LiDAR: Velodyne Shifts From Subwoofers to Self-Driving Cars

It's rare to see a company succeed after completely overhauling its central product, let alone industry. Sure, organizations sometimes dabble in industries that are new to them — take, for example, Microsoft getting involved in video gaming a decade and a half ago — but rarely do they stop doing what made them popular in the first place. And yet, that's exactly what it appears Velodyne is doing right now.

When Velodyne was founded in California more than three decades ago, it set out to carve a place for itself in the high-end audio market. The company eventually found its niche by producing high-quality subwoofer technology and by focusing on low-frequency sound. A few years ago it expanded that focus to include high-end headphones, including the vPulse in-ear device. But Velodyne's foray into a crowded and highly competitive headphones market hasn't exactly been a major success. And, let's face it, they haven't exactly been innovating in subwoofer design as of late. In fact, it seemed to us that their emphasis on consumer subwoofers dwindled shortly after they shifted their primary business to online while attempting to preserve their brick and mortar pricing structure in a highly competitive ID marketplace. Not only did they lose a large share of their brick and mortar dealers, but many of their key engineers responsible for subwoofer design jumped ship. In fact, this is so apparent now that if a consumer goes to Velodyne.com looking for subwoofer or headphone products, they won't find any. You now have to go to: http://velodyneacoustics.com/ to view their home audio products.

Shifting Gears

That helps explain why the company is now completely shifting gears and investing heavily in the emerging self-driving vehicle market. In less than a year it has forged key alliances with major automotive companies, like Ford, in order to ramp up production of three-dimensional radar technology known as LiDAR.

LiDAR plays an important role in helping self-driving vehicles see where they're headed, which means there's a huge amount of potential for Velodyne in this market. LiDAR works by sending out short bursts of light that, when added up, help craft a high-definition 3D picture of everything around a vehicle.

For Velodyne, this means it has an opportunity to transform the self-driving market from the concept and testing stages to full-scale production and mainstream exposure. Already LiDAR is playing a key role in the production of new and highly advanced farming, mining, and military equipment.

Challenges Ahead

But it will take hard work and a lot of luck to bring this technology to the daily driver, primarily because many people remain leery about giving up control of their vehicle to a computer. Even in an age when computers are central to the lives of people in both developed and developing countries, many people worry that bugs, viruses or hackers could make using self-driving technology too dangerous.

It's a remarkable challenge for a company that, until recently, focused most of its attention on helping build the ultimate home audio experience. Still, Velodyne has the full support of its most prominent automotive partner, Ford. "We've used their LiDAR exclusively in our development vehicles," says Raj Nair, executive vice president of product development at Ford. "And they are the only supplier in the market that can help us achieve our goal of delivering a high-volume autonomous vehicle."

It's not just Ford that believes in the future of LiDAR. Several global research firms have predicted that sales of LiDAR-based systems will explode in the coming years; for example, Massachusetts-based Mordor Intelligence expects the international market for LiDAR to expand from just over $1 billion in 2015 to almost $2.5 billion in 2020. Should that impressive growth come to fruition, Velodyne will stand to reap much of the reward.

Such growth is likely to transform Velodyne, which currently employs only a few hundred people at its Mountain Hill, California, headquarters. It already appears to be transforming Velodyne's LiDAR systems, which until recently cost roughly $8,000 -- far too expensive for the average consumer vehicle. But the alliance with Ford and other major supporters -- like Chinese search engine company Baidu, which has invested about $75 million in Velodyne -- have helped bring the cost down significantly. In fact, Velodyne is now working on a system that could be produced for well under $1,000.

Overall, it's a remarkable moment for Velodyne, a company whose founder, David Hall, built his first amplifier while still a toddler. Hall took that passion for home audio and used it to build a company that, by the late 1980s, was becoming well-known for producing high-end speaker systems.

Fast-forward thirty years and Velodyne stands poised to make a much bigger impact on a whole new industry.