As Joanne said, CES was all about the touch screen display – and yes, its very minority reportish.  Putting this one on my wish list.

For example, Kurt Smith, a VP of Verizon Communications Inc., believes a mature supply chain requires three levels: the content creators/manufacturer, the distributer, and the retailer — for no other reason than that’s the way it’s always been done.

Verizon is already behind. This is a lag built upon a generational gap that we can only vaguely understand. For those of us who didn’t grow up with the Internet, the texting of the newer generation is confounding. Worse, today’s toddlers are using iPads in the cradle, so in 10 years the gap will be even larger and more confusing.

And yet, the majority of the panel sessions at CES were filled with old white men. I saw no minorities on the panels. There were two women in the sessions I attended, one older woman who wasn’t even familiar with the panel she was moderating, and another who seemed more afraid of technology than anything else, a disturbing lack of diversity that didn’t reflect the audience in any way.

On the show floor, it was shown just how this disparity is playing out.

George Haber, CEO of Cresta Tech, said, “If it can be done in software, it will.” And to expand upon that, if your product can be replaced with software, it will be, and you’re already behind in this new world. Additionally, this new ecosystem also revolves around a DIY generation: We install our own smart home products; we do our own plumbing; we fix our own phones; and we, the consumers, make hardware obsolete.

Fujitsu is one “victim” of this generation. At CES it showed a tablet that could be completely submerged under water. The downside: The tablet is much more expensive to buy, and if there are any cracks, it must be sent away for Fujitsu to fix. Meanwhile, a product like Liquipel is about $70 and does the same thing with a nano coating. A DIY solution vs. a hardware solution.

We’ve entered this new frontier because we’ve reached a tipping point in technology. When phones start having quad-cores it’s time to admit the “device wars” are over. Other than some tweaking here and there with battery life and sound, how is a company supposed to differentiate itself? Enter, the digital ecosystem “wars.”

The companies at CES reacted to this switch-over in varying ways. Sony Corp.  brought nothing new or interesting to the table in terms of hardware. Instead, it focused on its own ecosystem in an attempt to show consumers how its software is better than Microsoft’s or Apple’s.

Nokia Corp. reacted to this switch-over with a sigh of inevitability. The new ecosystem is narrowing in on the digital home, which the Android and iOS have completely covered. Nokia never made inroads into that market, so it’s done the only thing it could to set itself apart and to keep fighting as one of the largest phone manufacturers of the world: It partnered with Microsoft Corp.

In the fight over you, the consumer, Nokia knows the ecosystem you’ll chose eventually is the same one you’ll ultimately use on your TV, your tablet, your smart home interface (which might be a gaming device, a tablet, a blu-ray, etc.), and your phone.

But maybe you’ve already chosen your ecosystem. Maybe, for you, the battle is already over. In which case, where is our Apple TV?

But the truth is, DRM defines how a user will interact with technology. And it defines how different devices are able to communicate. Can you play that movie you downloaded on your tablet, smartphone, or TV? That’s DRM, and it’s also the digital ecosystem from a consumer’s point of view.

One of the themes from this year’s Consumer Electronics Show was that we’ve moved beyond devices. Moore’s Law has ensured that we’ve reached an age where one notebook or another is pretty much the same. So the struggle for the hearts of consumers is now about convincing them which ecosystem, or user interface, is the best for them. That will decide what phone they buy, which TV, which tablet, etc. And all of this is built upon DRM.

So what did CES tell us about DRM? That it’s going to be a long, hard battle for our rights as consumers during the next five years. I say this, not because anyone at CES told me, but because of how the security sessions went. Led by a Department of Homeland Security moderator, the mobile security panel showed that they’re afraid of technology, and that their solution to all the security problems out there is to tether us more firmly to the grid. Every step you take will require authentication.

But security is gained by being as far off the grid as possible, not by being tethered to it. All in all, the worst idea I heard at CES, for our “safety,” was the idea of tethering our debit cards to our smartphones so that you can only use your debit card if your smartphone is right there with you. For your safety. Or extreme annoyance.

Yet, did anyone on the panel discuss Sony’s loss of its PS3 customers’ personal data? Personal data that it stores for its customers’ “security”? No. As consumers, our biggest security vulnerability comes from the corporations. The lists of passwords and usernames we’re forced to create, along with the PINs and security questions — those are all security leaks waiting to happen. If I lose my computer, my data is lost and my identity may be compromised. If Sony loses its computer, millions of people’s data is lost.

So why is the security discussion focused on me and my computer instead of where the real problem is?

If you’ve read any of my previous articles, you know I’m not a big fan of cable. So my short, biased answer to the question at the top of this article is yes. The more convoluted answer is “Probably, if you’re willing to test out some hardware.”

Luckily, even though there still isn’t a “plug and play” system that fits 100 percent of our needs, the cable-free landscape is improving almost daily.

These changes in the landscape are due in part to the increased interest in mobile technology. Total OEM revenue from mobile devices is set to top $565 billion by 2015, with consumers flocking to smartphones, notebooks, and tablet PCs. The main factor in this growth is broadband access. Silicon Image Inc. expects its mobile HD technology (MHL) to be incorporated into 200 million mobile devices by the end of 2012. That’s a lot of high-definition streaming, from mobile devices to TVs.

In addition to increased access to streaming via mobile devices, content is now readily available online, though I’ve found a subscription to a DVD rental or streaming service becomes useful. Netflix, Amazon, and Hulu all charge about $8 a month for unlimited streaming. They have limited libraries, but you can supplement their content by going directly to the networks’ Websites, where recent episodes are available for free and usually within 24 hours of airing.

Not having had TV since 2007, I’ve gone through each new content distribution trend, and I am excited to see the technology getting closer to my ideal scenario month after month. More and more people are abandoning cable, and eight of the nine largest cable providers lost subscribers last quarter.

This trend is making the content providers nervous. Hulu, for example, was having a great run — new shows were posted sometimes within hours of being shown on TV. Then the networks got scared. Even though Hulu generates advertising revenue from commercials, some content providers abandoned the platform. Even Starz is pulling out of Netflix, and there is talk of waiting 60 days before releasing new DVDs for rentals.

At first glance, this seems like a step backwards, but we can’t forget that “pull” is more important than “push” in winning these technology battles. When consumers pull a technology (like mobile streaming) into the market, it has stronger staying power than when companies try to push a technology (like 3D TV).

In addition to the increased mobile access and the nearly limitless content, let’s not forget the cost savings. If you want all 200 channels, Comcast will charge you $85 a month. Then there is the DVR, which can cost up to $500 for the box in addition to a $20 monthly service fee. The total cost of a cable subscription for one year is potentially $1,760, and over the course of five years, you’re looking at saving roughly $7,000. The average person spends $720 a year on Internet service, which means you can basically get cable for half the price you’re paying now.

Our own Joanne Itow recently hooked up an old laptop to her TV. That simple first step is saving her $80 a month. Four months later, the only thing she misses is the remote control — something she’ll soon rectify when she finds the perfect Smart DTV.

So join the party, and ditch your cable.

This month, we are making a section of that report available to you as a free download.  Included in the White Paper is our IPI chart along with a section of the Mobile Devices: Analog discussion.  We invite you to download this free informative report, and contact Debi Antoni with any questions about our forecast.

Semico Forecasts 2011 Revenues will be Down 1.4%

These numbers are pulled from our MAP Model database, Semico’s way to track semiconductor migration within end-use markets. This method accounts for about 80% of the overall market.

Our overall Analog numbers include the following categories:

• Standard Linear
• Amplifiers
• Interface
• Voltage Regulators and Reference Circuits
• Data Conversion Circuits
• Comparators
• Application Specific Analog ICs (Small Scale Complexity)
• Application Specific Analog ICs (Medium Scale Complexity)
• Application Specific Analog ICs (Large Scale Complexity)

All of these categories combined will reach $61.9 billion, a 7.9% increase over 2010’s $42.4 billion.

Breaking this number out farther, we can see that in 2010, the consumer market accounted for 33.3% of the Analog market, but in 2015, it will only account for 23.4%. Where is that Analog migrating?

To smartphones.

In fact, “High Performance Analog IC: The Catalyst for Electronic System Success,” is the title of Jim Feldhan’s speech for the annual Analog Semiconductor Leaders’ Forum being held on October 13th, 2011 in South Korea. It is being held during i-SEDEX at the Korea International Exhibition Center. This Forum is the place to learn about high-performance analog trends.

Handheld gaming has had problems over the last few years because high start-up costs keep competition at a minimum.  Microsoft, Sony, Nokia, and a score of small companies have tried, and only Sony has managed to compete against Nintendo.  This lack of competition could be a reason why this industry was so prime to be taken over by smart phones.

The most popular Nintendo games can sell between 15 – 25 million units.  Angry Birds has had 200 million downloads.

According to Guardian, some of the best smartphone games of 2011 (with their prices) are:

• Chillingo, iOS (link here), £1.19
• Namco Bandai, iOS (link here), 59p
• Simogo, iOS (link here), £1.79
• Ragtime Games, iOS (link here), 59p
• SilverTree Media, Android, free (with in-game payments – link here)
• EA, iOS (link here), £3.99
• IdeaWorks Game Studio, WP7
• Nyarlu Labs, iOS (link here), £1.19
• Spilt Milk Studios, iOS (link here), £1.19
• Kairosoft, iOS (link here) Android (link here), £2.39
• SouthEnd Interactive, WP7
• Gamevil, iOS (link here), Android (link here), 59p
• YoYo Games, Android, iOS (link here), Android (link here), £0.59

Though this list is based on nothing more than the preferences of their readers, it is a good indication of the differences between the types of games available on phones and those available on handhelds, especially the price difference.

Meanwhile, for handheld games, the Japanese magazine Famitsu lists the best selling handheld games for the first half of 2011:

• [PSP] Monster Hunter Freedom 3 (Capcom) – 968,269 (4,449,258)
• [NDS] Dragon Quest Monsters: Joker 2 – Professional (Square Enix) – 469,469
• [PSP] Dissidia: 012 (Duodecim) Final Fantasy (Square Enix) – 454,522
• [PSP] Dai-2-Ji Super Robot Wars Z: Hakai-hen (Bandai Namco) – 364,881
• [PSP] Phantasy Star Portable 2: Infinity (Sega) – 352,511
• [PSP] SD Gundam G Generation: World (Bandai Namco) – 332,278
• [NDS] Pokemon Black / White (Pokemon Co.) – 303,299 (5,218,112)
• [3DS] Professor Layton and the Miracle Mask (Level 5) – 301,156
• [PSP] Tales of the World: Radiant Mythology 3 (Bandai Namco) – 275,202
• [3DS] Nintendogs + Cats: French Bulldog / Shiba / Toy Poodle & New Friends – 244,048
• [3DS] The Legend of Zelda: Ocarina of Time 3D (Nintendo) – 223,260
• [NDS] Ni no Kuni: The Ebony Wizard (Level 5) – 217,847 (550,158)
• [NDS] Ace Attorney Investigations: Miles Edgeworth 2 (Capcom) – 214,994

The average price for a handheld game is between $10 – $40, with newer games closer to $40, a significant difference from the listed smart phone games.

There are two types of gamers out there – “Casual” and “Hardcore.”

Casual gamers are a huge market, and with the Wii, Nintendo specifically targeted this demographic.  But for handhelds, smart phones did a great job of grabbing this market with easy-to-play games that used the phone’s touch screen to innovate game play.  Casual gamers have made the smart phone the number one handheld gaming device, bumping the Nintendo line down to number two.

According to Adrienne, the head of a casual gaming household:

“My 7 year old has wanted a DS for the past few years, and may just get one for Christmas this year.  However, we’ve been thinking that an iPod touch might make more sense.  Not a lot more money, and the apps are so inexpensive (free-$5) compared to the DS games ($15-$35).  By the time we purchase a few games for him, we’d be at the price of an iPod Touch.  And the DS still uses a stylus?!  A stylus and game cartridges are just more things to lose.  Plus we already know he loves Angry Birds.”

Adrienne’s point of view ends by referencing a game that really draws her kids to the smart phone platform.  So is there a game on the Nintendo side kids are anxious to play?  Not at the moment, though in the past there has been Nintendogs, Pokemon, Animal Crossing, Mario,  Zelda, etc.

If we look at the line-up above, we can see that Nintendo is in a big gaming slump, with none of the best selling games for 2011 coming close to the 15 – 25 million units previous best sellers have sold.  This slump is making the handheld market look bleak, but if Nintendo can push out a best seller within the next year, then Semico believes they’ll maintain a significant portion of the market share.

On the other hand, Nintendo is facing a lot of pressure to start porting their games to the iPhone.  If they give into pressure, then their hardware sales might as well be finished.

And while content is still king – it’s not the full story – how has the hardware side been fairing?

Japanese hardware sales are usually a pretty good indication of what is going on in the market, though their recent numbers have been affected by the earthquake – sales are down and slightly off from usual.

Shipments between the 1^st and 8^th of August:

• PSP: 35,619 [DOWN] 1,040 (2.84%)
• PS3: 18,338 [DOWN] 2,366 (11.43%)
• Wii: 17,004 [DOWN] 1,228 (6.74%)
• DSi LL: 4,176 [DOWN] 1,091 (20.71%)
• 3DS: 4,132 [DOWN] 12,283 (74.83%)
• DSi: 3,900 [DOWN] 725 (15.68%)
• Xbox 360: 1,406 [DOWN] 210 (13.00%)
• PS2: 1,529 [DOWN] 65 (4.08%)
• DS Lite: 102 [DOWN] 36 (26.09%)
• PSP Go: 0 [DOWN] 7 (100.00%)

The main thing to take away from that list is everything is down down down.

PSP is doing great in Japan, a more recent trend, with almost all PSP sales now shipping there.  The DS line in total is 12,310 units, about a third of the PSP shipments.  The recent release of the 3DS has been a complete let down for Nintendo, partly because the earthquake happened so close to its release date, and partly because it has too high a price point and too few games.  When this changes, these numbers should bump up, something Nintendo is counting on as they continue to slash the 3DS price.

So, the complete story is – don’t give up on Nintendo yet.  Semico’s forecast leans to the more optimistic outcome for handheld gaming, because Nintendo has a history of turning things around after most everyone has given up on them.

But we need to keep in mind two caveats:

• If Nintendo lets smart phones dictate the game release line-up, then in a few years Nintendo will be at current PSP numbers worldwide, with the decline continuing thereafter.
• If Nintendo ports their games to smart phones, then the decline is going to happen even sooner.

-Michell Prunty

The theme of FTF 2011 presented by President and CEO, Rich Beyer, was connected intelligence and the “internet of things.”  He pointed out that connectivity emphasizes efficiency and integration.  The data traffic continues to grow at a rapid rate.

Throughout FTF presented solutions for various markets such as mobile communications and consumer products, networking and telecommunications, wireless infrastructure, automotive, smart grid, industrial control and health applications.  Embedded control is at the center of this surrounded and supported by connectivity, sensors, power and software solutions.

Highlights

The following are some of the notable products presented at FTF 2011.

The processors are branded as QorIQ and QorIvva are based on the Power architecture.

QorIQ AMP (Advanced Multi-Processor) has a new advanced e6500 core (64-bit) with advanced multi-threading, advanced accelerators, upgraded communications circuits and upgraded on-chip fabric.  The family will be scalable across three different categories: high-end data plane, high-end control plane and low-end data plane.  It will be the first product from Freescale manufactured on 28nm.  The company claims it will deliver 3x the performance over its current offerings and at half the power consumption.  The first implementation is the T4240 with 12 dual-threaded cores, planned for availability in early 2012.  More variants will be released following this one.

QorIQ Converge is the first multi-mode wired base station on a chip.  It is a multicore communications processor (e500) integrated with a StarCore DSP, application accelerator, security acceleration and antenna interface.  QorIQ Converge was first announced in February 2011 when it was made available for evaluation and initial development.  It is manufactured on 45nm with a roadmap for 28nm.  The big news is that QorIQ Converge is the basis for Alcatel-Lucent’s LightRadio.  This is a femtocell the size of a Rubik’s cube.  The LightRadio covers a 2 block area and can be deployed anywhere there is power and a broadband connection.  The cubes can be scaled in arrays of different sizes to fit different customer needs.  The first SoC samples of QorIQ Converge are planned for 3Q 2011.

Qorivva is a Power Architecture based 32-bit MCU targeting automotive applications.  It was announced about a week before FTF 2011.  The initial application is for parking assist.  The Qorivva transmits high-resolution compressed video data over Fast Ethernet for a 360° view around the vehicle to help make parking simpler and safer.  It is manufactured on 90nm.  Freescale announced at FTF that future products with advanced 55nm Flash for higher density will be taping out.

i.MX6 is the next generation of the Freescale ARM-based processor family.  These are found in many portable applications such as eReaders and automobile infotainment systems.  The i.MX6 features the ARM Coretex A-9 core scalable for 1,2 and 4 core versions.  It also has three graphic engines which can handle dual stream HDMI 1080p and an LVDS port.  It is manufactured on a 40nm process, the first for an i.MX part.  First silicon was on display at FTF.  Customers are likely to be shipping products in 2012.  Freescale had a demo of the first silicon of i.MX6 that was only one week old.  The demo showed a quad core i.MX6 running two large screens (1080p HDMI) and the LVDS all separate videos.  It was truly an impressive sight especially since it was first silicon and a very small platform.

There were developments on sensors.  Freescale announced its first pressure sensor for mobile applications, the Xtrinsic MPL3115A2.  This measures barometric pressure and is an essential component for location based services for smartphones and other mobile devices.  For example, inside a building one may lose a GPS signal.  The pressure sensor can determine the user’s altitude.  The MPL3115A2 has a 30cm resolution and a range that covers 656 meters below sea level to 13 Km above.  FYI – Mt. Everest is just over 8.8 Km.  The trend for smartphones is for several sensors working together for multiple degrees of freedom.  Both a magnetometer and an accelerometer are needed for true eCompass function.  There was a technical session on the MAG3110 magnetometer discussing the details of implementing it in a smartphone.  Freescale does not have a gyro for smartphones, but at FTF several Freescale people did say one was coming soon.

Semico Spin

Freescale let its position in embedded control start to slip several years ago.  The company has been aggressively rebuilding and re-inventing itself.  Over the last few years its financial position has been steadily improving while it continues to beef up its product portfolio.  FTF 2011 showcased many exciting developments across a broad spectrum.

Tony Massimini

Chief Technology Officer

tonym@semico.com

602-997-0337 X3

Here we go again, right back where we’ve always been.  In the 1980s the Apple Mac OS was the best operating system on the planet, and Apple was heading toward a dominant share in the personal computer market.  Microsoft MS-DOS had a text interface with arcane commands rather than an easy to use graphical interface.  The IBM PC was just getting off the ground.

But, a funny thing happened on the way to market dominance.  Apple decided to keep the MAC OS and the MAC architecture proprietary.  For some inexplicable reason IBM, historically a company that kept everything to itself, decided to make MS-DOS and the PC architecture open systems.  A series of clone manufacturers emerged; and, as the Microsoft operating system evolved, it became overwhelmingly more popular with developers.  Easy to see why!  Their potential market was much bigger.

Today, Apple has a dominant share in the smartphone market.  Apple has also created the tablet PC market and dominates it.  The Apple iOS (born as the iPhone OS) is the best smart phone operating system on the planet.  It has been ported to the iPad, and it is the interface with the Apple App store for both the iPod and iPad.  The App store has far more apps available than any other site.  The iPod, the iPad, iOS and the App store are all proprietary.

Can’t anyone see this train wreck coming?  For now, the Apple App store is the most popular smartphone app site and iOS is by far the most profitable platform for developers.  But Android is winning the battle of smartphone market share.  There’s every indication that far more Android phones than iPhones will be sold as time progresses.

For now, app developers are frustrated, because they have to develop code for a wide variety of smartphones that use Android.  But, we’ve been here before.  Eventually, cell phone manufacturers will coalesce around a standard; and the market for apps written for that standard will be much, much bigger than Apple’s iPhone/iOS market.  A similar situation exists for tablet PCs.

Steve Jobs is a marketing genius, no argument.  He has created at least four major markets: easy to use personal computers, MP3 players, downloadable music and smartphones with display-based interfaces.  He’s working on a fifth, tablet PCs.  But, there’s a blind spot.  Unless the iPhone, the iPad and iOS are opened up, they’re going to be doomed to minor market shares.  Then Apple is going to have to invent the next big thing – all over again.

Michell Prunty: Trailblazing a New Future!

I’ve used both the iOS and the Android OS, and I have to say, I disagree that Apple is repeating mistakes, and here is why.

The current and past software market for the Mac and PC is very different compared to the app market for smart phones.  There were very few options for software for the original Mac, and Apple made it difficult to port over games, one of the reasons why the PC became to so popular.  The smart phone market however, as a centralized market where anyone can write and upload software to a hub.  Unlike with the computing market, there are no limits to the types of tools that can be found on the Apple app store.  Currently there are over 350k different apps available, and all of them have undergone QA testing, something other open source app stores are lacking.  Its hard to argue developers aren’t willing / can’t develop for the iOS when the numbers are this high.

Speaking of the QA for the app marketplace:  The Android app market is suffering because of its open source nature; anyone can develop on it, leading to a wide variety of bad software available for download.

The open source nature of the Android is also the source of its lag issues.  Apple has gotten around lag because they control the entire manufacturing process, and has even bought out some of their suppliers.  As they control the system from the ground up, there is no bloating in the software.  Android is the exact opposite; their OS becomes bloated in order to run on a variety of different hardware configurations.  Google acknowledges their open source problem, and has made Honeycomb, aka Android 3.0 closed source.

Now its true Apple has lost some market share due to its closed nature, but I would suggest that its lost more market share due to AT&T’s inability to create a stable infrastructure, the main complaint of iPhone customers.  Many deliberately waited for Verizon to take up some of the load.

Additionally, the target market for smart phones is vastly different than the target market for the early computers.  Old, young, tech savvy or not, there is a huge market for those who just want a plug and play system with no lag, and don’t care if they can develop for it or not.

When the iPad first came out, I had a few problems with it.  For example, it doesn’t support Flash, something Android does support.  Apple has addressed this issue by successfully arguing for the implementation of HTML5, a popular, and some would argue better, alternative.  As more sites port over to HTML5, and it becomes a standard, Flash will be a relic.

In terms of market share, the OS that will dominate the market is the OS that is licensed to the majority of products, so like Windows, Android will take on a great market share over time.  But this doesn’t mean Apple will slip down to <10% of the market, it just means there is still room for competition.  And if you don’t think it can compete 10 years into the future, remember the iPod came out 10 years ago, and its still in the number one position for PMP / MP3 market share for the US.

I am making the assumption that Apple will not rest on its laurels.  If Apple fails to continue to lead the market, then its possible 10 years in the future they will fall by the wayside, but they’ve made no indication they’re ready to give up the game.

Freescale’s Senior VP and GM of the RF, Analog & Sensor Group, Tom Dietrich, joined us for another year at the Summit.  Tom is always at the forefront of what is trending in the semiconductor industry and this year was no different as he introduced us to Freescale’s vision of a sensor-based future.

Over the next few years Freescale sees the future changing the world, and Freescale will be leading the change as they focus on four growth markets: Automotive, Networking, Industrial, and Consumer while they leaverage three growth trends: The Net Effect, Health & Safety, and Going Green.

For the consumer market we can see how sensors are changing the way we interact with our electronics just by looking at the iPhone and the top ranking apps.  Games now rely on the touchscreen, some rely on tilting the phone, others respond to shaking.  Add this in with networking and we have Cloud Computing.  For example in Japan, a good way to use sensors in cell phones is to have an earthquake app that can combine data from everyone’s phone to a central hub where the data will be analyzed to predict more accurately when and where the next earthquake will occur.  And considering that seismologists are warning of another magnitude-8 quake, this is a feature of sensors that can save lives.

Another feature for the consumer market Tom discussed was Augmented Reality for games.  For example, with sensors, a gamer at home may compete with the pros on the course, using the pros real time moves to compete against in their game.

In the automotive industry, Tom discussed how sensors will help cars, namely with radar, to have a cooperative highways, where cars will proactivity monitor other cars’ locations in order to stop accidents before they can occur. Another life saving feature changing the way we interact with hardware.

Even the healthcare industry benefits from sensors, with in-home monitoring becoming more widely available, allowing doctors and nurses to monitor a patient’s health and quickly react to changes.

While all these ideas are exciting to the average consumer, for Freescale, sensors are a puzzle to solve in how to add more capability to sensors, while continuing to rely on minimal power.  And it looks like they’ve done it.

Michell Prunty,

SR Consumer Analyst