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Licensing proving a good line of trade for Penpower

Penpower Technology Ltd (蒙恬科技), a provider of handwriting and voice recognition technologies as well as biometric solutions, is expecting profits to rise this year from licensing its core technologies, an official said yesterday.

"We expect to double our net income this year, as more partners are going for our core tech-nologies," Tsay Yih-tay (蔡義泰), chairman and founder of Penpower, told reporters.

The company is expected to report around NT$2 in earnings per share this year, up from last year's NT$1.01, he said.

One of the profit boosters is licensing of key recognition technologies, he said.

One major milestone in this segment is Penpower's alliance with IC chip designer Elan Microelectronics Corp (義隆電子) to launch a microcontroller unit (MCU) that allows gadgets to support handwriting and optical-character recognition.

The chips entered the market in May last year when Inventec Appliances Corp (英華達) put the chip in its OKWAP A236 mobile phone.

This year, Taiwanese cellphone vendor Dopod International Corp (多普達) and Chinese handset makers like Lenovo Group Ltd (聯想) and Longcheer Holdings Ltd (龍旗) have also started to use the MCUs.

These MCU-embedded phones allow users to write figures or characters on the touch screens, and take pictures of business cards with built-in cameras as the phones can automatically scan and store the contact data.

"MCUs will help raise our revenues in the second half of the year as more cellphone firms pick up the chips," Tsay said, adding that Japanese makers plan to start using the chips on remote controls for digital home entertainment networks.

The licensing business could account for 20 percent of overall revenues this year, up from 10 percent last year, Tsay said.

Brandname products, including its popular business card scanner WorldCard (名片王) which uses the optical-character recognition solution, will contribute 80 percent to revenues this year, he said.

Worldcards have proven popular in the Greater China region, the US, Europe and Japan, he said.

Founded in 1991 with a focus on Chinese handwriting recognition technology, Penpower has since ventured into speech and optical-character recognition, as well as the security surveillance industry with biometric solutions such as facial recognition.

Penpower's shares closed down 2.1 percent at NT$18.8 on the Taiwan Stock Exchange yesterday.
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