Inside Secure CEO: Greek Financial Crisis Delayed IPO

Jun 28 2011

Inside Secure CEO Rémy de Tonnac said the chip supplier’s decision to postpone its planned initial public offering was based solely on the financial crisis in Greece and the uncertainty it is creating on world markets.

Inside, one of only two chip vendors believed to be supplying NFC chips in volume, cancelled a press conference today on its IPO. It had announced its intention to go public in May.

De Tonnac told NFC Times that Inside’s financial advisors recommended the delay, noting that other planned IPOs in Europe have been put on hold recently as Eurozone countries deal with prospects of wider financial turmoil. De Tonnac contends the delay has nothing to do with the NFC market or last week’s profit warning by Research in Motion, a major customer for Inside’s NFC chips.

“More than 50% of IPOs have pulled out, including some IPOs that were supposed to be easy,” he said. “This kind of sign is (that) the market window is closed, (and there) is no point trying to go against the tide. We have time, we have cash.”

He said market conditions will determine when the company reschedules the IPO.

NFC Times has reported that Inside has received orders for as many as 25 million chips from RIM, which has said that eventually most of its phone models will be NFC-enabled. It has already announced two related NFC models, the Bold 9900 and Bold 9930.

Inside in May confirmed for the first time that it was shipping chips to RIM, as part of a backlog of $22 million in NFC chip orders as of the end of the first quarter of 2011.

RIM last week issued a profit warning, lowering its sales and earnings projections for the year.

“This is not what was creating the concern, even if RIM is losing a bit of ground,” de Tonnac said of the IPO delay. “They have a strong commitment to NFC.”

Inside competes directly with NXP Semiconductors for NFC chip business. NXP has an edge since it has won business up until now supplying chips for models based on the popular Android platform, including NFC phones planned by Samsung Electronics and Sony Ericsson. Both NXP and Inside claim China-based handset maker ZTE as a customer. Update: Inside announced in late June that its ZTE phones would support Android, unlike previously reported. End update.

De Tonnac has said that even if NXP keeps the primary NFC business for many of the Android handset makers, they will need a second source of supply when volumes ramp up.

Besides NFC, Inside is targeting the market for dual-interface EMV cards, along with digital security, including access control, ID cards and machine-to-machine applications. 

The company recorded $78.1 million in sales  in 2010, including fourth-quarter revenue from Atmel Corp.’s smart card unit, which it purchased. It had a net loss of $7.9 million for the year.

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