From Subscriber to Silicon: Why end-to-end technology value chain insight is critical to your supply chain survival
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From Subscriber to Silicon: Why end-to-end technology value chain insight is critical to your supply chain survival

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How do technology adoption trends impact the entire supply chain? What future opportunities are shaping today's raw materials, semiconductors, and displays? ...

How do technology adoption trends impact the entire supply chain? What future opportunities are shaping today's raw materials, semiconductors, and displays?

It's a brave new world where "everything technology" is a common denominator for an otherwise uncommon explosion in disruptive innovations, shifting consumer behaviors, and volatile swings in supply and demand that reverberate throughout all technology-consuming markets. As the downstream battle for subscribers intensifies, the upstream battle for the silicon, intellectual property, and raw materials that are increasingly used within automotive, medical, industrial, and other sectors is just as fierce.

While most savvy organizations understand the interconnected nature of the supply chain, many also lack a fundamental understanding of the issues that will impact them most.

Join IHS and Supply & Demand Chain Executive as they share insights into some of the top issues impacting technology, media, and telecommunications value chains. They will raise questions to key issues like the future of pay-TV and how this impacts set-top boxes, software platforms, mobile devices, network operators, and chip production. They will outline the importance of having supply chain intelligence from "subscriber to silicon" by addressing such topics as:

How do technology adoption trends impact the entire supply chain?
How is the consumer having such a major impact on operator strategies and subscribers?
What future opportunities are shaping today's raw materials, semiconductors, and displays?
How are themes like higher resolution, touch, or interface adoption driving the supply chain?
How are pay-TV, smart technology, and other ecosystems disrupting adjacent markets?
Who are the winners and losers and why should you care?

Rapidly changing upstream and downstream events shape today's technology landscape, the effects of which can create immediate winners and losers in the supply chain. Don't miss this chance to learn the importance of understanding the end-to-end dynamics influencing your supply chain.

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From Subscriber to Silicon: Why end-to-end technology value chain insight is critical to your supply chain survival From Subscriber to Silicon: Why end-to-end technology value chain insight is critical to your supply chain survival Presentation Transcript

  • September 2012Copyright © 2012 IHS Inc. All Rights Reserved.
  • Join the Conversation Follow IHS on Twitter… Get the latest supply chain news, updates and trending topics from @IHS_SupplyChain Live Tweet today’s webcast: #IHSWebcastCopyright © 2012 IHS Inc. All Rights Reserved. 2
  • Today’s Speakers Research Director, Digital Media 408 654 1707Copyright © 2012 IHS Inc. All Rights Reserved. 3
  • From Subscriber to SiliconWhy End-to-End Technology Value Chain Insightis Critical to Your Supply Chain Survival Research Director, Digital Media 408 654 1707
  • Why?Copyright © 2012 IHS Inc. All Rights Reserved. 5
  • Because… Image Sensor  140% Overall Semiconductor  112%Copyright © 2012 IHS Inc. All Rights Reserved. 6
  • Understanding…Copyright © 2012 IHS Inc. All Rights Reserved. 7
  • Meanwhile… Contract Manufacturers Display Device Providers Software Independent Wireless Design Houses Infrastructure and Providers IP Licensing Wireless Silicon Communications Device Providers OEMs Value Chain ~ $1 Trillion Service Consumers Providers (Operators) Network Retailers Maintenance and Content Software ProvidersCopyright © 2012 IHS Inc. All Rights Reserved. 8
  • Example… Technology • Raw Materials • Semiconductors • Memory • Displays • Manufacturing • Channels • Applications • Gaming • Operators • Video • Wireless Media • Cinema • Wired Telecommunications • TV • Infrastructure • Advertising • Computing • Broadband Media • Telematics • Mobile Media • ConsumerCopyright © 2012 IHS Inc. All Rights Reserved. 9
  • From Subscriber to SiliconWhy End-to-End Technology Value ChainInsight is Critical to Your Supply Chain SurvivalResearch Director, Digital Media 408 654 1707
  • The Consumer Electronics Value Chain isLarge and Complex $280B $50B Contract Manufacturers Display Device Providers Software Independent $360B Design Houses Device & IP Licensing OEMs Consumer $62B CE Semi Electronics $200B Suppliers / Pay TV Service Manufacturers Value Chain Providers ~ $1 Trillion Service Consumers Providers (Operators) Online TV, Retailers Pay per view Service Content providers Distributors $5B Copyright © 2012 IHS Inc. All Rights Reserved. 11
  • The story of an interconnected supply chain The capabilities of the components drive consumer demand Components Vendor Retailer/operator Consumer/subscriber Revenue flows all the way back from subscribers to siliconCopyright © 2011 IHS Inc. All Rights Reserved.
  • As an example let’s look at what happens tothe TV sets market in Europe European TV sales and installed base 70 700 60 600 Installed base (m) 50 500 40 400 30 300 20 200 10 100 0 0 TV sets sales TV sets installed baseCopyright © 2011 IHS Inc. All Rights Reserved. 13
  • European TV sets sales and installed baseare starting to flatten after years of growth Inflection point European TV sales and installed base 70 700 60 600 Installed base (m) 50 500 40 400 30 300 20 200 10 100 0 0 TV sets sales TV sets installed baseCopyright © 2011 IHS Inc. All Rights Reserved. 14
  • But what actually happened during thisperiod was an increase in sets installed TV homes and TV sets across major countries and regions 600 500 Homes / installed base (m) 400 300 200 100 0 US Europe Western France Germany Italy Spain UK Eastern Europe Europe TV HHs TV setsCopyright © 2011 IHS Inc. All Rights Reserved. 15
  • Where were these new sets being installed?In new rooms, this is really driven by FPD Shipments driving sets per home 60 3.0 50 2.5 Beginning of growth Shipments (m) 40 2.0 30 1.5 CRT FPD 20 1.0 Sets per home 10 0.5 0 0.0Copyright © 2011 IHS Inc. All Rights Reserved. 16
  • This has increased the number of homeswith more than one TV set Multi-set homes 100% 90% 80% 70% 60% 50% US 40% Europe 30% Western Europe 20% 10% 0%Copyright © 2011 IHS Inc. All Rights Reserved. 17
  • Now we’re starting to reach a natural limit toTV set growth: no more rooms for TVs Multi-set TVs profiled into homes 2011 600 3.5 500 3.0 Installed base (m) 2.5 TVs per home 400 2.0 300 1.5 200 1.0 100 0.5 0 0.0 US Europe Western France Germany Italy Spain UK Eastern Europe Europe TVs in multi-set HHs TVs in single-set HHs TVs per multi-set HHCopyright © 2011 IHS Inc. All Rights Reserved. 18
  • And this slowdown is happening globally,but not uniformly across regions TV set shipments by region 300 250 China India Shipments (m) 200 Russia Brazil 150 Asia-Pacific Latin America 100 North America Middle-East & Africa 50 Eastern Europe 0 Western EuropeCopyright © 2011 IHS Inc. All Rights Reserved. 19
  • And there are some noticeable bubbles,including 2005-2010 globally 5-year growth bubbles in TV set sales 140% 120% 100% 80% 60% 40% 20% 0% -20% -40% 2000-2005 2005-2010 2010-2015Copyright © 2011 IHS Inc. All Rights Reserved. 20
  • So, our forecasts for TV set shipments takeinto account all of these complex factors TV sets shipments in Europe 80 70 60 Units (m) 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Copyright © 2011 IHS Inc. All Rights Reserved. 21
  • In fact, we can see the drivers of componentrevenue in the TV set shipment volumes TV shipments against key component revenue 25 300 Revenue ($bn) 250 Shipments (m) 20 200 15 150 10 100 5 50 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Memory MCU Display Driver Logic ASSP/SoC Analog/Power LEDs Other TV set shipmentsCopyright © 2011 IHS Inc. All Rights Reserved. 22
  • And more explicitly in the volumes of keyadvanced technologies which have reallydriven demand for advanced components Advanced TV technologies against component revenue 25 300 Revenue ($bn) 250 Shipments (m) 20 200 15 150 10 100 5 50 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Key component revenues HD (incl. FHD) 3D Digital tuner Smart TVCopyright © 2011 IHS Inc. All Rights Reserved. 23
  • TV sets are only one ecosystem, others, such as set-top boxes also obey the same rules back up the supply chain North America, Europe 2011: TVs accessed by pay-TV Total TV sets (935m) Pay-TV STBs (323m) High-end STBs (149m)Copyright © 2011 IHS Inc. All Rights Reserved. 24
  • So we might ask ourselves what is drivingthe growth and flattening of the pay TV set-top box market Global digital pay TV set-top box market 180 14 160 12 140 Revenue ($bn) Shipments (m) 10 120 100 8 80 6 60 4 40 20 2 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cable Satellite IPTV RevenueCopyright © 2011 IHS Inc. All Rights Reserved. 25
  • There is a superficial correlation betweenpay TV subscribers and set-top shipments Global subscribers against set-top box shipments 700 160 600 140 Shipments (m) 120 500 Subscribers (m) 100 400 80 300 60 200 40 100 20 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Digital pay TV subscriptions Digital pay TV set-top box shipmentsCopyright © 2011 IHS Inc. All Rights Reserved. 26
  • However it is much more complex, driven byinstalled base breakages, subscriber churnand subscriber net additions Set-top box drivers: US data (m) 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Set-top box shipments Set-top box installed base Total pay TV subscribers Net subscriber additionsCopyright © 2011 IHS Inc. All Rights Reserved. 27
  • The growth opportunity for set-tops is partlydriven by the number of TVs not currentlywith a set-top North America, Europe: TVs accessed by pay-TV set-top boxes 700 100% 90% 600 percent accessed (%) Devices installed (m) 80% 500 70% 400 60% 50% 300 40% 200 30% 20% 100 10% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TVs accessed by digital pay-TV STB TV sets installed Percent accessedCopyright © 2011 IHS Inc. All Rights Reserved. 28
  • But there is also a big future driver from IP-capable (hybrid) gateway and client boxes Connectable pay TV STB shipments by STB type 80 70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 IPTV STB DTH Hybrid STB DTH STB-Gateway DTH Thin Client Cable Hybrid STB Cable STB-GatewayCopyright © 2011 IHS Inc. All Rights Reserved. 29
  • Which is driven by increased globalbroadband penetration Broadband penetration of households (%) South Korea Hong Kong 100 UK 90 France USA 80 Germany 70 Japan Australia 60 Italy 50 Spain Czech Republic 40 Argentina 30 Turkey Russia 20 Poland 10 China Brazil 0 South Africa 2000 2005 2010 2015Copyright © 2011 IHS Inc. All Rights Reserved. 30
  • However, broadband connectivity has alsohad a impact on consumer behaviour Digital Video closed network InternetCopyright © 2011 IHS Inc. All Rights Reserved. 31
  • The result is a fragmentation of devices in consumers’ homes North America, Western Europe: percentage of devices installed 100%Percentage of devices installed (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2005 2010 2015 Tablets Connectable PMPs Connectable consoles Smartphone handsets PCs Connectable TV sets Connectable BDCopyright © 2011 IHS Inc. All Rights Reserved. 32
  • At a household level, TV sets are nowinundated with companion devices North America vs. Western Europe: devices per TV household 10 9 8 Devices per TV HH 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 North America: TV sets per TV HH Western Europe: TV sets per TV HH North America: IP connectable handsets, tablets, PMPs, consoles, PCs, TV sets, and BD players per TV HH Western Europe: IP connectable handsets, tablets, PMPs, consoles, PCs, TV sets, and BD players per TV HHCopyright © 2011 IHS Inc. All Rights Reserved. 33
  • Pay-TV investment has fragmented awayfrom large volume relatively complex STBs Simple set-tops Complex set-tops Multi-device Requirement To access To affirm a control Reactive against additional TV sets point in the home changing consumer behaviour Example DTA in the US Multimedia Home Applications on Gateways PCs, phones & tablets 34Copyright © 2011 IHS Inc. All Rights Reserved. 34
  • Creating severe revenue pressures onmajor set-top suppliers Global STB revenue by vendor 12 Others 10 Cisco+SA Revenue (€b) 8 6 Motorola 4 Pace+Philips 2 Technicolor+Hughes 0 STB revenues (€m) STB average selling price (€) Vendor 2000 2010 CAGR Vendor 2000 2010 CAGR Cisco + SA 1,139 1,158 0.2% Cisco + SA 327 103 -10.9% Motorola 1,686 1,814 0.7% Motorola 281 95 -10.2% Pace + Philips 1,339 1,365 0.2% Pace + Philips 275 66 -13.3% Technicolor + 2,116 930 -7.9% Technicolor + 230 72 -11.0% Hughes Hughes Total Market 8,005 10,998 3.2% Total Market 264 76 -11.7%Copyright © 2011 IHS Inc. All Rights Reserved. 35
  • And each device type is driven by the samelogic of revenue from consumer spending… Western Europe 2011: consumer leisure spend 2% Pay-TV VoD 12% Pay-TV subscriptions Games Mobile Games 10% Mobile Video 2% Mobile Music 2% On-line video On-line music 6% 54% Physical music Physical rental 1% 10% BD disc rental DVD retail CinemaCopyright © 2011 IHS Inc. All Rights Reserved. 36
  • …advertising revenue… Western Europe 2011: advertising revenue 1% 1% 7% Television 11% 29% Internet Radio Newspaper Magazine 24% Out-of-home Cinema 22% Mobile 5%Copyright © 2011 IHS Inc. All Rights Reserved. 37
  • …and ultimately device purchases Consumer electronics device purchases: 2011 13% 5% 3% Blue ray players Blue ray recorders 26% Televisions Game consoles 24% Set-top boxes Media Tablets Digital Media Adaptors 11% 18%Copyright © 2011 IHS Inc. All Rights Reserved. 38
  • Thank You!Research Director, Digital Media 408 654 1707
  • Robust…Copyright © 2012 IHS Inc. All Rights Reserved. 40
  • IHS Electronics & Media… PARTS , PROCUREMENT, AND SUPPLY CHAIN RISK MANAGEMENT VERTICAL RESEARCH PLATFORMS Consumer Electronics, Media, Electronic and Industrial and Telecommunications Technology Display Materials and Systems HORIZONTAL RESEARCH Teardown Analysis PLATFORMS Connectivity, Electronics Manufacturing, and SemiconductorsCopyright © 2012 IHS Inc. All Rights Reserved. 41
  • IHS Electronics & Media… • Access to over 1,200 data transformation analysts and researchers, over 350 sector analysts and industry experts, and tens of millions of data points • Proprietary datasets, forecasts, perspectives, and market analysis • Primary and secondary research methods • Data modeling • Regional and country-level granularity • Pricing, cost modeling, and teardown analysis for thousands of devices and products • Automotive, consumer, industrial, and medical electronics as well digital content creation / distribution market data and analysis • Value chain assessments including: end-market reporting and commentary; hardware, component, and services market share analysis; supply & demand dynamics; spending; electronics design and manufacturing; as well as production trends and capacitiesCopyright © 2012 IHS Inc. All Rights Reserved. 42
  • Questions & Answers Research Director, Digital Media 408 654 1707Copyright © 2012 IHS Inc. All Rights Reserved. 43
  • For More Information Send questions and requests for information to: Webcasts@ihs.com Follow @IHS_SupplyChain on Twitter Like IHS on Facebook Follow IHS on SlideshareCopyright © 2012 IHS Inc. All Rights Reserved. 44