‘No Update’ on Samsung Talks for Next-Gen Phones, So Dolby Touts Fire Phone Win
Dolby CEO Kevin Yeaman touted the company’s relationship with Amazon and the Fire Phone on its Q3 earnings call Thursday, after noting there was no update on talks between Dolby and Samsung for mobile devices. On its previous earnings call (CED May 1 p3), Dolby Chief Financial Officer Lewis Chew scaled back mobile licensing revenue projections by 10 percent for the quarter ending June 27, citing Dolby’s omission from Samsung’s latest smartphone, the S5, which began shipping in April. Yeaman said then that Dolby still had an opportunity to grow business with Samsung and “everything is still on the table,” while calling the absence of Dolby Digital Plus on the Galaxy S5 “disappointing."
On the most recent call, Yeaman referred to market indications that sound “and our technology in particular” can be a differentiating factor in the mobile world. He talked up an existing relationship with Amazon for audio on Kindle Fire tablets and Fire TV and the latest agreement for the Fire Phone. “Within the Amazon content ecosystem, we are seeing more TV and movie content in Dolby formats,” Yeaman said. He said a game released during the current quarter, “Angry Birds Star Wars II” uses Dolby audio.
Mobile device revenue was down 20 percent sequentially in Q3 at Dolby, to about 13 percent of total revenue for the quarter, Chew said. But it was “a little more revenue than expected” on sales of older Samsung phone models that were available before the Galaxy S5. Year-over-year, Dolby’s Q3 mobile revenue was up about 20 percent, due to tablet unit growth and higher mobile phone revenue from “a variety of customers,” Chew said. Overall for Q3, Dolby had revenue of $223.4 million, compared to $207.1 million in the year-ago quarter.
In its broadcast segment, Dolby continues to focus on extending its reach beyond North America and Europe to emerging markets where opportunities exist as countries transition to digital broadcasting. “Robust content ecosystems,” are developing in China and India, Yeaman said, with two-thirds of HD channels in China broadcast in Dolby. The company is “gaining traction” with OEMs, Yeaman said, with Chinese TV maker Xiaomi launching a TV during the quarter with “the full suite of Dolby technologies,” he said. And Dolby is making progress in other parts of the world, including the Philippines and Vietnam, where satellite operators beamed with Dolby in Q3, he said.
In the U.S., TVs with Dolby Vision, the company’s “end-to-end” solution for improving the dynamic range of TVs and the signals going through them, will be shipping by year-end, Yeaman said, saying Dolby has received “great support from the content community.”