Describe briefly your main line of business and clarify the respective brands of APTX and APT Licensing.

The core business of APTX is the licensing of "apt-X" audio compression algorithms, software, and related intellectual property into audio system designs for professional applications and consumer electronics products. APTX is simply the new brand identity of this licensing-only business - known until recently as APT and formerly as Audio Processing Technology when founded 20 years ago. (APT Licensing Limited is just the registered name of the holding company formed in January 2009 when the broadcast hardware codec division - subsequently sold to Audemat - became a standalone subsidiary of the software licensing business).

How is business looking in the current economic circumstances? Do you have a sufficient spread of opportunities to offset current market trends?

I'm pleased to say

that APTX is bucking present economic trends thanks to the on-going switchover to digital broadcast and HD production, and insatiable consumer demand for digital entertainment - music, movies, and games. We are pursuing a large spread of opportunities at the moment largely because many manufacturers want to add value to their audio products by featuring higher quality sound. These opportunities are spread across a various fields - from stereo Bluetooth A2DP to Digital Wireless Microphones to 5.1 audio for HDTV. APTX is well placed to increase its market presence during this current downturn thanks to securing a number of high-profile design wins that will result in new products with apt-X compression inside coming to market from the middle of 2009.

Earlier this year APTX sold its hardware division. What was the thinking behind this and how will the proceeds be invested?

Yes, APTX sold its profitable hardware codec division to Audemat, the French broadcast equipment group, in March 2009. The logic behind this move was twofold:

The licensing and hardware divisions were really two very different businesses. The disposal of its hardware interests freed licensing to really focus on growing its customer base. APTX plans to achieve the same growth in licensing that the combined company achieved in the hardware business - that's 45% per annum over the last 4 years.

Secondly, the hardware business had matured to the point where it needed to be part of a larger group with a wider portfolio of products to attract the broadcasters. The Audio-over-IP hardware codec that Audemat-APT now offers complements the group's studio and transmitter products, creating a "one-stop shop".

You have partners and licensees for your technologies. Can you explain the difference in these relationships?

Partners are companies that assist us in licensing out apt-X or are companies that offer a platform for apt-X algorithms to run on, such as BlueCore5, a Bluetooth system-on-a-chip from CSR. Partners are "non-commercial" arrangements. On the other hand, licensees are companies that deploy apt-X in end-products and pay us a royalty per end-product sold.

Have there been any recent significant partner and/or licensee signings?

Yes, indeed. Two major global consumer audio brands, Sennheiser and CREATIVE, joined the ranks of apt-X licensees this year, plus several broadcast OEMs, including Germany's MAYAH and Qbit. APTX is also partnered with Bluetooth chip-smith CSR and radio module maker Bluegiga. So the scene is set for apt-X to star in the next "blockbuster" Bluetooth accessory - CD-quality wireless stereo headphones for mobiles and personal computers.

Are there any specific applications that you see as ripe for growth? And are they global opportunities or more localised opportunities?

There are two major opportunities that are primed for growth on a global scale:

Digital Wireless Microphones. With the on-going transition to digital TV across Europe, and the recent Digital Switch-Over in the USA, the UK's Ofcom and the US government's FCC are keen to auction cleared spectrum as part of the "Digital Dividend". These spectrum clearances will force existing UHF wireless microphone users to upgrade to new systems based on digital modulation and low-latency audio compression, so making more efficient use of scarce radio spectrum. APTX has a key technology - apt-X Live - that addresses the channel bandwidth constraints that will be forced upon wireless microphone systems designers. We have already licensed audio codec technology to SHURE, and we are also in the process of signing deals with another 2-3 wireless microphones makers.

Stereo Bluetooth A2DP. We have seen a huge rise in the use of Mono Bluetooth headsets over the last few years. This will now be repeated with wireless Stereo headsets as more and more devices - mobiles, PCs, TVs, games consoles - support Bluetooth's Advanced Audio Device Protocol, A2DP. APTX has the technology to improve the listener experience by applying the apt-X algorithm to A2DP. The audio quality of apt-X is demonstrably better than plain Bluetooth running SBC, the default codec. This technology has been adopted by Bluetooth accessory companies like Sennheiser and CREATIVE and is now finding its way into thousands of mobile devices. We see apt-X in Bluetooth A2DP as a huge growth area.

Will you be targeting any new markets in the near future?

With apt-X for broadcast studio-to-transmitter links, wireless microphones, and stereo Bluetooth, APTX is pretty busy at the moment. We have seen requests for our technology in high-performance Audio-over-IP for on-line gaming and we are exploring that market at the moment.  Beyond that, we don't have any immediate plans to target any more markets.

APTX recently announced apt-X Scalable. Can you explain this technology and its potential applications? What is the timescale for its introduction?

Yes, APTX announced this exciting development - a new type of adaptive, scalable audio codec - at the AES Convention in Munich this year. It's the results of many years of R&D. This technology is aimed at portable device markets where aspects such as battery life, compression ratio, and wireless transmission errors are all taken into consideration by the encoder to produce audio of the highest possible quality, subject to the prevailing environmental conditions. It will scale and adapt automatically in terms of complexity, bit-rate and power consumption to maintain the wireless transmission for longer - and at higher quality than conventional algorithms. This is the "Holy Grail" of audio coding. It takes the best attributes from all of our codecs and brings them together in a dynamically scalable algorithm that will work without any user set-up or adjustments.

What is your best selling product?

Audio compression algorithms take a long time to bed down. Our best-selling technology is Enhanced apt-X, one we developed a decade ago. However as digital wireless microphones start hitting the stage we can project that apt-X Live - 8:1 compression with sub-1.9ms latency - will become our next best-seller.

What are the biggest challenges facing APTX in near and medium term future?

Our biggest challenge is to fully capitalise on the opportunities that are coming our way. We have a small but dedicated team at the moment, and have to apportion a lot of work and travel among us as we grow.