eastwood’s movie, Blood Work, through promotional text messages that are broadcast in static, paging and scrolling formats to car radios via participating radio stations.
DMarc makes software that along with computer gear sits inside radio tower transmitters. DMarc sends a stream of content that radio stations can select and direct to car radios. The text message,say a station’s call letters,is displayed on the radio’s screen.
The software sends song, artist, concert, news, stocks, weather, traffic and ad information to radios.
“Through dMarc’s dRDS technology we’re able to extend promotional methods beyond the traditional media buy, providing a new and creative avenue to garner consumer interest in an entertainment medium,” said dMarc President Ryan Steelberg.
DMarc’s content is broadcast over a subcarrier system,the 20% of a broadcaster’s frequency that is unused. The Steelbergs estimate that 75% of new cars support their radio display system.
The company has inked a deal with San Antonio-based Clear Channel Communi-cations Inc. to provide content via more than 50 Southland stations.
The venture is the Steelberg brothers’ third major one in the past decade. The two founded Costa Mesa-based AdForce Inc. in 1995, an Internet advertising company that allowed advertisers to target marketing messages to a specific audience. The duo started high-speed Internet service provider Winfire Inc. in 2000, which has since gone out of business.
