Irvine-based Paragon Software Group Inc. has notched a key design win to supply networking technology to China’s second largest telecommunications equipment maker.
Paragon’s five-year deal with Shenzhen-based ZTE Corp. to license Paragon’s universal file system driver for new-generation Android devices is valued at several million dollars. The deal also provides the company an entree into the booming smartphone market in the world’s most populous country.
“We’ll be shipping 5 million-plus handsets with this particular deal,” said Paragon President Tom Fedro. “Over time, this will be a very good financial deal for us.”
Paragon’s driver is embedded in ZTE’s recently launched Vodafone Smart Ultra 6 and Warp 6 Android smartphones, allowing the devices to communicate with secure digital memory cards typically 64 gigabytes or higher.
SD cards higher than 32 gigs are formatted with a Microsoft standard called exFAT that doesn’t sync with Android devices. Paragon’s offering acts as a Rosetta Stone of sorts, linking separate and distinct file systems.
The technology allows smartphones, smart TVs and monitors, tablets, media players, routers and other equipment to communicate with storage media, giving consumers the ability to streamline content through any device from any storage media format or file system, regardless of chip configuration or operating system.
“This deal solidifies our position in this niche,” Fedro said.
ZTE last year sold 18.2 million smartphones in China and had a roughly 4.5% market share, according to the China division of Englewood, Colo.-based market researcher IHS iSuppli.
Mobile phones accounted for about 28% of the company’s $13.1 billion in annual revenue. China makes up about half of ZTE’s sales, according to the company’s annual report.
“This is going to be a global opportunity,” Fedro said. “It was a major win for us to get into such a large manufacturer right off the bat.”
And it’s a nice revenue bump for Paragon, which projects $15 million to $20 million in annual sales this year.
Workers
The company, established in 1994, is OC’s 32nd largest software maker, with 15 local employees, according to a recent Business Journal list on the diverse sector.
It employs about 200 companywide, with other offices in Japan, Russia, and Freiburg, Germany, the home of parent Paragon Technologie GMBH.
Paragon Software has attracted several big-name customers with its universal file system driver, including Kingston Technology Co. and networking gear maker D-Link Systems Inc., both based in Fountain Valley, as well as Hewlett-Packard, Belkin and Seagate.
Kingston, OC’s largest minority-owned company and the world’s largest memory products maker for computers and consumer electronics, uses the drives in its MobileLite Wireless family of media readers to allow consumers to free storage capacity on their devices by offloading content to USB drives or flash cards.
Paragon’s other major business line of providing backup and recovery services is handled by value-added resellers, essentially technology consultants that sell goods and services to businesses.
