The chip technology of Israel's Ceva Inc. (Nasdaq:CEVA); LSE:CVA) is being integrated in the hearing devices of Swiss company Sonova. Up until now, however, Ceva received revenue only from the sale of licenses for this technology. The two companies now report for the first time an agreement in which upon the beginning of sales in the market, the Israeli company will also receive royalties. Royalties will be paid for every device sold that contains the chip in which Ceva's technology is integrated.
Ceva provides chip design technology for the mobile market, but in recent years has expanded its activity to various other markets , including Internet of Things (IoT) products, mobile device base stations, etc.
Under the agreement with Sonova, Ceva provides the Swiss company with Bluetooth technology integrated into Sonova's Sword 3.0 chip. This chip is based on a wireless sender/receiver, which Ceva says is the only one that currently fully supports direct audio streaming between both ears of hearing aids and smartphones and provides connectivity for other streaming media. The company says that this connectivity makes it possible to adjust the hearing aid in real time and in any situation and place to the quality of sound in telephone calls, and even to transcribe voice calls into text in real time.
Technology for 1.5 billion devices
Ceva's Bluetooth technology is based on the RivieraWaves company, which Ceva acquired in 2014 for $19 million. The acquisition expanded Ceva's activity to Bluetooth and WiFi connectivity. Ceva now says that the company's Bluetooth technology has been integrated in 1.5 billion products so far, from smartphones to wearable hearing aids.
Ceva VP and general manager connectivity Aviv Malinovitch said, "Cooperation with Sonova is evidence of our Bluetooth technology's quality, even in the most difficult cases. We expect our joint work with Sonova to continue with the Bluetooth standard becoming the default option for hearing aids and accessories."
Ceva, managed by CEO Gideon Wertheizer, has a $576 million market cap, following a 48.6% decline in its share price since reaching its peak one year ago, when the company's market cap was $1 billion. The share's underperformance over the past year is due to difficulties with Chinese customers because of the trade war and more general weakness in the mobile market, as well as a change in accounting standard that makes it difficult for the company to recognize revenue from royalties in the same quarter in which the customer recognizes them.
Published by Globes, Israel business news - en.globes.co.il - on November 27, 2018
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