BBE Sound Signs Licensing Pact With AIWA for Signal-Processing Technology

BBE Sound of Huntington Beach said Thursday that it has signed a licensing agreement with AIWA Co. of Japan to incorporate BBE sound-enhancing technology in AIWA home audio products.

The contract is BBE’s first licensing pact, and it could result in an increase of BBE annual revenue to as much as $20 million, said John McLaren, chairman of the privately held firm. BBE sales totaled about $3 million last year.

McLaren predicted that other audio manufacturers will eventually license BBE signal-processing technology.

The BBE system uses electronic components to realign musical frequencies to resemble a more natural state. Much of the original alignment is changed with amplification.

“A lot of people in the industry feel that the BBE system could become as commonplace as Dolby sound or stereophonic sound,” McLaren said. “Within the next year or so, the BBE system could become pretty much the industry standard.”

McLaren said that his firm is negotiating licensing agreements with several other Japanese consumer electronics firms, but he declined to identify them.

Components, Microchips

BBE now sells its signal processors as separate components that can be connected to receivers, amplifiers, compact disc players or other audio components. The firm also sells microchips containing the signal-processing circuitry.

In addition to consumer electronics, McLaren said, the system is also used by others such as radio stations (including KZLA and KTWZ in Los Angeles), recording studios, discotheques and rock bands.

Under the AIWA licensing agreement, AIWA will pay a royalty to BBE for the right to use the technology in its audio products.

The BBE system has the potential to sweep the industry if it can establish a distinct identity, said Bill Matthies, who founded the firm with McLaren four years ago. Matthies now heads the Varity Group, a consumer electronics consulting firm he founded in Diamond Bar.

“BBE is a different kind of signal processor, and there are many of them out on the market,” Matthies said. “They’ve got to create a marketing niche.”

BBE has 12 employees at its Huntington Beach headquarters and 60 at its product assembly plant in Alhambra.