Volume is no promise of success: 300pg JPR report on semiconductor opportunities in handheld market

Report identifies sectors for growth, predicts consolidation, forecasts trends

Robert Dow

Tiburon, California, June 5, 2007—Marketing and consulting firm Jon Peddie Research
today announced the release of its latest 300-page report, Handheld
Multimedia Devices 2nd Edition
. The report is based on
two years of extensive research and identifies opportunities in multimedia for
semiconductor, IP, software, sensors, and tuner suppliers in handheld devices
such as mobile phones.

JPR has been studying, lecturing worldwide, and reporting on
the handheld market since 2000 and has widely canvassed the companies and
individuals in this field to obtain product information, trend data, market
sizing and forecasts, and competitive issues for the current report.

“Based on our extensive survey of hundreds of managers and
engineers in the mobile market, clearly everyone is dazzled by the volume of
handheld units shipped,” said JPR President Dr. Jon Peddie. “This is a serious
mistake that has led to the failure of projects and companies as overall market
volume is no predictor of profits or success.”

Handheld Multimedia Devices 2nd Edition identifies market consolidation of suppliers (from
44 down to 26 with more assimilations and failures expected), the unrelenting
march of Moore’s Law and its impact on Co-Processors, applications processors,
media processors, and baseband processors, as well as the role of IP in the
design and development of these devices. Some of the conclusions and forecasts
made in the report are:

• Opportunities are extremely limited for
semiconductor startups, and all but closed to entrepreneurs.

• Critical mass in engineering and IP represents
major barriers to entry.

• Co-processors will be assimilated by SoCs.

• No killer app per se, but TV on mobile devices
looks very promising.

• Open standards and APIs will enable the market.

• Low-cost phones are not the highest growth
market by any metric.

• Game development will finally take off in
2007—many acquisitions of game developer companies are expected.

window is closed for startups,” says Peddie. “The operators, handset
manufacturers, and even the ODMs want to deal with big firms that will
be able to supply large volumes of parts over many years; young
companies without a solid track record present too much of a gamble.”


segments the market into three major categories:

• High End: Smart phones—open platforms and
maximum multimedia and data capabilities

• Midrange: Feature phones—closed but
upgradeable and customizable systems but with very good multimedia
and data capabilities

• Low End: Low-end phones—closed systems
with limited multimedia and data capabilities

forecasts (in millions of units worldwide) of the three segments
listed above.

CAGR 2006 2007 2008 2009 2010

High End 2006-10 CAGR: 25% 111.8 152.4 192.2 232.8 277.2

Midrange 2006-10 CAGR: 16% 297.9 349.0 404.5 469.8 532.9

Low End 2006-10 CAGR: -1% 482.6 483.0 480.0 472.9 464.5

the industry sees great promise for selling mobile phones into high-population
emerging markets, it is vital to remember that median monthly incomes
are $40 or less, “says Peddie. “It’s not exactly the pot of gold some
people think it is, even if you can build a $30 phone, but there are
indeed opportunities in low-cost phones.”

Handheld Multimedia Devices 2nd Edition includes sections addressing the following questions:

• How big is the market for Application,
Media, and Co-processors, as well as for IP cores?

• How will the market for 2D/3D graphics Co-Processor
accelerators evolve over the next five years?

• What are the market segmentations for
handheld devices, and how does one change over time?

• Will all phones have cameras?

• Will all phones have TV?

• Will all phones play games, locally
and/or online?

• Which API technology will dominate
the market by 2011?

• Which new innovative solutions
should be looked out for?

• How will display technologies
improve by 2011?

• Will games be a major market?

• What is the killer app?

• Has market consolidation
begun, and when does it end?

Companies and organizations
examined in this report

This 300-page report examines several companies and
organizations in order to get as complete picture of the
market as possible. Following are the major companies
(not all) referenced in the report.

Processor and IP companies: 3Dlabs Semiconductor, AMD,
ARM, ATI, Atsana, Broadcom, DMedia-Processor, Emblaze ,
Epson, Freescale , GiQuilla, Imagination Technology,
Intel, MagicEyes, Marvell, MtekVision, Nazomi, NEC,
NeoMagic, NexusChips, Nvidia, Panasonic, NXP, Qualcomm,
Renesas Technology, Samsung, Smedia, STmicroelectronics,
Takumi, Texas Instruments, Toshiba, VirtualDigm, and

Other companies: Alphamosaic, Alpha Imaging Technology, Analog
Devices, Bitboys, C&S Technology, Chipnuts,
CoreLogic, C&S Technology, Dibcom, Falanx, Fathammer,
Hantro, HiCorp, Hitachi, Hybrid, InFusio, LG Electronics,
LSI Logic, Microsoft, Mitsubishi Electric, Moblic, Nethra
Imaging, Omnivision, PortalPlayer, ReakoSys, Siano,
Superscape, Symbian, Varioptic, Voom, MediaQ, and UIQ

Organizations: BREW, FutureMark, International Imaging Industry,
Khronos, Kishonti Informatics, MIPI, and OMA

JPR’s Handheld Multimedia Devices 2nd Edition, contains 300
pages, 39 tables, and 167 diagrams and illustrations, an
extensive appendix and company profiles, and is available
for $4,999 for an electronic version.