‘Serendipity’ is not a word much used by engineers, but it certainly has a nice ring to it. To Henry Azima its meaning – ‘to find interesting or valuable things by chance’ – captures the essence of NXT, the audio technology company he has been instrumental in creating.
Azima, the company’s chief technology officer, has spent the past decade turning the chance discovery of a technical curiosity from the backwaters of military research into what he and his fellow engineers believe will be a commercial monster. NXT’s technology is all about flat speakers – the production of high-quality audio sound from flat panels of material. Azima hopes that these lightweight, space-saving audio systems will spread like wildfire across the electronics landscape, and will eventually be used in everything from mobile phones to car audio systems, and information kiosks to public address systems.
‘Serendipity brought us to this technology,’ said Azima. ‘Now we are at a watershed. Important work is going on across many industries and we hope to see some rewards for our efforts.’
If the first few weeks of the new year are anything to go by, Azima is in for a busy 2004. January brought a salvo of good news for London-based NXT in the form of product launches by three of its licensees, all incorporating its flat-panel systems.
Japanese consumer electronics giant NEC produced the first laptop to feature NXT’s SoundVu system, turning the computer’s screen into a speaker. Two days later audio equipment specialist KEF launched a surround-sound home cinema system equipped with NXT’s flat panels. Philips completed NXT’s happy new year by unveiling its first fully fledged range of NXT-enabled flat-screen televisions.
Most readers of The Engineer are unlikely to be rushing out to buy one of the new TVs – the cheapest model in the range costs £3,200 – but for NXT and Azima their very existence is a welcome late Christmas present.
Every time a new product rolls out of the factory with its audio components based on NXT’s system, it brings Azima’s goal a step closer. ‘We set out to create a new standard in new industries,’ he said. Azima is using standard in the sense of ‘the norm’ rather than ‘the best’ — though after more than $75m (£41m) worth of investment you would expect NXT’s systems to work pretty effectively as well.
Its base technology, distributed-mode loudspeakers (DML), uses tiny transducers to create controlled vibrations across a flat surface. The transducers, called exciters, perform according to the size, shape and density of the panel to create a high-quality acoustic field.
Unlike conventional speakers, which use a diaphragm to push a narrow beam of sound in one direction, the NXT system delivers enough power to spread sound waves evenly across the panel. This means the surface can be any shape or size, plus a wide range of materials can double up as loudspeakers as well as performing their primary role — the screen of the laptop being a classic example.
Azima and his elder brother Farad – who retired as NXT’s chairman in 2001 – are untypical of hi-tech start-up entrepreneurs, not least because they had more to lose than most.
By 1994, when they began work in earnest on developing flat-panel technology, the Azimas were already doing very nicely thanks to their first venture, the UK hi-fi specialist Mission Electronics.
Henry Azima joined Mission in 1980 after graduating in electronics and control engineering from Surrey University. His elder brother had founded Mission three years earlier to develop a range of high-quality, mass-market hi-fi equipment. ‘I initially got into the audio business because I wanted to work with Farad,’ admitted Azima. ‘But I soon became very passionate about what we were doing.’
The brothers built Mission into one of the world’s most successful speaker manufacturers. During the next 15 years it merged with Wharfedale, another major speaker company, and bought Quad, one of the most famous names in audio technology.
By 1994 Mission had changed its name to Verity Group, joined the stock exchange and looked destined to spend the rest of its days as a highly successful supplier of equipment to the world’s hi-fi enthusiasts.
That was not, however, how things turned out. In the early 1990s Azima and his colleagues stumbled across an obscure patent filed by the MoD’s Defence Evaluation and Research Agency (Dera), now Qinetiq. Dera had developed the rudiments of a system that could turn flat surfaces into loudspeakers, but had little idea how to turn the base technology into a commercial product.
Azima, however, was intrigued by the possibilities. Verity negotiated a development licence and set up a full-scale R&D centre headed by Azima to research possible applications. ‘We decided it had potential and thought we would see what we could do with it,’ said Azima.
The company soon decided that the Dera technology had the potential to revolutionise the type of conventional loudspeakers it had been building for the past two decades, and in some instances replace them. Most excitingly, from Azima’s point of view, it offered the chance to enter the new markets NXT is now banging down the doors of.
That the technology had promise was not in doubt. The big question for Verity was how to proceed commercially. ‘Probably the only role model available to us, at least in the audio industry, was Dolby,’ said Azima.
Since the 1970s Dolby Laboratories had become a massive global brand name by licensing signal-processing technology to ‘clean up’ reproduced sound. Millions of electronic items sported the US company’s distinctive Double-D logo, which became as recognisable to consumers as those of the equipment manufacturers themselves. Dolby receives a royalty fee every time a device bearing its logo is sold.
‘We were at a crossroads,’ said Azima. ‘We could have kept the technology in our own group and set out to use it to make fabulous sound. In fact it would have been much more cosy to keep it in-house.’
Under this option, the Dera technology would have been incorporated into Verity’s own products. Mission and its other brands would have ended up with flatter, better-sounding speakers. The hi-fi buffs would have cooed, extra profits would have been made and the risks involved would have been small.
Instead, the company decided its technology had the potential to emulate, or even exceed, the success of Dolby and it set out to woo industries of which it knew little, and which would certainly have never heard of flat-panel speakers. Wharfedale, Quad and finally Mission were sold to leave the newly renamed NXT as a pure technology-development operation.
‘It was certainly more of a risk for the company, and a pretty brave decision, I think,’ said Azima. Brave for the brothers and, some would say, braver still for those who invested the money to develop the technology. ‘We have always been quite open with our shareholders that we are a risky business,’ he said.
‘The upfront investment is quite high, and whether you can achieve the level you want to is something nobody can say.’
Quite apart from the commercial risks, NXT has more reason than most to fear infringements of its intellectual property. ‘We were quite paranoid when we started,’ admitted Azima. ‘When you put your future into a piece of paper called a patent, you fear some weird guy is going to produce something written 50 years ago and use it to bring you down. It is fair to say that we have had some sleepless nights.’
NXT has tried to ensure a good night’s rest through a flurry of patents, but Azima fears the company will have to be more, not less vigilant, as more products appear on the market. ‘We think that as we become more successful we will see more infringers. As the property becomes more valuable, people will make a bigger effort to muscle in,’ he said.
Azima will be happy to cope with the problems of success. Hard work and calculated risk taking – not forgetting serendipity – have brought NXT to the brink of where it wants to be. Now the cold, unforgiving hand of the mass market will decide the rest.