We’ve all heard that the handheld market is just like the PC market
was, and the analogy is based on processors getting more powerful and
more applications being added to the platform. It’s true that there
are some similarities, and the handheld industry has benefited from
some of the learning curves of the PC.
Among the similarities between the PC and the HH are color bit-mapped
screens. The introduction of color bit-mapped screens gave the PC market
growth a kick and it had the same effect on the handheld platform. However,
cameras had a tremendous kick in the sales curve for handhelds, and
they didn’t have much effect at all on PCs. Similarly, PC screen sizes
grew in size and resolution, while handheld screens are limited in physical
size and are just now approaching VGA. SoCs are critical to handhelds,
and hardly used in PCs.
But graphics, and especially 3D graphics, which helped the PC, will
unquestionably help the handheld platform. The advances in graphics
on workstations and PCs over the last 15 years have to a large extent
been applied to the handheld platform in just a few years, albeit with
certain reductions to save memory size and/or computational load.
And it’s been that challenge, and subsequent successes meeting the
challenges, that has attracted so many companies to the handheld market.
Indeed, at this point the similarities start to accumulate. Just as
we once saw in the PC market, we see an explosion in suppliers who either
are building, or threatening to build 3D hardware accelerators. There
are three ways to get 3D hardware acceleration to a handheld system:
with a co-processor like the type Alphamosaic, ATI, and Nvidia are offering;
with an application processor with dedicated graphics acceleration like
Qualcomm and Renesas offers; or with an SoC like TI and Renesas are
offering and Freescale, Intel, and Qualcomm and are working on, which
have embedded IP from some graphics IP company like ATI, BitBoys, DMP,
Falanx, or Nvidia.
We now have 33 companies that are in one or more of these categories
(but counted only once). Contrast that with the PC market, which reached
a peak of 75 companies offering a 3D accelerator, and which has now
consolidated down to seven including IGC king, Intel.
FIGURE 1. Graphics market value.
The graphics chip market, which extends to other devices besides PCs
such as POS terminals, medical, and industrial systems, and gaming machines
(which in total are about 20% of the PC/workstation/server market),
is worth something over $5 billion (see Figure 1).
Although the handheld market will exceed the PC and Other market in
annual shipments by 2.5:1 or more, the ASP of handheld graphics is much
smaller than the PC’s graphics ASP, and will sink to an order of magnitude
smaller as the market shifts from coprocessors to IP and SoCs. The PC
and Other market ASP will not gain much in the coming years, due to
pricing pressures and more IP-embedded sales (e.g., all the new game
FIGURE 2. Handheld graphics market vlaue.
Our forecast for graphics accelerators, discrete and embedded, in handheld
devices shows dramatic growth this year, and then a decline due to the
move to embedded solutions (see Figure 2). Note that this curve, although
counter to every market curve you’ve ever seen, and certainly not in
agreement with the overall handheld market curve, represents just the
graphics value and not the total multimedia market or the total sales
of the companies involved in these markets. For example, companies providing
graphics may also be providing the total SoC and/or the baseband processor—so
don’t panic, the sky’s not falling.
The point I’m trying to make is that, although we are predicting incredible
growth in numbers for handhelds and for graphics/media accelerators
for those handhelds, the platform ASPs and the subsequent percentage
of the BOM for the graphics/media accelerators is not as large as the
venerable PC and Other market.
Companies not doing well in the PC space, therefore, are not advised
to go running into the handheld market with its smaller ASPs and overpopulation
of suppliers. Yes, this is still the early days of handheld graphics,
and yes, it is during these chaotic periods that great strides and sometimes
fortunes are made, but it’s going to be a little different this time
around. The companies already in this market—the DSP, baseband,
and radio suppliers—are already big, really big, companies. They
are not going to be muscled out by clever pixel-pushers from PC land.
They will assimilate those companies or just squash them. The handheld
market is, and will be characterized by partnerships, licensing deals,
and a lot of acquisitions and mergers.
The handheld market isn’t just like the PC, not at all. The PC market
was wide open and wild; the handheld market comes out of a staid and
established industry run by giant companies with dramatically different
business models, qualification procedures, regulations, and standards,
and the most incredible market growth ever seen. If you can hitch onto
this train it’s going to be one hellofa ride.