3GSM, the gathering of the mobile phone industry in Europe, opened with sunshine and big ambitions. The town is booked solid with big-shot executives begging for reservations for the hot restaurants on Valentine's Day like winos after a three-day binge.
3GSM this year promises to follow on a year of big deals with a year of consolidation and even bigger deals.
The end is near, at 3GSM this year
By Dr. Jon G. Peddie
I'm in Barcelona this week at the 3GSM show. Barcelona is a wonderful city, full of art and culture, and a clock that seems set about two hours behind the rest of the world (early dinner starts at 8:00; lunch sort of begins around 2:00).
I'm here to look for proof of my pending next report about the end of the multimedia processors and the demise of the multimedia IP market in handheld-land.
You may recall in our definitive work on multimedia semiconductors for handhelds that we published about a year ago, we identified 33 companies that were selling co-processor chips, IP, or super application processors (some companies selling multiples but counted only once).
And, as you know, in the last 18 months or so, we saw Broadcom swallow Alphamosaic and disappear it, Epson seemingly disappear by itself, and NeoMagic go missing. Emuzed was acquired by Flextronics, MtekVision acquired the technologies of Atsana, STmicro's name is no longer heard in conversation, and earlier Zoran acquired Emblaze. Bitboys has snuggled up closer to Nokia, ARM is about to acquire someone, and two other big semi companies we dare not mention the names of are looking and in various stages of due diligence for an acquisition, plus all the rumors we (and probably you too) have heard.
So by this summer, after CTIA, I think we'll be ready to issue our update on our report and we'll probably be at or under 20 companies then. This has the effect of raising the prices a bit as the sought-after companies get more than one offer, and for some of those candidates, it can't happen too soon as cash reserves diminish and we find some that are fire-sale candidates and some in bidding wars.
Several things are causing this shakeout. The most obvious is that too many suppliers are chasing too few customers, and those customers are wanting all the best features from every supplier. The other reason is the surprise of many (dare I say arrogant) suppliers thinking they had everything needed technologywise and learning the hard way, at the expense of their investors, that they didn't have everything and had to invest more R&D, driver development, tech support, and in some cases totally new technology like H.264 that actually worked.
The big three IP/co-processor suppliersATI, Imagination Technologies, and Nvidiawill be showing off their gains over the year and demonstrating what they learned (they all got shocking cases of hard education since last year). Steadfast second-tier companies like Philips, Bitboys, Zoran, Broadcom, and Takumi are still working in their semi-captive roles with one or maybe two handset manufacturers, and we may hear one or two stories about some of the other players, but I doubt it. Let's put it this way: they sure as hell aren't knocking down our doors to brag about things.
So I'm on the hunt, looking for road kill and I expect to find plenty. Our next report will list who and what we saw here, and then we'll follow that up with the CITA show in (ugh) Las Vegas.
And let me put you on notice. If you don't seek us out and tell us something, you're going on our obituary list.
Now have a nice showit's probably your last.