Location, Location, Location: Hemisphere GNSS and UniStrong’s New Role as a Global Company
The 2018 UniStrong Global Partner Summit, held in Shenzhen, China, was a well-attended and happy event, as Beijing UniStrong Science & Technology Co., Ltd. celebrated explosive revenue growth—from USD $77 million to $370 million in just four years; validating the substantial risk and investment UniStrong used to become a new, truly global, player in the high-precision GNSS industry. The event was also a major milestone for privately held company Hemisphere GNSS, purchased by UniStrong in early 2013. At time of purchase, both UniStrong and Hemisphere were placing a big bet with big stakes—the goal was to form a new GNSS powerhouse and enter the global market as a company controlling all aspects of precision and satellite-based location, from engineering talent and intellectual property to chip production and finished product manufacturing. This was an audacious move; in a sector dominated by technology giants Trimble from Sunnyvale, CA, USA or Hexagon AB from Stockholm, Sweden.
Five years later, both UniStrong and Hemisphere GNSS are able to look at their successful growth and astounding GNSS innovation, and confidently declare themselves major players in a key technology sector of the 2000s. Recent innovations such as autonomous cars and vessels and self-guided machines in agriculture, construction, and mining, need precision GPS performance.
Leaving Home and Moving into a Bigger Place
In January 2013, Hemisphere GNSS was created when UniStrong purchased the precision products business, and related GNSS technology and intellectual property, from Hemisphere GPS, Inc. Until then, Hemisphere GPS had been a company with primarily three areas of focus: machine-guided agricultural operations, marine vessels, and OEM precision GNSS technology. For obvious reasons, these areas were complementary for many years as Hemisphere GPS pioneered precise location, optimized for agricultural operations, as well as Vector™ technology with chips and software designed for this purpose. By 2012, each division of Hemisphere GPS progressed so rapidly, that they began to resemble two different companies. Industry publication GPS World reported at the time, “Basically, the old Hemisphere had been challenged with limited resources spread over too many programs, with profitability suffering. So, back almost a year ago, a decision was taken to focus on agriculture and look at options for its non-core (GNSS) business.”
Consequently, the Hemisphere GPS Board of Directors made the decision to find the right buyer for its GNSS development business. A short list of prospects was identified and approached, and UniStrong quickly emerged as a top candidate, for several reasons:
- UniStrong, established in 1994, was already a major GNSS firm in China. Though not an innovator in this sector, the eight-branch firm, with more than 1,000 employees and two-world class manufacturing facilities, was noted for high-end handhelds with GPS, GLONASS, and BeiDou capacity, used for navigation and high-accuracy surveying.
- UniStrong already had a relationship with Hemisphere GPS going back to 1997 when UniStrong was appointed as the sole Hemisphere GPS distributor in China. From Hemisphere GPS’ point of view, this made negotiations concerning licensing and markets relatively straightforward, and consequently UniStrong was an excellent strategic fit.
- UniStrong made it clear that they were not interested in purchasing Hemisphere GNSS merely to form a bigger Chinese firm or use the technology to bolster business in China. Rather, UniStrong viewed the purchase as an important step to becoming a truly global positioning and solutions company.
- Finally, UniStrong also made it clear that the purchase was not aimed at picking out particular parts of Hemisphere GNSS—such as design talent or particular intellectual properties—and folding them into UniStrong divisions. Rather, UniStrong Founder, Chairman, and President Xinping Guo said convincingly that he intended to invest heavily in Hemisphere GNSS as a separate entity, supporting increased research and development that would establish the new firm as a technological leader in new GNSS products and solutions. He was particularly interested in developing solutions that made effective use of the Chinese BeiDou Navigation Satellite System as part of GNSS location.
These factors were so compelling that the Hemisphere GPS Board chose in late 2012 to negotiate exclusively with UniStrong, and on January 31st, 2013, GPS World reported that, “Hemisphere GNSS, Inc., a subsidiary of Beijing UniStrong Science & Technology Co., Ltd., purchased the Precision Products business and related GNSS technology and intellectual property from Hemisphere GPS, Inc. As part of the transaction, Hemisphere GNSS acquired all of the high-precision GNSS product lines, all related intellectual property rights, and the Hemisphere GPS trademarks and brands. The precision products segment generated revenues of approximately USD $13.3 million in 2012 serving marine, land survey, construction, mapping, and OEM segments.”
Hemisphere GPS thus became two new companies. The precision products and GNSS OEM division became Hemisphere GNSS, Inc., and the agricultural operations business became AgJunction, Inc.
The formation and sale of Hemisphere GNSS was viewed as a bold move by GNSS industry observers, particularly in China. GPS World reported, “Business analysts have reported in China that this is the first acquisition of an internationally renowned enterprise initiated by a domestic enterprise in China’s satellite navigation industry and represents an important milestone in the development of the industry.”
Guo’s early focus on the BeiDou constellation proved to be prescient. The system has moved forward steadily in the last five years, deploying more satellites and improved technology. As of May 2018, the first eight of 35 planned BeiDou-3 satellites were successfully launched and have already formed a functional orbital network. Ten more are expected to be launched in 2018, and another eleven in 2019, with a total of 35 BeiDou-3 satellites working together in a single constellation in 2020.
“China will have the highest number of satellites over the Asia-Pacific region by the end of 2018 and will therefore provide the best, most stable, positioning service available,” Guo said. This excellent coverage will be particularly important for Asia’s “One Belt, One Road” initiative, the pan-Asian connectivity and communication project based on the Silk Road Economic Belt (land-based) and the Maritime Silk Road (ocean-going). Hemisphere is bullish on BeiDou’s prospects—CEO Farlin Halsey says the constellation’s future is “absolutely promising.”
The Global Times reported that “the overall output value of the GNSS and location-based services market in China reached 211.8 billion yuan (about USD $33 billion) in 2016,” and the timing of UniStrong and Hemisphere’s merging has proven to be fortunate.
“The company is estimated to have nearly doubled its annual income in 2017, reaching 2.3 billion yuan (USD $360 million) with net profits of 250 million yuan, a 160 percent year-on-year increase, according to the UniStrong founder’s keynote speech at the summit.
“Furthermore, 2017 saw the company achieve rapid and wide expansion of its business worldwide on an unprecedented scale, after it successfully laid out subsidiaries for its Asia-Pacific regions in Thailand, Pakistan, and Japan. It also set up a China-UK “One Belt, One Road” Global Innovation Center in Nottingham, UK. The company now possesses a global business coverage and service covering more than 90 countries and regions.”
Much of this extraordinary growth can be attributed to major location innovations pioneered by Hemisphere.
During the acquisition process, Xinping Guo established two broad mandates for Hemisphere.
- Develop new, advanced GNSS technologies truly world-class in performance.
- Use this new technology to establish Hemisphere as the most important component of UniStrong’s bid to become a global GNSS firm.
To support these initiatives, Guo embarked on a round of fundraising to support increased research and development by Hemisphere. This investment, which included the acquisition of top engineering talent, re-energized Hemisphere engineers and they quickly made extraordinary advancements that disrupted a sector that some viewed as being in something of a plateau, technologically.
The engineering team was formed to develop GNSS engines, boards, and software based on the best new thinking in GNSS. A senior director of engineering said, “At the beginning, we sat down in front of a blank screen and had to start with the basics, from writing math libraries, linear algebra, filters, to basic GNSS data management, everything from scratch. There is not a single line of code that was not written as part of this new project; we used nothing legacy.”
This new research and development initiative produced successful results with extraordinary rapidity. Within three years of Hemisphere’s formation, two new pioneering GNSS solutions had been brought to market, the Athena™ RTK GNSS engine and the Atlas® GNSS Global Correction Service, delivering correction signals via L-band satellites at scalable accuracies ranging from sub-meter to sub-decimeter levels.
Describing this period of rapid development, Vice President of Global Sales and Business Development Randy Noland said, “Three years ago, we hired top industry talent, including seven PhDs. We knew that we needed to raise the technology performance of our RTK engine, which historically had been designed primarily for agriculture. The performance requirements are different than those for land surveying or machine guidance.
“That team focused on RTK performance and L-band positioning services and, in just two years, produced a new RTK engine. If you take the top RTK performance providers, we are now either number one, or two in almost every class of performance. It is a pleasure to work with such a capable engineering team.”
Released in Spring 2015, the Athena GNSS engine was quickly recognized by independent testers and customers as next-generation positioning technology, excelling in several key factors including faster initialization times, improved robustness in difficult operating environments, better performance on long baselines, and more sustained accuracy under ionospheric scintillation activities. In a statement, Hemisphere’s engineering director said, “Looking at Athena specifically, we did a complete review, touching every part of the engine — from how we deal with the atmosphere, quality-control of the data, modeling the clock of the receiver, and so on, through to how to do external corrections, whether single-based or network-based. We even looked at and modified the receiver system, improving the multitasking architecture to more actively use the CPU for our computational work.”
The Atlas correction service was similarly disruptive. In June 2015, GPS World lauded it as a new “correction service that matches or exceeds existing competitive system performance” in several key areas, including positioning accuracy, positioning sustainability, convergence time, receiver agnosticism, network RTK augmentation, and subscription model.
Together, the two GNSS innovations provided a platform for sustained growth by both UniStrong and Hemisphere. The two firms were positioned to become the newest major player in the GNSS industry.
Final Piece of the Puzzle
By 2016, it became apparent UniStrong needed one more component to compete with the global giants. Satellite positioning, in addition to geolocation, also needs the high density measuring and reality capture offered by laser scanners, utility locators, robotic total stations, and other land surveying equipment. Hemisphere was making inroads into precision surveying, including a 2015 collaboration with Carlson Software to produce the groundbreaking BRx6 GNSS receiver. This receiver, along with Carlson’s world-renowned surveying and mining software, empowered both companies to increase market share.
Execution of the global strategy continued with the acquisition of Stonex, a global measurement firm headquartered in Milan, Italy, with more than 80 distributors worldwide. The Stonex acquisition was finalized in January 2017, and UniStrong Vice President Guo Siqing now serves as Stonex President and CEO. The Stonex acquisition appears to be a very savvy move by UniStrong. Hemisphere technology is already appearing in Stonex receivers. Stonex’s advanced measurement expertise complements UniStrong’s push to be a full service, vertically integrated, multinational measuring firm that competes directly with established survey equipment specialists.
In 2013, UniStrong’s investment in Hemisphere seemed risky. After five years, this investment has proven strategic and mutually advantageous, as both companies have opened new markets and experienced continuous growth. Specifically, for Hemisphere growth has opened substantial new markets in OEM board production as well as focus on OEM application software for machine control, marine navigation, along with continued strong presence in precision agriculture.
“United. Stronger Together.” is UniStrong’s company motto. And the acquisition of, and tight partnering with, Hemisphere proves that it is more than a motto—it is a way of doing business that has successfully created a new global giant in precision location.