As a handheld console, the PSP in North America is on its last leg. It has been losing market share to smart phones, Apple products, and the NDS. But this doesn’t mean the PSP is out for the count. As Sony recently said, “the PSP has life left in it yet.”
Sony claims that right now their main market is the children’s arena, and their game line-up seconds that claim. Its true of most handhelds, but especially for the PSP, that they are great entertainment devices while on the road. A parent can pick up a PSP, games, and movies and be set for the entire road trip. They might even appropriate the PSP for one of their own long trips because the screen is so perfect for viewing movies. But only if they don’t already have a notebook, or netbook, or portable dvd player, or iPod, or smart phone, etc.
And that’s part of the problem. When the PSP first came out, it was the most advanced handheld device on the market. Those days are long since gone. According to Steve Jobs, the iPod Touch is now a more popular gaming device than both the PSP and NDS. The market has dramatically changed.
Sony has two problems with gaining traction in North America: their stance on DRM and their game line-up. The UMDs Sony uses have never been very popular in North America, and when Sony released the PSP GO, consumers had to repurchase anything they’d already bought on the UMD format if they wanted to play it on the PSP GO as well. Not very good publicity. Sony has also had difficulty getting the right game line up for the PSP that can compete with the NDS, so they have fallen back on the more child friendly titles.
So how is the PSP still alive and kicking? Well, North America isn’t the only market for handhelds. The PSP dominates in handheld sales for Japan, even above the NDS. So yes, there is life in the PSP (but not in the GO -even in Japan the PSP GO was at the bottom of hardware sales).
So what is next for the PSP? Sony tried the GO experiment, so I doubt they’ll go down that route again. But there have been rumors of a PSP android phone as well as a PSP2 with touchscreen controls. Sony is keeping their next move hush hush, but whatever they release next is bound to be popular all over the globe.
On Wednesday, September 1, 2010, GLOBALFOUNDRIES will be hosting its inaugural Global Technology Conference in Santa Clara. Attendance should be high as we all try to find out what GLOBALFOUNDRIES has up their sleeve to woo new business.
These technology forums are a great way to get broad audience coverage but all the big foundries are targeting the largest and the most advanced semiconductor manufacturers. As I prepare my next foundry report, I can see why big customers are so important. In 2009, TSMC reported that their 10 largest customers accounted for 53% of their total net sales. Back in 2000, TSMC’s five largest customers comprised 30.6% of their total sales. UMC’s top 10 customers account for 65.3% of total revenues and SMICs five largest customers account for 60% of their total sales. In 2008, Chartered Semiconductors top five customers comprised more than 63% of their total sales and with the combined sales of GLOBALFOUNDRIES that percentage is even higher now.
Customer concentration and technology focus does impact the foundry market dynamics. The big foundries are doing well and should continue to see healthy growth for some time. First half 2010 foundries sales were almost double compared to first half 2009. Foundries are not only growing, they are surpassing historical sales records. But as TSMC and Global Foundries focus on large customers, the specialty foundries are grabbing a nice share of the power management, high voltage analog and image sensor markets.
The “More than Moore” foundries grew by 70% in the first half of 2010 over first half 2009. There were a few stellar performers. In 2009, Tower/Jazz did not suffer from declining sales as most other foundries and this year they are on track to experience over 60% growth up to $500 million in sales. The synergies from the Tower and Jazz merger provided them with some great results.
So while GLOBALFOUNDRIES, Samsung, TSMC, and UMC duke it out over the largest fabless and fab-lite semiconductor companies, foundries such as MagnaChip, Tower/Jazz and X-fab are quietly picking up business in the fast growing product segments that utilize mature, specialty technologies.
Can’t wait to see what GLOBALFOUNDRIES has to offer. See you at their Technology Conference.
Joanne Itow
Managing Director
The 2010 Flash Memory Summit wrapped up last week in Santa Clara, CA. Three days of breakout sessions, technical discussions, tutorials, flash exhibits and keynote speakers provided attendees with ample opportunity to gather intelligence related to the future of flash memory architectures.
Inevitably, most who attended are likely to come to the same conclusion; Denali’s reputation for throwing great parties is well deserved. Wait, that’s not what I meant to write. What I meant to write was… the gigabyte rules. While there were numerous relevant points discussed over the three day event, let’s focus momentarily on a story told by Ed Doller, VP Micron Technology, which best illustrates both the state and future of flash memory.
Ed spoke on Thursday, August 19 to a packed theater on the topic of “Flash Memory—The New Technology Driver”. He cited a number of technology advances over the last several years including the rapid adoption of social networking sites like Facebook and Twitter. While it’s easy for many within the industry to focus on delivering improved performance by enhancing a number of technical capabilities consumers desire, it all boils down to memory.
Currently, he noted, the largest recognized byte is the “yottabyte”, which is larger than the peda, exa, zetta bytes. He added some humor when summarizing a newspaper article in which a student at UC Davis is lobbying for the next level of measurement to be termed a “hella”byte. An appropriate term for both the ridiculous storage capability and the reference to regional slang common amongst many native Northern Californians when referring to something extreme.
Mr. Doller drove the point home with a personal story he experienced when he recently had to take his daughter laptop shopping before sending her off to college. While at Costco with his daughter she inquired into the difference between two laptops when looking at the technical specs for each (Ed had a slide of the technical specs for each). Specifically, she asked about the 1.8GHz 4GB and 2.3GHz 8GB specifications. He told her that one spec was for speed and one was for memory.
She illustrated the current consumer desire with this, “I don’t really care about the speed; I just want the gigabytes of memory for videos and music”. She continued, “I thought those (referring to the 1.8GHz and 2.3GHz) were serial numbers or something”. While difficult to bring justice to humor in the story Ed told and the resounding applause it generated, the point was well taken. While consumers want it all, what they want more than anything is memory and storage. The consumer acumen, even for the novice consumer, begins and ends with the gigabyte. Ed noted that just a mere two years ago, most consumers had little knowledge of gigabytes.
The pervasive theme throughout the conference was one of enthusiastic optimism for the future of NAND flash and SSDs. While this would be expected by those with a stake in the game, outside market research analysts corroborated growing demand and increasing SSD adoption over the forecast years. Semico Research agrees with this optimism and views the progress in controller software as having a vital role in increasing the rate of adoption.
Error correction, garbage collection, and trim functions will need to be addressed from the software side for the adoption of SSDs to overcome reliability issues as NAND continues to scale to smaller process geometries. Based on the coverage of this issue at the conference, I cannot imagine those with an opportunity in flash memory failing to recognize this opportunity.
All of the interesting gizmos get the attention of the mainstream media and even the industry press. The various smart phones, IPTV, iPads and other devices that connect to the internet, especially via wireless, generate a great deal of excitement and sales.
However, these devices need an infrastructure to support them. As more devices come into use and the bandwidth demand increases to support advanced apps, the service providers are under pressure. They need to deliver quality service at an acceptable price and still make a profit. The concern over running out of internet addresses for all of these devices has been raised recently. This is IPv4 which uses 32-bit address. The industry is moving to IPv6 which uses 128-bits. However, the deployment for IPv6 is still very low.
In recent weeks two companies have made significant product announcements to address the needs of the communications infrastructure.
In July 2010 NetLogic Microsystems launched the NLX321103A, a three chip set that handles a broad range of packet-processing functions at speeds up to 40Gbits/sec. This comes out of the acquisition of RMI Corp. (June 2009). The NLX321103A includes RMI’s 8-core, quad-threaded XLR processor. This is a MIPS64 based design for which the company holds an architectural license. NetLogic’s solution will enable platforms, such as mobile infrastructure, to reduce the bill of materials (BOM) and increase performance. It also supports IPv6.
Xelerated, a Swedish company, has released its third generation AX family of programmable Ethernet switches. The AX switches are designed for a new generation of high-density, high-capacity access systems, including point-to-point Ethernet, GE and 10GE, as well as point-to-multipoint EPON, GPON, 10GEPON and XGPON.
Compared to the prior generation, Xelerated’s latest product line increases the data throughput rate by about 2.5 times. The platform solutions are able to stay within the same power envelope. The AX family is a highly integrated solution which includes DDR3 memory controller and TCAM. The result is that Xelerated’s solution can reduce the total BOM cost of a line card.
As it happens Netlogic and Xelerated partner in various areas. Among these are content-aware processors, TCAM / network search engines, and 10/40/100 Gigabit Ethernet interconnects.
The subject of dealing with the challenges faced by communications service providers was addressed at the Semico Outlook Conference (March 2010). Reducing costs and delivering more bandwidth and higher performance, while remaining profitable, is a challenge. This has to be met if all of the consumer devices are going to be sold. It comes down to chip vendors to provide viable solutions.
Tony Massimini
Chief of Technology
tonym@semico.com
Apple reported in its last financial results that as of June 26, 2010 it has shipped 3.27 million iPads. This is the first quarter of availability for the iPad. It is shipping at the rate of about 1 million units per month. However, keep in mind that there was a large amount of pre-orders prior to its April launch.
The question is can Apple ramp up production to meet demand? Apple’s Steve Jobs has stated since its launch that demand for iPad has been stronger than expected. Apple has been rolling out iPad to markets outside the US in select countries at different times rather than an all out world wide blitz. On May 28 Apple made iPad available in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK. On July 23 Apple extended this to Austria, Belgium, Hong Kong, Ireland, Luxembourg, Mexico, Netherlands, New Zealand and Singapore.
This steady roll out may help Apple manage its supply issues. Recently, the supplier of the iPad’s display, LG said that it was unable to keep up with demand. Apple has signed on Samsung as a second manufacturer. Flash memory is an important component for iPad. There has been strong demand for Flash for many devices. Apple’s iPad has to compete for this supply.
There are several iPad “killers” from major OEMs waiting in the wings. These are likely to launch in 4Q 2010. It is uncertain how well these products will do against the iPad. Presumably, there should be some significant sales since they are from major OEMs such as HP and Dell.
It is interesting to note that even with more international markets being added each month, iPad ramp has not increased significantly, but it has kept a steady pace. Semico assumes that the run rate will increase slightly during 2010. The 4Q 2010 should be strong due to holiday sales. Semico is increasing its forecast for iPads and tablet PCs overall. By the end of 2010 iPad shipments could be in the range of 10 to 11 million units and represent about 90% of the tablet PC market.
Tony Massimini
Chief of Technology
tonym@semico.com
When Semico released our e-reader report, one of the predictions we made was that Amazon would introduce an updated Kindle this quarter. They were right on track and are estimating new orders will ship September 10th. This was a highly anticipated step, considering all the new competition and great products being introduced to the market.
The main purpose of the Kindle is to sell ebooks for Amazon, and it has been a very successful endeavor. In order to sell more ebooks, Amazon has released a Kindle app that can work on phones, iPods, the iPad, and computers. As this market continues to mature, publishers have become more interested in interactive books with embedded video and audio. The Kindle app now supports these features along with Apple’s iBooks app, making cell phones, iPods, and the iPad, decent e-readers, though they lack the electronic ink display.
The e-reader market over the last year has seen a significant shift in market dynamics. Originally, Sony lead the market with their variety of e-readers, then the Kindle took the lead. Later, e-readers were displayed in brick & mortar stores such as Best Buy, Borders, and Barnes and Nobel. After the introduction of the iPad however, the market has splintered into two sub segments – pure ebook reading with e-ink screens, and the more versatile LCD screens for interactive books, movies, and internet browsing.
With the iPad entering the market and now the Kindle being updated with a significant price decrease, other manufacturers are having to follow suit, including Sony’s Reader Pocket Edition, now selling for $150, their Touch Edition, selling for $170, and their 3G Daily Edition, selling for $300. The Nook was also reduced in price, with their Wi-Fi device reducing to $150 and their 3G going down to $200.
However with all these great additions and price decreases, there have been some casualties -products that have been unable to be anything beyond vaporware. The Que & Skiff are two of those fallen by the wayside. Both of these products had sleek designs, large electronic ink displays, and lots of consumer interest. Neither was able to compete with the price of the Kindle or even the iPad.
As for the future, we know Barnes and Nobel filed with the FCC for two new e-readers that both appear to have 3G and Sony is rumored to be coming out with another 3G e-reader soon. Will 4G e-readers with color e-ink be next? Here’s looking to next year.
On July 6th I talked about the sun entering into an active period. Its here! Early Sunday, August 1st there was an eruption on the sun’s surface, usually referred to as a coronal ejection. Tons of plasma were shot into space and are headed towards Earth. These ionized atoms are expected to arrive early tomorrow, August 4th. So if your cell phone is acting up tomorrow this may be why. This is part of the Sun’s next active cycle. It will be interesting to see if there is an effect on our electronics.
Joanne Itow discusses how the secondary equipment market will thrive via the markets that don’t require 300mm fabs, including discretes, analog, sensors, etc. Included in the video are multiple charts, showing how these markets will grow. Semico has partnered with SEMI on a study that will be available in the 4th quarter.
Frequent readers of the Semico Spin know that I am a fan of ComicCon and attend it in San Diego, CA during my family vacation. This is the seventh year in a row if I remember correctly which we attended. As I say every year, there were more geeks than you can shake a light saber at.
This year I had a small video camera, a Kodak ZI8. I have added video to my annual show report. Links to some of the clips are in this article. You can find these and others on the Semico home page.
For those unfamiliar with ComicCon, it is the largest convention for comic books in the world. However, it covers a great deal more. Science fiction and fantasy TV and movies are heavily represented. These are usually tied in with comics and animation. There is also a strong tie in with video games. For the third straight year, ComicCon was sold out for all four days with attendance of 125,000 each day. It is the largest convention through out the year for the city of San Diego.
The show began 41 years ago as a small convention for Sci-Fi fans focused on comics and literature. It has ballooned into a huge media event attracting TV and movie producers to promote their work. These productions usually have a tie in with comics and Sci-Fi, but Comic-Con has expanded to pull in other pop culture media.
Content is King! Without enough material there is little incentive to buy the hardware. What consumers want to see and how they want to interact with it drives the development of the electronics.
ComicCon 2010
No, I did NOT go in costume, though there were plenty of interesting sights. There were the usual Star Wars storm troopers of various types, zombies, and this year several Mad-hatters and Alice in Wonderland. At ComicCon one sees the rich source material for new entertainment. This is very important for the video game market. The fans of the sci-fi/comic genre want cutting edge graphics and special effects. They represent a key segment of the video game market. ComicCon is a venue for previewing many new upcoming games for the holiday season.
Many new games were being demo’ed for all of the video game consoles, the handheld games and PC platform. These have ever increasing levels of graphics, explosions and interaction.
You could find lots of demos for the Nintendo Wii.
The Xbox 360 booth was mainly for Xbox Live and some new releases. I asked about Kinect, the new Microsoft peripheral for detecting motion. It was not on the exhibit floor at the convention center. The reps in the booth thought it might be at the Hard Rock Hotel nearby. I did not have time to go there. There were demos for Sony’s PS3 Move System. This looked like a lot of fun. The controllers appear to be two wands with balls on the end that light up – one red and one blue. Unlike the Wii’s “nun-chuck” style controller, Sony’s controller wands are not connected by a wire.
Now it is a matter of having enough games by the holiday season that can take advantage of Sony and Microsoft’s latest motion controllers for these to take off.
The PC gaming area was a bit smaller than prior years. There were no contests or other type of participatory activity as in the past. Nothing stood out in terms of HW. This mainly showcased new game titles.
Interestingly, I happened to find Nvidia’s offsite demo at a leased store front while walking around San Diego’s Gas Lamp District. That’s how big Comic-Con has grown. There has been so much overflow from the Convention Center. Nvidia was showing off its 3D GPU technology for the PC platforms. Even the least expensive GTX460 (MSRP $199) gave impressive results. The top of the line GTX480 is priced $499 retail, which seems quite reasonable considering what it offers. Nvidia was showing off it 3D wrap around technology using two GTX480 cards and three monitors. My resident expert (college age son) was very impressed with everything shown.
3D TV
I saw 3D for gaming on the PC platform, as noted above concerning Nvidia. There was a Sony PS3 demo for 3D gaming which required a 3D TV monitor (Sony Bravia). However, there were no demos for 3D TV itself. Sony is a major exhibitor at Comic-Con. A few years ago Sony was promoting HDTV and Blu-Ray. Those have become mainstream so they are not at the show anymore. Any new consumer electronics needs content. It appears that there is not enough 3D TV content yet. Based on what I did NOT see at Comic-Con this year I would say that this will NOT be a 3D TV Christmas. It may be another year before 3D TV will be ready for primetime.
Other interesting gadgets and observations
Walking around Comic-Con I saw more attendees with various personal electronics. In addition to notebook PCs, smartphones and iPods, I saw several people with Kindles, other e-Readers and iPads. There was a lot of tweeting and more going on. The Wi-Fi network at the Convention Center was clearly taxed.
I saw an interesting product being demoed. Intel was promoting its SmartTV design. It is based on the Atom Sodaville CPU. The box interfaces with the TV STB and will display a rolling matrix of panels showing available channels and content stored on the DVR. It is expected to hit the market at the end of 2010.
Game developers continue to push the graphics and interactivity. Companies like Intel and Nvidia are innovating for consumer electronics. There are more 3D movies being produced. Eventually this will lead to greater demand for 3D TV. Comic-Con 2010 shows again that content is king.
Tony Massimini, Chief of Technology
tonym@semico.com
Last week Semico’s Tony Massimini escaped the scorching 110° F (43°C) Phoenix temperatures and combined a work/vacation by attending ComicCon 2010 in San Diego, CA. He brought back five great video clips covering Intel and nVidia as well as his views on things to come. See all five videos at the links below. Tony, where’s your Klingon costume? OK, that’s last century. How about an Avatar outfit?
*Semico's MAP Model is an online database that tracks dozens of end-use markets including forecasts, BOMs, ASPs, TAMs, and Wafer Demand. To learn more about this service, click here
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