Teaching Power Lines New Tricks

Arkados semiconductors turn electrical wires into sound and image transmittersPISCATAWAY – With little fanfare, a Piscataway company called Arkados is working with some of the biggest names in consumer electronics to find ways to carry everything from television shows to Internet connections over electric power lines. Such systems can link up the TVs, computers and audio systems inside households and deliver broadband services to homes.

“Imagine buying a small box with an iPod docking station and plugging into the power outlet,” says Oleg Loginov, CEO of Arkados. “Then you can have speakers separately plugged into other outlets at the other end of the house. When you play music from your iPod, it plays through all of the speakers in complete synchronicity.”

Arkados is a founding member of the HomePlug Powerline Alliance, a consortium of 13 leading companies whose goal is to set industry standards for the use of electric wires and wall plugs to link electronics devices to one another and to the Internet. Member companies include Sony, Motorola, Intel, Sharp and Samsung.

Arkados produces semiconductor chips that enable computers and home entertainment devices to share audio and visual content over electric lines. The chips are made in Japan. The company is a unit of the Arkados Group, whose stock traded for 20 cents a share on the over-the-counter market last week.

Arkados has 15 employees and reported a net loss of $4 million on revenue of $112,094 for the fiscal year that ended in May. That compares with a loss of $7 million on revenue of $832,910 during the previous fiscal year.

In San Francisco last month, Loginov was part of a panel discussion exploring the possibilities of broadband over power lines. His company’s AI-1100 System-on-Chip can be incorporated into a networking system to transmit media in the home.

“Imagine watching a recorded episode of ‘Grey’s Anatomy,’ ” says Loginov, who was born in Ukraine and received a master’s degree in electrical engineering there. “You can start watching it in your bedroom, pause your TV and continue to watch on another TV in the kitchen from exactly the point you stopped the program.

“HomePlug is enjoying great success in Europe,” says Loginov, who expects domestic use to rapidly expand. “If you look at guys like Comcast, Earthlink and others, they’re deploying the technology in conjunction with existing cable modems.”

HomePlug systems work by translating digital signals carried over power lines into images, data and sound. The HomePlug consortium has developed, or is developing, four types of systems:

• HomePlug 1.0 connects devices to allow digital content such as MP3 to be delivered to audio systems around the home. An advanced version distributes video as well.

• HomePlug AV has greater bandwidth to allow the in-home distribution of high-definition television shows.

• HomePlug Command and Control systems will create so-called smart homes in which computers and appliances can communicate. Uses could include receiving alerts on television screens when a refrigerator malfunctions.

• HomePlug BPL (Broadband over Power Lines) uses power lines to bring broadband into homes. This enables power companies to deliver video programming.

BPL systems have been under development for much of this decade, but they still are relatively scarce. According to Research and Markets, an Irish research firm, there are currently about 170,000 subscribers worldwide.

In Texas, power company TXU Electric Delivery is teaming up with Maryland-based Current Communications to deliver BPL to about 2 million homes in the Dallas metropolitan area by the end of 2008.

Meanwhile, Arkados says customers have shown the most interest in the in-home networking of Internet radio and other audio systems and networked video surveillance systems.

The company recently displayed its technology for such applications at an event in San Francisco.

Arkados was created in 2004 through the merger of Enikia in Piscataway with a company called Miletos. Loginov had been president of Enikia, whose intellectual property provided the basis for Arkados’ development efforts.

“HomePlug devices today consist mostly of adapter-based products,” says Andreas “Andy” H. Melder, senior vice president of Intellon, a Florida-based provider of semiconductors for the HomePlug market. The adapters connect to the Ethernet ports on computers and other electronic devices and network them together through the power grid in the home.

“We are shipping well over one million units of HomePlug chips per quarter now,” says Melder. He says Intellon has 110 employees and will generate from $32 million to $35 million in revenue this year.

“You will shortly see HomePlug AV adapters at retailers in the U.S.,” he adds. “You can contemplate that by late next year products like television sets and displays will have HomePlug AV embedded so they can connect with one another simply by being plugged in.”

E–mail to jpruth@njbiz.com

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