Success story: 31 March 08
NextWindow Case Study
NextWindow is a privately owned Auckland based high tech company that designs and develops optical imaging touch screen technology which is used in high volume consumer PCs, interactive whiteboards, digital signage products and public information displays in malls, airports and retail, tourism and real estate markets.
It is the first company in the world to introduce optical touch screen technology to high volume markets by securing a global contract with Hewlett Packard (HP) to incorporate NextWindow technology into its TouchSmart PC.
The Foundation? for Research, Science and Technology’s investment of $560,000 through the Technology for Business Growth? scheme supported the technology development.
Technology and company background
NextWindow was established in 2000. It has 35 staff employed in New Zealand and at least half of them work on research and development. It also employs staff in the United States and Australia, and has resellers in the United Kingdom, Germany, Spain, Portugal, Norway, Italy, France, Saudi Arabia and Dubai in the Middle East, Singapore, Hong Kong, South Korea, Japan and Malaysia.
Its optical technology uses line scan imaging sensors to detect infrared lighting around the perimeter of a display. A blockage is detected when a finger or stylus touches the screen. At the heart of the system is a circuit board that receives signals from the cameras and runs the software. Only a light touch from a finger or pointer, rather than a mouse, is required and the technology is scaleable, from desktop use to large outdoor screens.
Since the launch of the iPhone and iPod Touch in 2007, touch has become increasingly mainstream, and new applications are being developed to utilise this new user interface. Multi-touch has become the new ‘must-have’ and NextWindow is leading the way with two-touch capability already available on all its devices.
The research and development, design and tooling are all completed in New Zealand. Volume products are contract manufactured in Thailand and China because New Zealand does not have a micro electronics industry capable of the specialist work. The IP is New Zealand owned.
Research and Development?
NextWindow always had a long term strategy to miniaturise its technology to make it applicable to volume markets such as desktop units, coining the phrase: ‘chip it and ship it’ to refer to its volume market approach.Chief Executive Al Monro says miniaturising the technology was a high risk project. He says the company would not have achieved the same outcomes, it would have taken longer and corners would have been cut without the Foundation investment of $560,000. Private shareholders also committed several million dollars to the project. The company already had systems in place to document costs, progress points and achievements which simplified the reporting required for both government and shareholder funding.
But his warning to others is that research and development (R&D) is likely to take longer than originally envisaged – the phrase ‘twice as much and twice as long’ applying to R&D projects, no matter how hard the team works. And there are always deviations along the way; some things are easier, some are harder and others have to be done differently to original plans.
The Foundation also provided $90,000 through its TIF Expert? programme which was used to bring in specialist advice on the technical disciplines required for setting up the manufacturing processes for the miniaturised technology.
When manufacturing lenses the size of a pinhead, NextWindow needed to ensure it could consistently achieve the same optical properties if mass production was to be successful. Mr Monro says NextWindow knew its product was a world leader but it had to prove it had the capability to scale up and provide quality and consistency for volume manufacturing.
New Zealand Trade and Enterprise provided assistance for market development and participation in exhibitions which has helped grow the business, and develop channels to market.
Growth strategies
The new miniaturisation technology takes NextWindow from the high value, low volume markets – selling only a small number of units at high prices – to high volume markets, such as retail point-of-sale (bars, restaurants, retailers), gaming machines, kiosks (airport check-in, photo kiosks), medical imaging devices, desktop computers, and with the new Microsoft Vista operating system, consumer PCs.“New Zealand can be proud that it is the pioneering country of optical technology in touch screens.
“This technology was invented here in New Zealand and now one of the biggest makers of consumer PCs in the world is using our technology in its products,” says Mr Monro.
The company has shifted relatively smoothly from a being start up to a world leader because it has always taken a big company approach, establishing reliable systems and processes.
NextWindow had formed an association with a division of HP during earlier years of big screen technology development and this provided an introduction when it moved to miniaturisation. NextWindow was selected to supply HP with optical touch screen technology for its TouchSmart PC, unveiled by Bill Gates at the Consumer Electronics Show in Las Vegas early 2007.
Mr Monro describes the HP contract as a huge achievement and one of the more significant technology deals done in New Zealand.
The Foundation considers NextWindow a textbook case of New Zealand innovation where the company has worked hard, persisted and been able to use Foundation investment as a catalyst to shift into a higher value market.
Returns to the Economy
Approximately 95 per cent of NextWindow products are exported. Revenues across all products in the past year (to 2008) were $7 million, a fourfold increase on the previous year. The company says its miniaturisation technology will generate in excess of $20 million in the 2008/09 year.Its success will also generate future jobs for highly skilled technical staff.
NextWindow is now turning its attention to the lucrative global interactive whiteboard market.
“The UK Government has mandated the introduction of interactive whiteboards into schools, and we can see that happening globally. We can supply the touch and annotation technology to interactive whiteboard manufacturers. At the moment we’re selling into Asia through our partners, but there is huge potential in the USA and Europe.
“The other big opportunity for us is in the area of digital signage. We have had some success domestically with Vodafone and others. We’re seeing good growth in Australia and the USA, and we’re talking to European integrators about utilising this touch technology for general purpose and special public information LCD displays,” says Mr Monro.