Ubicom Frames a Market

A common failing among technical folks and gadget heads is remembering that much of the consumer population doesn’t think the way they do. Ubicom remembers, and by focusing on how consumers deal with home networking technology, the Sunnyvale, Calif.-based chip company sold 2.5 million chips last year.

Ubicom has won several awards for its chips, which are embedded in everything from wireless digital photo frames to home routers made by Linksys. Essentially the chip, with the help of Ubicom’s StreamEngine software, recognizes and prioritizes IP traffic across a network. As a result, products containing Ubicom chips consistently score better user reviews on shopping sites, at least according to the company’s VP of marketing, Keith Morris.

Ubicom began in 1996 as Scenix, making 8-bit high-performance microchips. In 2000, after realizing its original market was too fragmented to ever achieve real volumes, it switched its name and model. In 2004 it recapitalized and raised $41 million; more funding is expected to come later this year.

It competes against Broadcom and Marvell as well as other communications chips companies, but its differentiator is that it designs its chips with the end-user in mind. Apple has made millions, and defied the logic that open standards are preferred, by making easy-to-use products for the consumer. Ubicom builds that simplicity into the hardware of a device, making it a compelling value for OEMs selling into a sector.

Its next big market is the digital picture frame, which some see becoming a repository for all digital content within a home. Now that more frames are sold with Wi-Fi connectivity they’re able to do more, and Ubicom’s Stream Engine software and chips can help manage some of the complexity associated with adding another networked device to the home. Ubicom’s chips, which are in D-Link’s Wi-Fi Internet Picture Frames and others, may help get grandma online by automatically connecting to a Wi-Wi network and automatically linking to a user’s accounts — though it’s hard to say how far a chip company can push ease of use.