Spectra7 Poised for Growth with Next Wave of Mobile Tethered AR/VR/MR Headsets

SAN JOSE, CALIFORNIA–(Marketwired – Jan. 4, 2018) – Spectra7 Microsystems Inc. (TSX:SEV) (“Spectra7” or the “Company”), a leading provider of high-performance analog semiconductor products for broadband connectivity markets, believes that the future of AR/VR/MR will include growth in mobile tethered smartglasses that will rely on ultra-thin and light active copper interconnects enabled by the Company’s chips.

Tim Merel, Managing Director at Digi-Capital, describes “tethered smartglasses” in his TechCrunch article1 as one of four augmented reality waves that will help drive the AR market to more than a billion users and billion by 2021.2

Mr. Merel describes standalone smartglasses as the end game, but cites several challenges over the next few years. He writes, “Until a major breakthrough in battery technology or device efficiency, a lightweight pair of standalone AR smartglasses doing heavy-duty AR is hard to power all day without a battery pack or hot-swappable batteries… This is a non-trivial problem.” He also highlights issues on the software side, “…Mobile tethered smartglasses offer a potential solution to both.”1

Mr. Merel also points out that mobile offers potentially a much larger market for these devices, citing a dynamic in VR where mobile systems outnumber PC equivalents 10 to one.

Spectra7 is currently engaged with several leading smartglass and smartphone customers on these mobile tethered solutions.

“We’re extremely excited by this new high-growth market that leverages our current products from the PC tethered AR/VR/MR space,” said Spectra7 CEO Raouf Halim. “We anticipate seeing early production ramp with multiple smart phone OEMs in the second half of 2018.”

Leading smartphone models with USB Type-C ports support simultaneous display and data connections. Technology leaders already offering these advanced features currently represent about 1/3 of the 1.5 billion unit per year smartphone market, with others expected to follow in the next 6 to 18 months. This offers a large and growing installed base of phones that will potentially support tethered smartglasses as a simple peripheral.3

Spectra7 enables interconnects for these smartglasses to be as thin and light as cables typically used for audio ear buds. This dictates an outer cable diameter (OD) of 2mm or less. Spectra7’s interconnects make this possible by restoring the display and camera data signals that are attenuated and distorted by the extremely thin conductors. Typical passive Type-C cables have an OD of 5mm in diameter or larger. These large and heavy cables are a non-starter for connecting to light weight smartglasses.

Spectra7 believes tethered mobile solutions, where the headset becomes a peripheral to your phone, offer the following advantages over standalone systems:

High Performance

A cabled connection allows applications to run on powerful smartphone processors with display data running to an HMD, and camera data returning to a phone over a thin cable. Standalone HMDs are expected to be much lower performance to mitigate battery drain.

Low Cost

Tethered smartglasses contain only display, camera, sensors and minimal support electronics. No extra processor is needed.

Light Weight

Tethered smartglasses get their power from a phone, eliminating battery weight on a user’s head.

Long Battery Life

Again, tethered smartglasses get their power from a phone, so a large phone battery can power smartglasses. Typically, a phone’s screen will be powered down when smartglasses are enabled, so the power consumption is similar to a phone in use.

Large Base of Apps and Developers

Mobile AR software is already in rapid development on current smartphone hardware.

Easier User Setup and Use

AR/VR/MR apps are downloaded onto a phone and managed similarly to current apps.

Most Secure

Tethered smartglasses will leverage the security features built into phones.

ABOUT SPECTRA7 MICROSYSTEMS INC.

Spectra7 Microsystems Inc. is a high-performance analog semiconductor company delivering unprecedented bandwidth, speed and resolution to enable disruptive industrial design for leading electronics manufacturers in virtual reality, augmented reality, mixed reality, data centers and other connectivity markets. Spectra7 is based in San Jose, California with design centers in Markham, Ontario, Cork, Ireland, and Little Rock, Arkansas. For more information, please visit www.spectra7.com.

CAUTIONARY NOTES

Certain statements contained in this press release constitute “forward-looking statements”. All statements other than statements of historical fact contained in this press release, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to the risk factors discussed in the Company’s annual MD&A for the year ended December 31, 2016. Management provides forward-looking statements because it believes they provide useful information to investors when considering their investment objectives and cautions investors not to place undue reliance on forward-looking information. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this press release and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

References

1. Tim Merel, “The four ways of augmented reality (that Apple owns)” (18 July 2017), TechCrunch (online).
2. “After mixed year, mobile AR to drive 8 billion VR/AR market by 2021” (January 2017) Digi-Capital (online).
3. “Gartner Says Worldwide Sales of Smartphones Grew 7 Percent in the Fourth Quarter of 2016(15 February 2017) Gartner (online).
Spectra7 Microsystems Inc.
Sean Peasgood
Investor Relations
416-565-2805
ir@spectra7.com

Spectra7 Microsystems Inc.
Darren Ma
Chief Financial Officer
669-284-3170
pr@spectra7.com