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Jan. 6, 2003 — MEMS-directed lasers may sound complicated, but not if you compare them to everyday items, such as tires.
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“In a car for example, you have four tires,” explained Saeid Aramideh, vice president of product management for Iolon Inc. “If every tire was tuned separately, you’d have to carry four spares.”
In this instance, the car is a long haul optical transmission network, and the tires are the tunable lasers that help move traffic. Iolon’s tunable lasers use MEMS actuators to change frequencies and control costs for margin-challenged carriers.
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“The value proposition is you don’t have to purchase 240” or one laser device for each channel in a data network. “You might need a couple of handfuls, like 10,” Aramideh said.
That means investing in 10 of Iolon’s tunable lasers at about $55,000 will be about 90 percent less costly than keeping a $50,000 spare on hand for each of 240 channels.
San Jose-based Iolon is a July 2000 spinoff of Seagate Technology. In little more than two years, Iolon has raised more than $85 million in venture funding from Kleiner Perkins Caufield & Byers, Bowman Capital, Seagate and Corning Innovation Ventures. The total includes about $17 million from roughly the same group last April.
The early work on Iolon’s MEMS began several years ago in the development of high capacity data storage products, but the company is now focused on telecom markets.
In September, Iolon inked a sourcing agreement with Lucent Technologies for Iolon’s Apollo line of external cavity lasers (ECLs). Lucent will use the lasers in its DWDM (dense wave division multiplexing) optical networking system, LambdaXtreme.
Apollo lasers allow LambdaXtreme to cover the entire frequency spectrum with eight tunable units instead of 128 “fixed” units.
Aramideh spent a decade with Nortel Networks in a variety of development and marketing management positions in the company’s Networks Fiber Optics Transmission Group, but said he couldn’t comment on the possibility that Nortel would be another design win for Iolon.
Iolon’s MEMS technology has potential uses beyond telecom, including testing and measurement and medical applications.
In he meantime, though, Iolon can only anticipate when carriers will open their wallets. “The timing for that is hard to say,” Aramideh said. “Talk is the second half of next year.”
If not longer. “The whole optical network space is in question,” said Marlene Bourne, senior MEMS analyst for at In-Stat/MDR. Iolon is carving out its niche in serving long-haul networks with its MEMS product, unlike Bandwidth9, which has focused on metro markets.
Bourne said it’s tough to tell whether the optical market has bottomed out yet, and the telecom recovery once thought to be on line for 2003 may not occur until 2004 or 2005. The key factor for companies like Iolon is to be “very prudent about their burn rate,” Bourne said. “They understand the opportunity is not a near-term one.”
Aramideh said he doesn’t foresee Iolon needing any more venture funding. “We have enough cash to weather the storm,” he said.
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Company file: Iolon Inc.
(last updated Jan. 6, 2003)
Company
Iolon Inc.
Headquarters
1870 Lundy Ave.
San Jose, CA 95131
History
Iolon was spun off from Seagate Technology in June 2000 and supported with venture capital financing. John Clark, president and chief executive, joined the company in November 2000. Iolon has garnered several awards in its short history:
Industry
Fiber optic components
Employees
114
Small tech-related products and services
The company develops tunable optical components, including lasers, filters, switches and receivers. Their components are used for wavelength division multiplexing in long-haul advanced optical networks. Their MEMS-based flagship product, the Apollo miniature external cavity laser (ECS), can adjust network communication frequencies, saving carriers a great deal in maintenance costs. Iolon is targeting telecom markets, though its technology may also be relevant to testing and measurement applications, as well as medical environments.
Investment history
The company has raised more than $85 million to date from more than 20 investors, including nearly $17 million in combined capital and credit in an April 2002 round closing. Key participants in prior rounds (July 2000 and February 2001) include:
Selected strategic partners and customers
Barriers to market
Iolon’s market space, optical networking, is in a slump. Some analysts project movement in this niche by the latter half of 2003, while others say the market will not improve for a year or two beyond that.
Competitors
Goals
Iolon wants to add to its product line enabling tunable laser technology to realize its “full value proposition at the network level,” said Saeid Aramideh, vice president of product management. “Applications drive the hardware, and the hardware enables different applications, like the relationship between Microsoft and Intel,” for example.
Why they’re in small tech
With MEMS, tunable lasers are a best fit solution for optical transmission networks. “Small is good, low power is good,” Aramideh said. “In transmission networks, there’s a premium for space and big power consumption.”
What keeps them up at night
“A sustainable carrier spending in building and expanding new optical networking infrastructure is the key concern for all of us,” Aramideh said. “Unless carriers start spending again the whole optical value chain remains broken.”
Recent articles
Iolon, Lucent link on LambdaXtreme
Iolon secures $7.6 million in funding
New lasers tuned with MEMS may make nets more efficient
Patents
Balanced microdevice and rotary electrostatic microactuator use therewith
Electrostatic microactuator with offset and/or inclined comb drive fingers
Contact
— Research by Gretchen McNeely