Initiating Coverage of Max Sound Corp. (MAXD) with Speculative Buy $2.50 2014 Target
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Initiating Coverage of Max Sound Corp. (MAXD) with Speculative Buy $2.50 Target
“Working with Qualcomm Technologies has opened doors to big companies in this space whose attention we wouldn’t normally get. As a result of the Uplinq conference alone we’ve become engaged with over a dozen companies that can see the value of having MAX•D audio technology in their devices.”
- John Blaisure, CEO, Max Sound Corporation
With one billion+ 3G and 4G smart phones/tablets to be sold next year with Qualcomm Snapdragon chips, Max Sound is now fully integrated into Qualcomm’s Hexagon Digital Signal Processor (DSP) and poised to make major wins into at least 12 major smartphone/tablet OEMs.
At 25-40 cents per chip in license fees…what digital OEM would NOT want to deliver CD quality high def audio over their phone or tablet…especially voice! And with everyone at war with the Apple iPhone…who would NOT want to provide high def sound against the crappy sound from iPhone/iPad…(crappy is a scientific term meaning really lousy!).
Audio in phones has not improved in 25 years…NOW mobile device OEMs have a simple and low cost way to deliver TRUE high def sound anywhere—automobiles too!
Licensing possibilities, automobiles and new relationships
Qualcomm Technologies was impressed by the audio experience not only in voice, but also in music and movies on mobile devices.
MAX•D is not limited to mobile devices; it can run anywhere there is a processor and RAM. “Think about audio in an automobile,” notes Lloyd Trammell, CTO of Max Sound. “In a luxury car, it can cost thousands of dollars to upgrade the audio in the dashboard head unit and speakers. For a manufacturer whose audio runs on Snapdragon, we’ve taken something that is usually an expensive hardware upgrade and turned it into a simple software upgrade in the hundreds of dollars range.”
“At Uplinq this year, we demonstrated that MAX•D makes a clearly audible difference,” says MaxD CEO John Blaisure. We also showed Qualcomm Technologies’ OEM customers that it’s possible to brand the technology, chip and company behind that difference and, even more important, measure consumer response to that difference. We’ve proved to the industry that we can educate consumers about audio on the device and create a consumer buying decision around it.”
Background: Max Sound makes MAX•D, an audio process that improves sound quality in music, movies and games without increasing file size. From a relatively small 128kbps MP3, MAX•D can reproduce the dynamic range and harmonic content of CD-quality audio by analyzing and resynthesizing the bits discarded during compression. 45+ patents are pending on MAX•D technology worldwide.
MAX•D differs from other technologies in that it not only processes all audio on the device, but also lets the user modify parameters while the audio streams are open and running. This real-time manipulation of parameters is more complex than simply opening an audio stream and choosing a profile at startup. To accommodate their model, Max Sound has taken advantage of three particular features of the Hexagon architecture:
· Dynamic loading – DSP customization often involves making Android system changes, building all components of Android and the Elite Framework on the development computer, then flashing the device. Developing for Hexagon, Max Sound still makes a few changes to Android, but Hexagon’s dynamic loading enables them to compile a module of the MAX•D code that they can simply copy to the device for testing and eventually for production. This saves large chunks of compile time and is a more elegant way to develop.
· Audio Post-Processing Interface (APPI) – Using APPI, Max Sound built a wrapper around its MAX•D algorithm, making a common object post-processing (COPP) module that runs at the device level.
· amdb_mgr – This Android migration app puts the code in the dynamic modules into the topology on Hexagon and starts running it.
Running their first working proof of concept on the Snapdragon S4 Plus MSM8960 Mobile Development Platform/Smartphone (MDP/S), Max Sound found that the sound quality and performance were just what they wanted. They continued with plans to test on the newerSnapdragon 800 MDP/Tablet.
Key Takeaway: Any Qualcomm’s major chip buyers—Samsung, LG, Motorola, ZTE, HTC, Huawei, Sony, Nokia—who want to deliver a 100% BETTER audio experience to their customers and differentiate against Apple—HAVE to license the MAX•D High Def audio technology. With MaxD, a complex hardware upgrade becomes a simple software upgrade
The license fee potential in the billion unit Snapdragon chip world for MAXD is certainly in the $100 million a year range…and the fee for exclusive licensing of the technology should be $50 million+.
Observe existing Qualcomm chip buyers https://developer.qualcomm.com/devices
Learn more about Max Sound in our initial report and our latest exclusive interview with CEO John Blaisure.
Source: MarketWatch
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Founder and Editor-in-Chief for NBTEquitiesResearch.com. Contributor and Anchor for the Fox News Channel and Fox Business Network 2000-2013. Chairman & CEO of NBT Group, Inc., a boutique private capital investment bank and investor relations organization.
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