The interconnection between what operators, consumers and handset vendors want of their handsets can make life complicated for the chipset vendors upon whose technology the phones are built. The trick is to stay flexible, Mobile Europe finds.
According to In-Stat/MDR, the last few years have been very good ones for handset chipmakers, as new technology has quickly been integrated into many handsets, prompting users to upgrade.
This, combined with continued subscriber growth, worldwide, especially in emerging nations, means the number of new handsets produced each year continues to increase at a rapid rate. However, the firm also reports that supplying components for this market can be challenging for handset chipmakers, because not only can consumers’ tastes change at a rapid pace, but also because handset component content can vary greatly from one region to the next.
The cellular handset has been going through a complete evolution in the last few years, keeping handset chipmakers on their toes while they attempt to forecast what will be the next big thing. When a technology does take the fancy of consumers and carriers, history shows us that the content of a handset can change quickly. For example, cameras in phones went from zero to over 150 million in just two years. Other technologies can, and will, move just as fast.
Behind the trends in handset components are the trends in the handsets themselves. These trends, in many cases, are not driven so much by what consumers are demanding in their phones, but by what carriers want consumers to have in their handset, so that the carriers can reap the services revenues from these features. At the very least, carriers want their handsets to be attractive to potential customers, so that these carriers can steal away business from their competition. This “phone-feature tango” has been very tough on both handset makers and handset chipset makers alike, since each carrier wants a list of features that are different from the features offered by their competitors. Since both chipmakers and device makers lower their prices by standardizing a set list of features and producing them in high volumes, the carrier’s need to differentiate can be in direct conflict with the hardware maker’s need to standardise.
in accordance with the increasing demands consumers and operators are making of their handsets, In-Stat/MDR has also found that the number of application processors used in handsets is expected to increase dramatically, from 18.725 million this year to 92.070 million in 2008.
In terms of which technologies are about to experience the camera-phone effect, the MPEG-4 chip market for handsets is ripe for growth. With not only video and camera functionality driving demand, but, eventually, Direct Broadcast (DB) services starting to appear in handsets as well, MPEG-4 chips fill the need for those mid-tier handsets supporting these services.
Bluetooth is another area where chip makers will see high growth. By some estimates, by 2008, roughly 56% of all handsets shipped will have Bluetooth capability.
To this you can probably add ever-more complex graphics capability to support advanced gaming applications.
Having said all that, Portelligent, which produces reports on the chip content of mobile handsets, has found that UMTS handset designers have substantially reduced the average complexity and manufacturing costs of UMTS cellular phones over the past year. The first generation of UMTS handsets, which supported both the conventional GSM and high-speed W-CDMA protocols for wireless communications, were plagued by high system complexity and high cost when they were introduced in 2003, as well as by consumer complaints about product size and battery life.
According to the findings of “product teardown” analyses conducted by Portelligent on 11 UMTS handsets introduced in Europe over the past 18 months, products that have appeared in the marketplace since the beginning of 2004 reduce the average number of electronic components found in the handsets by over 25 percent. The average number of high-value ICs in the 2004 products — which are a strong driver of overall manufacturing cost — has declined almost 50%, as handset makers achieve more integrated designs, and as semiconductor makers come to provide more mature chipsets and technology platforms for UMTS products.
In addition to the progress demonstrated in the transition from first-generation to second-generation UMTS handsets, 2004 UMTS products are much more competitive across a broad spectrum of system complexity metrics with handsets that support other so-called “3G” protocols, such as CDMA2000 and the W-CDMA FOMAphones offered in Japan by NTT DoCoMo.
While UMTS phones introduced in 2003 substantially exceeded W-CDMA/FOMA and high-end CDMA2000 products in average IC count and total electronic component count, 2004 UMTS handsets bring overall component count to a much more comparable level, and have actually lowered average IC count below that of the feature-rich FOMA phones that NTT DoCoMo has introduced in Japan this year.
“In 2003, detailed product teardown analysis of the electronics BOM (bill-of-materials) and component technologies painted a bleak picture for UMTS,” notes Howard Curtis, vice-president of Portelligent. Given the very high estimated cost-of-goods sold numbers we were finding in the first-generation products, we just didn’t see how the carriers were going to be successful in jumpstarting the 3G market.
“The NEC e-606, for instance, which contained 108 ICs, was the most complex cell phone Portelligent has ever encountered. But the second-generation products demonstrate higher levels of system integration and design maturity. On balance, we have gone from downright pessimism concerning the business prospects of UMTS, to a guarded optimism,” Curtis says.
Certainly the chip makers themselves are in accord that the market is getting ever more complex. Graham Carter, strategic marketing manager of Agere’s mobility division, says that the “overarching statement” for Agere, in terms of the mobile market dynamics is that “data is becoming more of an issue as regards operators’ new applications and services”.
“Terminals are evolving very rapidly now but unlike general consumer electronics the communications aspect of the phones means there are very strict limitations on the devices. But at the same time as the applications side is developing the bearer technologies are not standing still. The match now is to evolve dual mode WCDMA/ GPRS baseband [often called modem] foundations and applications processing capability.
To square the circle Agere has developed an architecture that keeps the processors in separate domains; a communications processor, an applications processor and a signal processor..
This approach can deliver 30 frames per second video, MPEG 4, decoding and encoding, a 5Megapixel camera, 3D graphics and 40Kbps speech from the same ARM 7 core processor, Carter argues. Each processor is fully dedicated to its particular function and eliminates complications such as increased integration and debug times that often occur with solutions that offer combined communications and applications processing, Carter says.
The de-coupled applications and communications structure also offers advantages during the development phase when designers may need to revamp and enhance existing models to meet specific market demands.
Reducing the components to ARM7/ARM9 processors plus DSP also reduces the size and price of the end product substantially, Carter says.
One company with a view of the whole chain is ARM. ARM sits “at the bottom” of the value chain” as Bruce Beckloff, director of segment marketing for ARM puts it, and about 70% of handsets have some ARM IP at the microprocessor core level in them.
“The developments we start today will be five years off being in somebody’s hands,” he says. “We try to create the foundations of the technology that people can build upon.”
Beckloff identifies security and DRM as very hot areas for chip developers at the moment. As operators have bet the farm on 3G, they will need commerce and content to take off. Security and DRM will be crucial to this. One way ARM can help with this is with its TrustZone concept, in which it partitions off part of the processor — “with only one way on and one way out” — into which the chip developers or phone manufacturers can put their own security technology. This process, of embedding a process in the hardware itself is what will continue to drive development, Beckloff says.
“In the mobile phone handset you are physically constrained, you can’t just keep throwing application processors at a problem. The phone is constrained in terms of cost, size, power and battery life so if you can drive as much as possible down to the core layer then the phone can be more efficient in all aspects.”