A better 3-D TV experience, courtesy of University of British Columbia spinoff

Every week Techvibes republishes an article (or two) from Business in Vancouver. This article was originally published in issue #1075 – June 8 – 14, 2010.

Zecotek Photonics Inc. (TSX-V:ZMS; Frankfurt:W1I.F) has no problem questioning the quality of existing three-dimensional televisions.

The fact that there have been some reports of dizziness among 3-D TV watchers and that researchers are debating the potential effects of existing 3-D television viewing on the human eye is part of a Vancouver company’s pitch as it courts major manufacturers for its new 3-D television technology.

And while most 3-D TVs have limited viewing range and often require viewers to wear special glasses, Zecotek’s system doesn’t require glasses and uses 90 different images to create a viewing range that is far larger than any 3-D TV currently on the market.

Zecotek’s 3-D also tackles the problematic occlusion effect, which keeps parts of 3-D images hidden to the viewer, even if he or she moves side to side in order to see around the front of the image.

The company, which was spun out of the University of British Columbia, generated about $350,000 in revenue in 2009, through the sale of photo detectors and laser equipment.

But its $35 million deficit reflects the capital and hopes that the company has poured into development of its 3-D TV.

Last week, A.F. Zerrouk, Zecotek’s president and CEO, demoed the Zecotek’s technology for BIV and explained its go-to market strategy.

When will we see Zecotek’s technology in stores?

First and foremost I want to say that there is absolutely no rush to get 3-D displays into the home. I think that having a 3-D TV is something that is not a question of whether there will be, it’s a question of when. [But] in less than a year, you’ll have one of these displays seen by a great number of the population.

What’s your commercialization strategy?

As an R& D corporation, we are not manufacturers and we are not marketers. So we have identified a few candidates. These are major [original equipment manufactueres] with whom we will partner to take our display to market.

They want to take it swiftly to the market, but it’s more likely to address more of the vertical niche markets before we go full-stage into the consumer market.

If not the consumer, then who is your initial target market?

We will most probably start with more specialized markets.

For example, medical applications, engineering applications, architectural design, artistic design, digital signage.

Once we have made the most out of those markets we’ll go down through to the consumer market because components will be much cheaper, the experience of 3-D will be more accepted.

Everything has its own phases. Black-and-white [TV] came and then we perfected black-and-white 2-D TVs. And then the colour TV came, and people preferred having a black-and-white rather than a colour TV because the colours weren’t bright enough and so forth.

So things do take time, but for us, we’re ready now for the more vertical specialized niche markets.

Are you raising capital?

Not initially because, with the types of partnership we are working on, financing would mostly come from our partners.

How much will your screens cost?

It all depends on the application. Our system is very flexible and adaptable. I can make a deeper picture image for one application with, let’s say, a narrower angle of view. Or I can have a larger angle of view and less depth. So depending on the application, there will be a tack price on it.

The price we put on it would not reflect the actual costs of the components of the system itself. Let’s say the system costs [Zecotek] $1,000 [to make]. We might actually decide to sell it for $50,000. That’s because there is no competition to our system. So if I were to interface it with, lets say, a $2 million or $3 million machine like an [MRI scanner], I think in that case it can command $50,000.

You decrease the price if you have competition but you can command the price if you are the only one. If I was to go to the consumer market, then I would reduce my price to be more affordable – a few hundred dollars or $1,000.

Are there are other applications for your IP?

Our 3-D system is a [single] station. We can capitalize on the components and software to sell them as stand-alone technologies, but for the time being it makes better sense for us to keep all that in one single box before we start selling the underlying technology to competitors.

Are you impressed with any of the competitor’s technologies?

Not a single one. Some of the OEMs that we are hoping to enter into partnership with have their own 3-D display programs, but they have realized that this is the way to go.

We’re well-protected with our patents. We have not gone to the market and we have not exhibited. We wanted to understand the dynamics of the market first to be able to position ourselves first.

We also wanted to be shielded from the negative comments that are [being directed to] the industry. 3-D stereoscopic displays and other auto-stereoscopic [without glasses] displays have limited amounts of view. We wanted to see how all that progresses and overlaps. And then hopefully the wave will be created, and we will ride the wave.