Smartphone Component Trends and Outlook (Sept 2013)

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What does the trend for key smartphone components look like? Does it vary from Tablet components? How does the PC ecosystem evolve or respond? Are there any winners or losers for the future?

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Smartphone Component Trends and Outlook (Sept 2013)

  1. 1. 1 Smartphone Components Outlook September 2013
  2. 2. Agenda 2 1. Background 2. Trends 3. Summary 4. Base Components • Memory, Display, Touch, Processor, Camera, MEMS, Battery 5. Near Term Trends • Inductive Charging, Materials, Bendable/Flexible, Payments, Security, Cloud, User Interface 6. Google Glass 7. Summary 8. Q&A
  3. 3. Presenter’s Background 3 A specialist within the Semiconductor, Software and Internet technologies industries Have designed some of the world’s best Tablets, Smartphones and PCs for companies such as Apple, Samsung, Google Amazon, Dell, hp and LG. I specializes in the following areas: · Networking (WiFi, LTE, 4G) – Broadcom, Qualcomm, Atheros, ZTE, MediaTek · Communications (baseband, small cells, 3G/4G overlay) – Mellanox, Cavium · I/O (touch, gestures, oncell/incell, ITO) – Samsung, LG, Synaptics, Cypress, Atmel, TI · Displays – (IGZO, AMOLED, LCD/LED, Flexible) – Sharp, LG, Samsung, Sony, Corning · Server/Data Center – cloud computing, storage, big data · Speech/Voice navigation – Google, Microsoft, Nuance, Siri · CPUs (ARM, MIPs, x86) - Qualcomm, Intel, AMD, MediaTek, Imagination Technologies, nVidia, Apple, Marvell · Operating Systems (Android/Windows/iOS/Mac) – Google, Microsoft, Tizen · Storage (HDDs/SSDs, Flash/RAM) – Fusion I/O, Virident, OCZ, EMC, Seagate, WD, LSI, Micron, Sandisk, TDK, NAND · NFC/RFID – NXP Semiconductor, TI, ST Micro, Infineon · MEMS Controllers (Gyro, Accelerometer, GPS) – Invensense, ST Micro, Phillips, AMS · PC – Dell, hp, Intel, Microsoft, Best Buy, Acer, Asus, Lenovo · Battery Technologies – Inductive charging, fuel-cells, solar, alternative energy supply, Li-Ion/Li-Polymer · Accessories – tablet keyboards, cases, audio enhancers, disposable · Wearable devices – Google, Fitbit, Jawbone – *HOT* and emerging · Audio/Video controller – Cirrus, Wolfson, ATI, Imagination technologies, nVidia · Advertising – Zynga, Facebook, Yahoo, Google, Microsoft, Comcast and Yoku · Business processes – development, procurement, logistics, Bill of Materials (BOM) · Commerce – retailers, e-tailers, hybrid delivery model – Amazon, Best Buy, Walmart, Apple
  4. 4. This is what drives the Smartphone ‘component’ industry – the pace of ultra-mobile products (including next gen PCs) and the convergence of tethered devices. Technology Trends that Drive Components 4 Courtesy: KPCB
  5. 5. TREND: New major technology cycles generally end up with 10x more users/devices - driven by lower prices and improved functionality Computing Growth Drivers over Time 5 Courtesy: KPCB
  6. 6. TREND: The can now be considered core components approaching commoditization in some cases. Use the double digit rule to distinguish component from commodity. Base Components for Mobile Products 6 Courtesy: MIT and Apple 1 2 3 4 5 6
  7. 7. TREND: Memory will split between NOR and NAND and DRAM consumption will increase by 30% over the next 2 years – due to higher DRAM count in Windows and Android. Key Components for Mobile Products | Memory 7 NAND Flash (~$10-15) 1. Samsung 2. Toshiba 3. Micron 4. Sandisk DRAM (~$8-10) 1. Samsun 2. Hynix 3. Infineon 4. Micro 5. Sandisk 6. Elpida Courtesy: Samsung DRAM production will not take 4-6 months, instead 60 days as most lines were idle…. Skyera, Whiptail, Pure, Solidfire, Cloudbyte, Nimbus, Nimble, Nutanix, Tegile, Kaminario, Greenbyte, and Simplivity Expect Smartphone's to consume more DRAM than PCs in 2014
  8. 8. TREND: Displays will move towards a greater mix of InCell /OnCell technologies while AMOLED will remain at Samsung /LG with IGZO gaining more traction in tablets. No cost declines Key Components for Mobile Products | Display 8 Display (~$18-20) 1. Samsung 2. Japan Display 3. LG Display 4. Sharp 5. Chimei 6. AUO Courtesy: Consolidated Market Forecasts Touch (~$7-10) 1. TPX 2. Young Fast 3. Wintek 4. Nisha LG Vu 3, Galaxy Note 3 will be battling for first flexible display in smart phone category - Oct 2013
  9. 9. TREND: No change in 4G and 4G LTE dominance in Qualcomm for 2014 – expect MediaTek strong in 3G/2G and feature phone transition – expecting margin pressure at QCOM Key Components for Mobile Products | Processors 9 App Processor (~$10-20) 1. Qualcomm 2. TI 3. Samsung 4. nVidia 5. MediaTek 6. Intel Baseband Processor (~$10-25) 1. Qualcomm 2. MediaTek 3. ST Ericsson 4. Broadcom 5. Marvell Photos Courtesy: Qualcomm Apple is the first to introduce a 64-bit processor (A7) into a consumer smart phone from a top vendor. But the M7 is very interesting due to it offloading motion data, in effect enabling wearable…
  10. 10. TREND: Expect camera module and MEMs pricing to remain steady and total camera contribution rises in 2014-15. Expect TI to fade and Hon Hai to rise. Key Components for Mobile Products | Camera 10 Camera Module (~$8-12) 1. Sharp 2. LG 3. Foxconn 4. SEMCO 5. ST Micro Photos Courtesy: ST Micro MEMS (~$2-8) 1. TI 2. ST Micro 3. Invensense 4. Bosch 5. Hon Hai Trend: High-end smartphone accessory that would add a “lens camera” to the back of a mobile device.
  11. 11. TREND: Expert battery size to remain steady and climb as new processors consumption takes over capacity and battery life. Look for a change to Li-Polymer for bendable plays. Key Components for Mobile Products | Battery 11 Battery Module (~$5-8) 1. Simplo 2. Dynapack Photos Courtesy: Smartphone reviews Battery energy density has improved in recent years, but the rate of increase has slowed significantly.
  12. 12. TREND: This will require ‘infrastructure’ chicken-egg scenario to be vetted which requires automotive, display, conference tables, etc. prior to mobile device mass adoption. Near Term Trend | Component – Inductive Charging 12 Photos Courtesy: Toyota Also known as Wireless Power using the Qi standard, but AW4P (backed by Samsung, Qualcomm, Broadcom, Intel, et.al.) is changing the rules Supported on Lumia 920, Nexus 4, Galaxy S4, LG Optimus G Pro and others Setbacks: • expensive charging cover and plate. • Only charges one device at a time right now • Highly inefficient Future Trend: • Cup holders in your car could charge your phone • New coffee table that will charge all the gadgets you drop on it.
  13. 13. TREND: Expect this to remain on cases for the time being with material science focused on textures and finishes over water resistant. Near Term Trend | Component – Materials 13 Photos Courtesy: P2i Nano-coating for Water Proofing • Offered on Motorola, Xperia Z, Galaxy S4 Active. • Itri, P2i, Liquipel and others are able to spray down the coating • Prevents device damage from moisture, light spills. Complexity: • Carrier profitability on damage protection ‘plans’ premium materials = expensive  transparent aluminum, glass, carbon fiber, ceramics and Kevlar
  14. 14. TREND: LG inaugurates with its upcoming LG Vu 3, while Samsung may release Samsung Galaxy Note 3 spin-off, featuring a flexible Youm … Expect both to be available in October. Near Term Trend | Component – Bendable/Flexible 14 Photos Courtesy: MobileLeaks Design Expectations: • Targeted with OLED - by LG, Samsung for Galaxy S5 • Supported by Corning via Willow Glass • Zero bezel which maximizes the display • Screens are made up of flexible materials which allow folding vertically to make it smaller - similar to the Apple iPod Nano. • Hardware components automatically detect the folding action then instantly launch the music player. Considerations: • Flexible PCBs – memory, batteries, SOCs, etc • Limited to hinge assemblies • Look to Plastic Logic to deliver finished panels • Liquavista -> Amazon • Novaled -> Samsung?
  15. 15. TREND: Despite backups & cloud-based storage, this "security" to "identity" shift suggests that phone makers recognizes data is tied to an identity, not an easy-to-crack access code. Near Term Trend | Component – Security/Cloud 15 Photos Courtesy: Apple Finger Print Reader • Primarily usage model is around identity recognition for security, secondary will be authentication of transaction • Provisioned by Authentec and Microlatch • Fingerprint could become the gateway to Web-based authentication (this is the mobile payment part) • Alleviates users choice of poor passwords and password reuse Complexity: • Storage of the fingerprint information – on device or in the cloud? • Easy to fool (playdough, candy, gum, etc.) By adding the new Touch ID architecture that incorporates a fingerprint reader directly onto the device Apple will have a leg up on the enterprise users and IT administrators that are managing BYOD.
  16. 16. TREND: All 3 interface technologies were available in PCs nearly 10 years ago, but now Intel will drive adoption across the Haswell platform – so expect it on most PCs in 2014-15. Near Term Trend | Component – User Interface 16 Trifecta: 1. Touch (required) – usual suspects of ITO or oncell, incell • Obviously requires a screen – thus the move to all-SOC-integrated displays 1. Voice (getting better) – Google, Apple, Nuance, Microsoft • Beyond Siri – think of the interface allowing TV viewers to discover content on a wide range of devices, including TVs, PCs, Smartphones and tablets. • Primarily to monetize ‘Conversation Search’, requires “relevance” IP. • Without it – Google Glass is unusable – requires always on – listening. 1. Gesture (best when combined with others) – Leap Motion, Maxim, Sharp, Capella • Manipulating 2D text/photos and 3D digital models with his hands/eyes. • Samsung’s eye tracking capability on the S4 sounds cool, but it hardly ever works in a way that most users find enjoyable enough to keep using it. Revenues for proximity-based gesture sensors is projected to reach US$123 million in 2013, up from just US$42,000 in 2012. More than half of new automobiles in 2019 will integrate voice recognition, as car manufacturers increasingly seek safer ways for drivers to interact with navigation, music or phone calls,
  17. 17. TREND: As a method of payment, I believe NFC is a non-starter due to ‘tolls’ collected between POS and banks. Thus PayPal at retailers is best positioned to win in my opinion. Near Term Trend | Component – Mobile Payments 17 Image Courtesy: Business Intelligence •Still in the early stages of mobile payments adoption: • ~8 million U.S. had adopted a consumer-facing NFC- compatible system like "Google Wallet“. • PayPal alone processed $14 billion in mobile payments last year •Increase Smartphone penetration WW fuels growth: • In Africa, mobile payments have grown as an to poor banking. • In Asia, mobile payments have into many facets of everyday economic life and consumer-facing infrastructure. •Large scale adoption of tablets and smartphones as registers on the merchant side: • Terminals still rely on consumer use of physical credit cards. • Many mobile payments market estimates miss the fact that small businesses and enterprises are adopting mobile for point-of-sale tools. •How big will mobile payments become? • 2017: WW - the total value of global offline transactions facilitated by mobile devices will reach about $1.5 trillion, up from $120 billion in 2012. • In the U.S., transaction value will rise to $244 billion in 2017, from $15 billion last year. • By 2017, the total consumer user-base will climb past the 500 million mark.
  18. 18. Tip: This is roughly $180 in BOM cost and should support a $350 sale price for Glass 18 It's running Android 4.0.4 - Ice Cream Sandwich It's an OMAP 4430 CPU (TI - ARM Cortex M3 CPU) 500-1GB of RAM (Elpida or Hynix) 16GB Flash (Sandisk, Micron, Samsung) 128x128 Pixel screen with Capacitive touch integrated nHD projector display (640x360 – Google only) Accelerometer (STM, Invensense) Vibration device (Bosch) Bluetooth 4.0 or Bluetooth LE (low energy spec) Airplay (Apple only) Titanium frame (Google only) 550 mAh battery (2.1 Whr) Custom caes design Bonus: Key Components for Google Glass Image Courtesy: VentureBeat
  19. 19. Summary | Recap 19 1. Structural commodities should continue 1-2% cost decline / monthly 2. Strategic components will require new usage to support current GM levels 3. Flash to remain stagnant on COGS with a balanced S/D line for consumption 4. DRAM to rise slightly, artificially for fire, but reality for consumption 5. OLED stays expensive and not game changing yet, bendable display for all, flexible for Apple 6. Core count increases on SOCs/APP processors, M7 is game changing, Snapdragon cost red. 7. Materials – more plastics to support COGS, more textured surfaces to support high end 8. NFC not taking off yet – fingerprint reader will and cloud based authentication concerns 9. Voice UI getting perfected, gesture will be annoying and TV interface is still TBD 10. Google glass needs to be $300 and may require tethering
  20. 20. Tip: I have a short list of key players that are helping build around the ecosystem with innovations in battery, flexible PCBs & displays, materials and textures. Any questions? 20

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