A recent software distribution deal struck by an Irvine-based company with barely any sales provides some insight on its $560 million market value.
Ubiquity Inc., launched in 2007 by entrepreneur and Chief Executive Chris Carmichael, has signed a letter of intent with Hong Kong-based motherboard maker American Tec Co., which will embed Ubiquity’s new search engine software geared for smartphones and tablets throughout Asia.
The company projects that the deal to embed the Sprockets product into a small percentage of the 400 million phones America Tec supplies components for annually will generate about $150 million in annual sales. The agreement marks Ubiquity’s first major development since it applied for a listing on the Nasdaq exchange, a bid to step up from the over-the-counter bulletin board.
The deal to distribute Sprocket in India, China, Hong Kong, Vietnam, and other parts of Southeast Asia will run through at least 2017 and could mean another $200 million to $300 million in sales, according to Carmichael.
The agreement calls for Amtec to identify key buyers in the region that specialize in mobile technology for Ubiquity’s search engine software, which allows users to zero in on specific data points and provides Internet access and mobile services without the need to launch separate applications.
“It’s an operating system on an operating system,” Carmichael said. “We have designed this as the next generation of search.”
The software, which can be customized for lifestyle, social media, digital banking, mobile wallet, coupons and loyalty gifts, is targeting the enterprise market, filled with big-name companies such as Cisco, Google, Amazon, Hulu and Netflix.
Patents
The deal still has to be finalized but provides investors a clearer road map for Ubiquity’s plan to monetize several patents under its ownership.
Carmichael has spent more than $25 million acquiring more than 100 patents around the world for Ubiquity. It’s taken regulators more than five years to approve a fraction of them.
“We’ve been patenting this stuff since 1999 and 2000,” he said.
Carmichael has monetized only a handful of patents, generating about $1.2 million in 2011. Ubiquity has posted combined sales of about $425,000 and lost more than $63 million in the past two years.
The company changed its name in April from Ubiquity Broadcasting Corp. to reflect its expanded focus on software and patents.
Carmichael’s foray into the technology industry followed an interesting run in Hollywood, the apparel industry and surfing—he’s a former U.S. champion in the sport.
He built profitable clothing companies—Sun Breaker in Mission Viejo, and Salt Creek and Hard Core Sports Co. in Irvine—and sold them in the 1990s.
Sports runs in his blood.
His father, Albert “Hoagy” Carmichael, was the MVP of the Rose Bowl in 1953 before being drafted by the Green Bay Packers in the first round a year later. The Packer Hall of Famer set a record in 1956 for a 106-yard kickoff return, which stood for nearly 51 years.
Book, Film
Chris Carmichael, who wrote a book about that football era called “106 Yards,” preferred the large swells of the open sea to the gridiron, becoming a U.S. Surfing Champion from 1969 through 1971. He then parlayed his wild side into shooting dangerous film segments from helicopters and other moving vehicles.
He rode a skateboard at 40 miles per hour for a segment on his 1975 skateboarding feature film “Spinnin’ Wheels.”
Carmichael later became a producer of commercials, about 800 music videos and TV programs, and developed aerial footage segments for “Lifestyles of the Rich and Famous” and “20/20.”
The production and photography immersed him in his first forms of technology, leading him to ultimately establish his own digital services company.
“Content is always going to be king,” said the 60-year-old Laguna Niguel resident, who has grown Ubiquity to more than 30 employees at its 38,000-square-foot headquarters, which features a mobile control room that syncs live streams and other production technology.
“This has become a big lab for us.”
