Mobile Telecom Ecosystem A Study of Technology and Business Trends Affecting the Mobile Telecom Industry
By Amit Bhatt, PhD Professor, DAIICT
[email protected]
Supported by IIMA IDEA Telecom Centre of Excellence, Wing 9F, IIM Ahmedabad 380015, Phone: 079-66324885, http://www.iitcoe.in
Mobile Telecom Ecosystem A Study of Technology and Business Trends Affecting the Mobile Telecom Industry
By Amit Bhatt, PhD Professor, DAIICT
[email protected]
Supported by IIMA IDEA Telecom Centre of Excellence (IITCOE) Wing 9F, IIM Ahmedabad 380015 Phone: 079-66324885 http://www.iitcoe.in
Dr. Amit Bhatt is a Technology Forecaster and a keen observer of the impact of Technology on society. He has more than seventeen years of experience in Industry and Academia, both in India and abroad. He has worked as the Technology Enablement Manager - CTO office at ARM and as an Engineering Manager at Cadence. He has recently joined academics at DAIICT to pursue his interest as a technology trend interpreter.
Table of Contents List of Figures................................................................................................................................... 1 1. Introduction...................................................................................................................... 3 2. Mobile Handset and Tablet Market.................................................................................... 5 2.1. Mobile Handset.......................................................................................................... 5 2.1.1. Historical Background..................................................................................... 5 2.1.1.1. Mobile Phone................................................................................... 5 2.1.1.2. Tablets/MID (Mobile Internet Devices)............................................ 7 2.1.2. Market Scenario............................................................................................... 8 2.1.2.1. World Market Scenario..................................................................... 8 2.1.2.1.1. Overall Mobile Handset.................................................... 8 2.1.2.1.2. Smartphone....................................................................... 10 2.1.2.2. Indian Market Scenario.....................................................................12 2.1.3. Handset Manufacturers................................................................................... 13 2.1.3.1. Apple.............................................................................................. 13 2.1.3.2. Nokia............................................................................................... 13 2.1.3.3. Motorola.......................................................................................... 14 2.1.3.4. RIM................................................................................................. 14 2.1.3.5. Samsung........................................................................................... 14 2.1.3.6. LG.................................................................................................... 15 2.1.3.7. HTC.................................................................................................15 2.1.3.8. ZTE................................................................................................. 15 2.1.3.9. Japanese Phone Manufacturers......................................................... 15 2.2. Tablets........................................................................................................................ 16 3. Operating Systems (OS) and Applications (Apps).......................................................................... 18 3.1. Operating Systems.............................................................................................. 18 3.1.1. Android............................................................................................... 18 3.1.2. Blackberry OS / QNX by RIM............................................................ 20 3.1.3. iOS...................................................................................................... 20 3.1.4. Symbian / MeeGo................................................................................ 21
3.1.5. Windows......................................................................................................... 21 3.2. Applications....................................................................................................... 21 4. Spectrum....................................................................................................................................... 24 4.1. 1G ................................................................................................................................. 25 4.2. 2G ................................................................................................................................. 25 4.2.1. GSM (GPRS/EDGE) ..................................................................................... 25 4.2.2. CDMA ........................................................................................................... 26 4.3. 3G ................................................................................................................................. 26 4.3.1. GSM Based Technology .................................................................................. 26 4.3.2. CDMA 2000 Based Technology ..................................................................... 27 4.4. 4G ................................................................................................................................. 27 5. Processor and Chipset.................................................................................................................... 28 5.1. Baseband Processor......................................................................................................... 28 5.2. Application Processor...................................................................................................... 30 5.3. Graphical Processor Unit (GPU)..................................................................................... 32 5.4. Transceiver and Power Amplifier (PA)............................................................................. 32 5.5. Non-Cellular Wireless Chips.......................................................................................... 32 5.6. Memory.......................................................................................................................... 33 5.6.1. Flash Memory.................................................................................................. 33 5.6.1.1. NOR Flash....................................................................................... 33 5.6.1.2. NAND Flash.................................................................................... 33 5.6.2. DRAM............................................................................................................ 33 5.7. A Note on ARM vs Intel Debate in the Mobile Segment................................................ 35 6. Foundry......................................................................................................................................... 39
List of Figures Figure No.
Description
Figure 1
Telecomm Ecosystem
4
Figure 2
Motorola DYNATAC the First Commercial Mobile Handset
5
Figure 3
IBM Simon, the First Smartphone
6
Figure 4
Apple Newton
7
Figure 5
World Market Share Comparison
8
Figure 6
9 10
Figure 8
Market Share of Top Handset Manufacturers from 2009 to 2011 Market Share of Top Three Handset Manufacturers in the US, UK, Germany and Japan World Smartphone Market Share
Figure 9
World Smartphone Market share by Operating System
11
Figure 10
Indian Mobile Phone Market Share 2010
12
Figure 11
Overall and Smartphone Handset Sales Worldwide and in India
12
Figure 12
World Tablet Market Share in 2010, 2011 and, projections for 2012 and 2015
16
Figure 7
Figure 13
Page No.
11
17
Figure 15
Tablet Brands (Available and Announced) Operating System Market Share through 2009-2011 and projection for 2015 OS Market Share from 2011-2015
Figure 16
Evolution of Android Operating System
19
Figure 17
iOS Version History
20
Figure 18
Online Application Store Brand for various Operating Systems
22
Figure 19
Mobile Application Stores Combined Revenue
22
Figure 20
Number of available applications from various OS vendors
23
Figure 21
Radio Wave Spectrum
24
Figure 22
Cellular Frequency vs Cell Tower Distance
25
Figure 23
Telecommunication Standards
26
Figure 24
iPhone Block Diagram
29
Figure 25
Baseband Processor Market Players
30
Figure 26
Baseband Processors WWAN Standards
30
Figure 27
Leading Standalone Application Processors
31
Figure 28
Leading Players in the GPU Market
32
Figure 29
Global Sales Revenues for Non-Cellular Waveform Chipsets (2008-11)
33
Figure 30
NAND Flash market share
34
Figure 31
NOR Flash market trend till 2014
34
Figure 32
Q1 2011 DRAM revenue ranking
34/35
Figure 14
18 18
1
Figure 33
Top 20 Mobile Phones with the Chipsets and the Processors used
36/37
Figure 34
Preliminary Bill of Materials (BOM) Estimate for 16 GB Version of iPhone4
37/38
Figure 35
History of the technology node
40
Figure 36
Q1 2011 Top 20 Semiconductor Sales Leaders ($M)
41
Figure 37
Q1 2011 Top 20 Semiconductors Sales Leaders Ranked by Growth ($M)
41/42
Figure 38
Advanced CMOS Logic Manufacturing Technology Capability in 2011 for Major Semiconductor Suppliers
42
2
1.Introduction
Before anyone could realize, cell phones took over our lives. There has been no other such invention which, in a very short span of time, fundamentally changed the lives of so many people – especially those living in the developing countries. This revolution is the culmination of more than 100 years of work and the story is far from complete. In the 1865, the Scottish mathematician James Clerk Maxwell (1831 – 79) produced a pair of equations – famously known as the wave equations - whose solution predicted electromagnetic (EM) waves propagating at the speed of light. Unfortunately, in Britain, it failed to make an impact. Maxwell himself was a reputed experimentalist, but surprisingly, for the next 14 years of his remaining life he made no attempt to verify his theory. It took 20 years and the scientific genius of Von Helmholtz who believed in Maxwell’s theory and asked his student Heinrich Hertz to verify this prediction in the laboratory. It took another 20 years for the first “mobile” application to take shape when on September of 1899, Guglielmo Marconi ushered in the era of practical mobile radio communication with his historical radio telegraph transmissions from a ship in New York Harbour to the Twin Lights in Highlands New Jersey. Next 100 years saw many new inventions, standards and regulations and as a result of which a complex eco system has taken shape. A simple action of accessing the net over mobile phone to search for a good book and recommending it to a friend involves a combined effort of many stake holders which includes handset manufactures, telecom service providers, Operating system and application vendors, Processors and other IP creators, and Silicon providers. To govern these entities, there are governmental and non-governmental regulating agencies along with standardization committees. 3
Figure 1: Telecom Ecosystem
It is important to study every component of this ecosystem because a disturbance in any part of this system reverberates through the entire chain. An example of this would be the recent earthquake and tsunami in Japan. Japanese vendors sell about 25% of all semiconductor components worldwide, which includes Silicon (Si) and Gallium Arsenide (GaAs) wafers, flash memory, dynamic random-access memory (DRAM), capacitors and display devices. All these components are widely used in the smartphone segment. Due to this, the production schedule of Qualcomm and Broadcom, two of the largest suppliers of SoC for Android and Microsoft Windows based smart phone will be affected which in turn would cause a glitch in the handset production of various brands available in the market. Apple iPad will also suffer production delay since it sources at least five parts from Japan. On the positive side, innovation in any part of the chain, benefits the whole ecosystem. Intel announced on 6th May, 2011 that it will be using 3-D (FinFET) CMOS transistors in 22 nm technology, which would give same performance at 37% less power when compared with the traditional 2-D (planar) CMOS transistors. TSMC – the largest chip manufacturer from Taiwan has also indicated its intention to join the race for 20nm technology node. This innovation would result in superior performance of handheld devices with lesser recharging requirement. Mobile phone has joined wallet / purse and keys as “things we can’t leave home without” and thus, there is an ever increasing demand on producing better performance, longer battery life, sharper display, ease of use, ergonomic design and “killer” apps (applications). Mobile telephony has become a driver for social change, making services like m-banking, e-governance and agri portals possible. Governments around the world have understood this phenomenon and decided to shift the 700 MHz spectrum from analog TV broadcasting to telecommunication. 4
2. Mobile Handset and Tablet Market “My concept of the “personal telephone,” (Mobile Phone) was that it was something that would represent an individual, so you could assign a number not to a place, not to a desk, not to a home, but to a person.” -Martin Cooper (Developer of the first Mobile phone in a BBC interview)
2.1. Mobile Handset 2.1.1. Historical Background 2.1.1.1. Mobile Phone
Figure 2: Motorola DYNATAC the First Commercial Mobile Handset
Mobile phones have become like the air we breathe in; one does not appreciate its importance until it is unavailable. When people lose their mobile phone, they often experience a sense of emptiness, panic and sometimes even grief! For most people it is difficult to imagine how they managed without it just a decade ago. The seeds of modern mobile communication were planted more than six decades ago. American telecommunication pioneer AT&T through its research arm, Bell Labs was looking in to the feasibility of setting up a mobile communication network in the US. It approached the Federal Communications Commission (FCC) to release a sizable chunk of radio frequency spectrum to make it a commercially viable project. What FCC was prepared to grant was just enough for 23 simultaneous conversation in the same service area – hardly an incentive for a commercial venture! After almost two decades of foot dragging, in 1968 the FCC reconsidered its position and showed willingness to release a larger quantum of frequency, provided the technology to build a better mobile service works. The solution put forward by the Bell Labs was to establish a network of a large number of low-powered broadcast towers, each covering a “cell”, a few miles in radius and collectively covering a large area. This way, each tower would use only a few of the total frequencies allocated to the system. As the “Cell-phones” or mobile phones travelled across the area, calls would be passed from tower to tower. 5
Motorola and Bell Labs were in a race to introduce this cellular technology in a portable device all through late sixties and early seventies. On April 3, 1973, around 38 years ago, Martin Cooper a project manager in Motorola made a phone call using a prototype mobile phone called DynaTAC while walking down the street in the New York City. There were no other mobile phones around so he made a call to a land line belonging to his main competitor Mr Joel Engles at the Bell Labs – what can only be called as “rubbing it in”! DynaTAC, the first mobile phone prototype based on the analog technology was weighing around 2.5 pounds with no display screen and a battery life of 35 minutes with 10 hours of recharge time. It was so big and ungainly that it was known as the “brick”. While FCC and the private players in the US were bickering about establishing the norms, NTT of Japan setup the first commercial mobile phone network in 1979, soon to be followed by one set up in the US by Ameritech. On October 13 1983, Ameritech executive Bob Barnett called the grandson of Alexander Graham Bell using the Motorola DynaTAC 8000X costing $3995! As years went by, the technology improved and mobile phone size also started to get smaller and smaller – weighing from a few kilos to a few hundred grams and battery life stretching over few days. This was made possible not entirely due to the technological advancement in the electronics or battery manufacturing. It was partly due to the increased density of mobile towers thus, allowing the phone to use less power in communication.
Figure 3: IBM Simon, the First Smart Phone
Another significant event occurred in 1993 with the launch of a game changing phone by IBM under the brand name Simon. It can be called as the first “Smart Phone”. It was basically a phone with PDA (Personal Digital Assistant) capabilities. It had a touch sensitive screen, limited amount of memory, PCMCIA slot and fax sending and receiving facilities. It was sold for $899. It took little more than a decade for the mobile phone technology to arrive in India. On July 31, 1995, West Bengal Chief Minister, Late Mr Jyoti Basu made India’s first cellular phone call to the union communication minister Mr Sukhram using Nokia 2110 on Modi Telstra’s MobileNet service in Calcutta. It would be interesting to note that the cost of the handset was around Rs 25000/- . From the year 2000 onwards, the mobile phone technology expanded at an exponential rate to 6
keep pace with the ever increasing expectations of the market. As result of which, the prices plummeted, features proliferated and the form factor considerably reduced. It is also true that with the mobile service providers reducing their tariff structure, using a mobile phone has no longer remained a privilege of the rich. Naturally, the market got divided in to two segments, one catering to the price conscious segment through what is termed as the “feature phone” and the other fulfilling the need of the performance conscious segment by offering “smart phone”. The dividing line between the feature phone and the smart phone is quite dynamic. Yesterday’s smart phone is today’s feature phone! As per the existing definition, the smart phone should have a large high resolution screen, internet connectivity, feature-rich operating system, high end processor capable of producing excellent video and audio output and ability to enhance the utility of phone by importing third party applications (apps). Some of the top established players in the mobile phone market are Nokia, Samsung, LG, RIM, Apple, ZTE and HTC.
2.1.1.2. Tablets / MID (Mobile Internet Devices)
Figure 4: Apple Newton
The seeds of the modern day tablets were planted in 1987, when Apple unveiled a new platform / operating system called “Newton” for a series of new devices which was suppose to reinvent the concept of personal computing. Apple CEO John Scully coined a new term called as The “Personal Digital Assistant” or PDA. Some say that the product was too far ahead of its time and did not manage to capture the market. There were two main reasons for its failure; there were not enough applications to run on this platform and a fear that this new platform may eat up market share from its existing range of Mac brand PCs. Apple learned its lessons well and reintroduced this concept in a new package called iPad. The gap of 23 years between Newton and iPad is huge in terms of hardware and software development. Judging from the market acceptability and a slew of similar product announcements by rival companies suggests that this segment has truly redefined the concept of personal computing.
7
2.1.2. Market Scenario 2.1.2.1. World Market Scenario 2.1.2.1.1. Overall Mobile Handset Mobile market has seen a steady upward climb over the years, punctuated only by a slight dip in 2008-2009 due to recession. According to a report published by the market research firm, Gartner, the worldwide sale of mobile handsets in 2011 is projected to be around 1.79 to 1.795 billion. This represents growth of about 12% over 2010 shipment of 1.6 billion units. In Q1 2011, sales have grown by 19% amounting to 427.8 million units (382.9 million according to the IE market research). The same report suggests that the tsunami and earthquake in Japan did not have much effect on the sales in the Q1 2011, but a dip in shipment can be seen for the Q2 2011. Nokia has still retained its top position but with a significant erosion in the market share. Between Q1 2010 and Q1 2011, its market share dropped by 5.5%. This has been the lowest market share for Nokia since 1997. What makes it even worse is the fact that it comes at a time when the worldwide mobile handset sales jumped 19%. Apple, HTC and ZTE have shown strong growth, but the real star performer is the “others” segment. The performance boosters in this segment consist of a large number of local players in the developing countries like India and China.
Source: IDC (2011)
Figure 5: World Market Share Comparison
8
Source: Gartner
Figure 6: Market Share of Top Handset Manufacturers from 2009 to 2011
9
US, EU and Japan market leaders
Samsung
16.7 Motorola
13.7 Sony Ericsson
18.2 Sony Ericsson
Samsung
Samsung
Panasonic Source: Comscore (February 2011)
Figure 7: Market Share of Top Three Handset Manufacturers in the US, UK, Germany and Japan
2.1.2.1.2. Smartphone The term “Smartphone” was used for the first time in 1997 when Ericsson released its first concept phone GS88. The first phone to be marketed as smartphone was Ericsson R380 touch screen mobile phone in the year 2000. It was also the first one to use the new Symbian operating system. Smartphones continued to outpace the rest of the market and a newly formed and very competitive mid-tier smartphone market will drive it into mass adoption. Smartphones accounted for 23.6 % of the overall sales in the first quarter of 2011, an increase of 85% year-on-year, according to Roberta Cozza, principal research analyst at Gartner. It could have been even higher, but manufacturers announced a number of high-profile devices during the first quarter of 2011 that would not ship until the second quarter of 2011. Due to this some consumers delayed their purchases to wait for these models. According to IDC, in the final quarter of 2010, for the first time, the smartphone passed the PCs in global shipment.
10
Source: IDC (2011)
Figure 8: World Smartphone Market Share
Judging by the numbers and apparent trends as shown in Figure 8, there is going to be a change of order in the smartphone market leadership. According to a research note by Nomura analyst, Samsung and Apple will overtake Nokia in the Q3 2011, with Samsung taking the top spot in the smartphone segment. Research firms Gartner and Canalys have estimated that Nokia - which created the smartphone market with its 1996 launch of the Communicator model - will lose smartphone volume leadership by 2012.
Source: Kotar World Panel ComTech Global Consumer Panel
Figure 9: World Smartphone Market Share by Operating System 11
Source: IDC & GfK Neilson
Figure 10: Indian Mobile Phone Market Share 2010
In the developed markets of US, EU and Japan, Nokia and RIM (Blackberry) are consistently losing ground to Android and iOS based phones as shown in Figure 9. 2.1.2.2. Indian market Scenario Keeping with the worldwide trend, Nokia has also lost its market share in India from 54% in 2009 to 31.5% in 2010 according to the data provided by IDC. Both Nokia and Samsung have contested the results of IDC report, and there is significant variation between numbers provided by the IDC and the GfK as shown in Figure 10, but nonetheless, the trends are quite clear. In India, the regional players are giving a tough fight to the international market leaders. In India, there are more than 269 mobile brands available largely comprising of regional/Asian players. Regional players like G five, Micromax, Lava, and Spice have understood the Indian market well and are producing dual, triple and even quadruple SIM card phones with extra long battery life, huge storage and good FM radio – all at a very reasonable cost. Phones doing well in the rural market also have interesting features like fake note detector, mosquito repellent and a good flash light. Most of the regional players obtain their mobile handsets from “white box” manufacturers in China. G five, Micromax, Lava and Spice have come up with Smartphones costing under Rs 5000. They have forced the international players to rethink their strategy. Nokia has now come up with two phone models with hot swappable dual SIM cards. Total Shipment of Mobile phones in Millions
Smartphone Shipment in millions
World wide
India
World wide
India
2009
1130
119
172
2.5
2010 2011*
1388.2
167
302.6
6
1750
210
472
12
Year
*Estimated
Source: Gartner for Worldwide and CMR for India
Figure 11: Overall and Smartphone Handset Sales Worldwide and in India
It is projected that the percentage of smartphone sales as a part of the overall mobile phone market will keep on increasing as shown in Figure 11. It is also true that the bar for a phone to be called a 12
“smartphone” is continuously rising, so today’s low to mid range smartphone may be called a feature phone in 2015.
2.1.3. Handset Manufacturers 2.1.3.1. Apple The word “innovation” comes to mind while describing Apple Inc., a company with $300 billion market capitalization. It is more than the combined market capitalization of Microsoft and Intel as of June, 2011. The philosophy of Apple becomes quite clear when Steve Jobs, the CEO of Apple in his speech said that “we do no market research”. He explained this by saying “It’s not about pop culture, and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That’s what we get paid to do. So you can’t go out and ask people, you know, what’s the next big thing. There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me ‘A faster horse.’’ Apple believes having complete control over its ecosystem; they design the hardware, operating system and major application programs. It has adopted a “boutique” store model. It has only 30 products to offer – contrast this with some top phone companies which churn out more than 30 models per year! Apple iPhone achieved 18.7% market share in the smartphone segment and with that a second spot, surging ahead of RIM and right behind Nokia. In the overall handset segment, it surged to fourth position with a share of 3.9%. According to all industry predictions, there is going to be a major showdown between Google Android based devices and Apple iPhone. It would be a classic battle between two entirely different business models; open source vs. proprietary platform. It needs to be seen if Apple can maintain its creative edge and keep coming out with innovative products or get swept away by the standardized Android platform.
2.1.3.2. Nokia Nokia overtook Motorola in 1998 to be the dominant handset provider in the world. Nokia understood the market and was a pioneer and driver of 2G technology, and quickly became a world leader in both supply chain management and brand-building. It was the first handset manufacturer who recognized the importance of catering to the bottom two-thirds of the global income pyramid as well as the top one-third and among the first to understand the importance of ease of use, aesthetic product design, and that handsets were as much a lifestyle product as a technology product. Nokia has maintained its position as the number one market share holder in the overall handset segment. Lately, its position has come under severe pressure and has been losing market share to the upstarts. Nokia’s inability to field a credible response to the launch of the iPhone in 2007 and Google’s Android operating system in 2008 has brought about a free fall in its market position in the smartphone segment – especially in the US, where the market share has come down to around 1.2%. Even in emerging markets like India, it is leaking market share to local players. Despite having captured 24.3% of the world smartphone market in Q1 2011, industry experts predict the eventual demise of the “Symbian OS” promoted and used by Nokia. To redefine its strategy after 13
the twin assault of iPhone and Android based phones, Nokia first joined hands with Intel to develop a new open source operating system called “Meego”. Then in a dramatic announcement made on February 11, 2011, Nokia and Microsoft announced that they intend to jointly create market-leading mobile products and services and Nokia would adopt Windows phone as its principal smartphone strategy. This is a watershed event for both the giants and its impact on the future of Nokia needs to be seen. 2.1.3.3. Motorola Motorola is considered to be the creator of the mobile handset. In 1994, the dominant global provider of mobile handsets was Motorola: its shares were trading at an all-time high and it was considered to be an outstanding innovator. By 2000, Motorola’s global market share had collapsed from 45% to 15%. Motorola, a company considered to be the pioneer in mobile handset development, has slipped down to the 8th position in terms of the world market share in Q1 2011. From 2000 onwards, it remained in the second position by cornering one-fifth of the market share, giving a good fight to the pack leader Nokia. In 2004, Motorola came out with its RAZR phone which immediately became a smash hit. It was so popular in the market that the phone giant AT&T fought very hard to get an exclusive marketing rights for it. Motorola launched various versions of this popular phone to gain more market share, but with diminishing returns. The slide started in Q3 2007, when Motorola lost its number two slot in the market to Samsung and its market share plummeted to 8.3% from 20% just a year ago. The reason for Motorola’s problem is simple. Its management team failed to understand the demand of the market and did not produce phones that would capture the consumer’s fancy. In 2011, it introduced several new handset models and it remains to be seen whether it can regain its lost market share.
2.1.3.4. RIM It is a Canadian company, founded in 1998 and best known for its Blackberry devices and Blackberry Enterprise Services (BES). The first BlackBerry devices were used simply as “two-way pagers”, but by 2002 they had released one of the first true smartphones. The first BlackBerry devices that used a trackwheel for input evolved into trackballs, trackpads and even full touchscreen versions. Blackberry phone became standard equipment for corporate executives due to its fast and secure e-mail and message delivery. Its Blackberry Enterprise server (BES) became the industry standard tool for facilitating e-mail exchange and data synchronization, and controlling the phone operation. With the advent of Apple iPhone and Android based devices, RIM is facing a very stiff competition. It lost its second place to Apple and its market share dropped from 19.1% in Q1 2010 to 14% in Q1 2011. To counter this, it acquired QNX software platform in mid 2010 to enhance integration between a smartphone and a car infotainment system.
2.1.3.5. Samsung In 1993, Samsung came out with the lightest CDMA mobile phone SCH-800. It has maintained its reputation by introducing new models of handset created using the best technology at a very reasonable rate. Samsung phones are available with Android, Windows and Bada operating system. Currently Galaxy, Droid, Corby and Nexus models are popular among the smartphone users. Samsung has achieved number 14
two position in terms of worldwide market share and is getting ready to challenge Nokia for the number one spot.
2.1.3.6. LG LG, has the third largest overall market share, just behind Samsung. Over the years, it has come out with some trend setting phone models like Chocolate (2005), Prada (2006), Viewty (2008), Renoir (2008), Optimus and Cookie (2010). Unfortunately, LG has not done so well in the smartphone sales. It made strategic miscalculations when on Feb 16th 2009, it decided to join hands with Microsoft to produce smartphones which would use the Windows Mobile OS. This operating system was hastily created and was a scaled down version of its desktop version, which made it painfully slow. Apart from this, it was almost impossible to fight against the large volume of applications developed for the Apple iPhone. Unable to compete in the smart phone segment, it had to depend on its feature phone segment to generate sales. LG’s recovery plans are based around its well received Optimus 7 model.
2.1.3.7. HTC HTC (High Tech Computer) Corporation was established in 1997 in Taiwan. Initially it specialized in producing the Windows Mobile OS based phones but, since 2009, it has shifted its core focus away from that operating system to the Android platform and the Windows platform. It is on a strong growth path as it has almost doubled its smartphone market share from 4.9% to 8.9% in 2011. It received “Device manufacturer of the year” award from the GSMA at (the) 2011 mobile world congress.
2.1.3.8. ZTE It is the second largest telecommunication equipment manufacturing company based in Shenzhen, China. It has established itself in the international market by exporting low cost feature phones in the emerging markets like Latin American, Russia, (and) India. According to ZTE, US has become the fastest growing market. It is poised at number six in the overall market share in Q1 2011.
2.1.3.9. Japanese Phone Manufacturers Recently, research firm-Gartner’s survey data showed that the Japanese mobile phone makers share in the world market is only 3% (Sony Ericsson). This underperformance of Japanese phone manufacturers is quite surprising, because the Japanese mobile phones are some of the most advanced phones in the world. Japanese mobile phones set the pace in many industry innovations, such as e-mail capabilities in 1999, camera phones in 2000, 3G networks in 2001, e-payment in 2001 and digital TV in 2005. Perhaps, the ingenuity of the Japanese mobile phone industry was responsible for this situation. In 1990s, they set a standard for 2G networks, which was not accepted by rest of the world. Japanese were quick to adopt 3G standard in 2001, when other countries were still debating about it. This again made Japanese mobile phones too advanced for the rest of the world. This created an advanced but isolated mobile phone market. Japanese have a name for it, they call it the “Galapagos syndrome” – creatures on the Galapagos island are fantastically evolved and very divergent from their mainland cousins. 15
Top Japanese handset manufacturers like Sharp, Fujitsu / Toshiba, Kyocera and Panasonic would like to break the isolation and make their presence felt in the international market.
2.2. Tablets It would have been difficult to imagine just two years ago, that a new concept product will take the market by storm. Steve jobs while introducing the iPad in January 2010, said that it is a device which is positioned between the smartphone and the laptop segments. To be successful, it has to be better or more convenient than both the smartphone and the laptop in tasks like e-mailing, web browsing, video watching and game playing. Since that day, iPad has become a benchmark by which all other tablets are evaluated. The iPad was introduced in the U.S. market in April, 2010. In just four months, the iPad sales touched $51 billion - the fastest ever for a consumer device. It generated a whole new market segment. All other major players in the market had some tough catching up to do. Some of the successful tablets are Samsung Galaxy Tab / Tab 2, Motorola Xoom and RIM Playbook. It is fairly obvious that no other tablet has generated as much hype and excitement in the market as the apple iPad and iPad 2. Sales figure wise, these two products are far ahead of their competition by cornering almost 84% of the market share in 2010 as shown in Figure 12. In later part of 2011 and 2012, several cheaper android based tablets are expected to hit the market – especially in Asia. In India, G five has announced to launch two tablets in 7 inches and 10 inches for Android as well as windows platform, to be launched in June, 2011. These tablets would be 3G and Wi-Fi enabled with price starting from under Rs 10,000. Similarly, Lava, Zen, Olive and Micromax are expected to launch their tablets costing between Rs 15,000 to 20,000 by end of the year.
2010
Total Tablet sales (in million) 18
2011
70
68.7
19.9
1.1
4.0
5.6
0.6
2012
108
63.5
24.4
1.2
3.9
6.6
0.5
2015
294
47.1
38.6
1.0
3.0
10.0
0.2
Year
iPAD 1&2 %
Android %
MeeGo %
WebOS %
QNX % (RIM)
Other OS %
83.9
14.2
0.6
0.0
0.0
1.3
Source: Gartner
Figure 12: World Tablet Market Share in 2010, 2011 and, projections for 2012 and 2015
One of the markers of the popularity of a tablet is the internet access made through that particular device. Based on the web usage data for the period July, 2010 to May, 2011, iPad had 0.92% share of all browsing, whereas its rivals like Samsung Galaxy Tab (0.018%), Motorola Xoom (0.012%) and Blackberry Playbook (0.003%) trailed far behind. Sniffing opportunity in the fast growing tablet market, all the major market players have announced their plans for launching tablets. It can be seen from the Figure 13, that the tablets are becoming as powerful as the PC. Tablet popularity has been a major factor in slowing down the PC sales – as it is believed that the sale of three tablets cannibalizes sale of one PC. 16
Tablets Brands (Available and Announced) Name
OS
Processor/SoC
Ipad
iOS
A4 1GHz
ipad2
iOS
A4 1GHz
RIM Playbook
Blackberry Os
Hp TouchPad (slate)
web Os
Motorolla Xoom
Android 3.1 Honeycomb
TI OMAP Dual Core 1 GHz Qualcomm Snap Dragon Dual Core 1.2 GHz Nvidia Tegra 2 Dual Core 1 GHz
Samsung Galaxy Tab
Android
Nvidia Tegra 2 Dual Core 1 GHz
Archos Arnova 7
Android 2.2 Froyo Android 2.1 Eclair
TI OMAP 3630 1GHz Rockchip 2818 600 MHz
Flyer (HTC)
Android 2.3
Qualcomm Snap dragon 1.5GHz
LG optimus Pad
Android 3.1
Nvidia Tegra 2 Dual core 1GHZ
Advent Vega
Android 2.2
Nvidia Tegra 2 Dual core 1GHZ
Wetab
MeeGo
Intel Atom N450 1.66 GHz
Bmodo 12g
windows 7
Intel Atom N450 1.66 GHz
Dell Streak
Anroid 2.2 Froio
Nvidia Tegra 2 Dual core 1GHZ
Toshiba Thrive
Android 3.1 Honeycomb
Nvidia Tegra 2 Dual core 1GHZ
Asus EEE tablet
Android
Nvidia Tegra 2 Dual core 1GHZ
Olivepad
Android 2.2
Qualcomm MSM 7227 (ARM11 600 MHz)
Binatone HomeSurf
Android 1.6
ARM11 667 MHz
Infibeam PHI
Android 1.5/ Windows CE ARM11 667 MHz
Accord@Pad
Android 1.7
VIA 8505, 400 MHz
Wespro ePad
Android 1.9
VIA WM8505 400 MHz
Noton Ink Adam
Android 2.3 Gingerbread
Nvidia Tegra 2 Dual core 1GHZ
G’Five Tablet (Basic)
Android 2.1 Froyo
ARM11 600 MHz
G’Five Tablet (Advanced)
Android 2.3 Gingerbread
Nvidia Tegra 2 Dual core 1GHZ
Acer Iconia Tab A500
Android 3.0 (honeycomb)
Nvidia Tegra 2 Dual core 1GHZ
View Sonic Gtab
Android 2.2
Nvidia Tegra 2 Dual core 1GHZ
ZIIO
Android 2.2 Froyo
ARM Cortex A8 1.2 GHz
MSI WindPad
Android 2.3 Ginger Bread
ARM Cortex A8 1.2 GHz
Sony S1 (announced)
Android 3.0 Honeycomb
Nvidia Tegra 2 Dual core 1GHZ
Sony S2 (announced)
Android 3.0 Honeycomb
Nvidia Tegra 2 Dual core 1GHZ
Mediapad (Huawei)
Android 3.2 Honeycomb
Qualcomm snapdragon Dual core 1.2GHz
Amazon Coyote (Q4 11) Amazon Hollywood (“)
Android Ice Cream Sandwich
Nvidia Tegra 2 Dual core Nvidia T30 “KAL EL” Quad core
Figure 13: Tablet Brands (Available and Announced)
17
3. Operating Systems (OS) and Applications (Apps) “Every time a user downloads a native application to their smartphone or puts their data into an Operating System’s cloud service, they are committing to a particular ecosystem and reducing the chances of switching to a new Operating System platform,” – Roberta Cozza, Principle Analyst, Gartner
3.1. Operating System The concept of having an advanced operating system on a mobile phone is about a decade old, giving rise to a new classification called as the smartphone. In 2011, this segment is expected to capture 25% of the overall mobile phone market in the world. In India, this number is about 10%. There are seven major OS in the market, some of them proprietary (Apple iOS, Blackberry OS / QNX, palm and WebOS) and others used by multiple smartphone manufacturers (Android, Symbian, Windows).
Source: Gartner
Figure 14: Operating System Market Share through 2009-2011
OS
2011 share
2015 share
2011-15 CAGR
Android
38.9%
43.8%
23.7%
Blackberry
14.2%
13.4%
18.3%
iOS
18.2%
21.5%
17.9%
Symbian
20.6%
0.1%
-68.8%
Windows Phone
3.8%
20.3%
82.3%
Others
4.3%
5.5%
27.6%
Total
450 mil
N/A
20.1%
Source: IDC (June 2011)
Figure 15: OS Market Share from 2011-15 and projection for 2015
3.1.1. Android In July, 2005, Google acquired a startup company called Android for an undisclosed amount. Little was known about that company other than the fact that Andy Rubin (later to become the director of mobile platform at Google) was its co-founder and the company was involved in the development of “software for mobile OS and location based services”. There was a strong rumour in the market that Google was going to come out with what was termed as the ‘g-phone”. The cause of all these rumours was the increased interaction of Google executives with a few leading industry players. The Mobile community was hugely surprised on November 5, 2007 when Google announced the launch of a brand new open source operating system to take on its rivals like Symbian, iOS and BlackBerry OS. It was due to the combined effort of an entity called Open Handset Alliance (OHA) with 34 founding members comprising of the telecom service providers, software creators and chip developers / 18
manufacturers. So in reality, it is wrong to call the new OS as the “Google Android” even though Google is clearly the main driving force behind it. The main appeal of Android OS is that the system components are like Lego bricks. Previously, it used to be quite difficult to separate the chunks of mobile phone OS, and even if it was accomplished, then getting one part of the system to talk to another was very difficult. Android changed it all. Now, if a developer wants to create a GPS application that uses SMS location, then the two sections would fit together nicely. This made the work of developers quite easy. The first phone with Android OS was HTC Dream, released on October 20, 2008. Consumers saw that like iOS, Android was also a “finger friendly” OS. It received rave reviews in the market, and from that point onwards, a multiple brand of mobile phones have been released in the market with wide variation in price and quality. Version #
Codename
Release date
Android 1.0 Android 1.1 Android 1.5 Android 1.6 Android 2.0 Android 2.1 Android 2.2 Android 2.3 Android 3.0 / 3.1
--Cupcake Donut
Sept 23, 2008 Feb 9, 2009 April 30, 2009 Sept 15, 2009 Oct 26, 2009 Jan 12, 2010 May 20, 2010 Dec 6, 2010 Feb 22, 2011 Q4 2011 (unified OS for phone and tablet)
Android 4.0 (?)
Eclair Froyo Gingerbread Honeycomb Ice Cream Sandwich
Figure 16: Evolution of Android Operating System
By all market indications and forecasts, there is going to be a showdown between Android and iOS in the premium smartphone segment. According to IDC, Android will capture around 39% of the overall smartphone market in 2011 as against 18.2% for iOS. Apple can rightly claim that it is still the king in premium smartphone segment, but Android is catching up fast. Historically, technology platform markets tend to standardize around a single dominant platform, be it windows in PC or Google in search or Facebook in Social. Once that happens, the cyclical reaction kicks in; more users means a larger market for apps developer and with more apps available, original clients would stay put and new clients will be pulled in, leaving other platforms with fewer developers and users. Android does have its weak points. The biggest challenge to it is the danger of “fragmentation”. Various Android updates are coming out so fast that at any time there are three to four versions floating around in the market. App developers are extremely wary of supporting programs for multiple versions of the same operating system. Apart from that, due to the inherent nature of the “open source” software, the licenses can go right into the heart of the Android OS code and tweak it as per their requirement. This gives a chance to the handset manufacturers to customize their products in order to differentiate it from their competitor’s product using the same OS version. These factors take away the stableness and standardization craved by the app development community. Android also has to deal with many different screen sizes and resolutions. Contrast this with iOS where the screen size is fixed and it is possible to do pixel perfect placement. According to an article published in Bloomberg Businessweek (March 30, 2011) by Ashlee Vance and Peter Burrows, Google has started to tighten the screws and is demanding that Android licenses abide 19
by “non-fragmentation clauses” which gives Google the control on how much freedom they have to tweak the Android code—to make new interfaces and add services—and in some cases whom they can partner with. According to the article, Facebook which is developing its own variant of Android for smartphones, was forced to first get it reviewed by Goole before the release. Ice Cream Sandwich is that the project will unite all Android operating systems. A new alliance between partners has also been made to ensure that every smartphone and tablet will receive updates to this OS automatically. Verizon, HTC, Samsung, Sprint, Sony Ericsson, LG, T-mobile, Vodafone, Motorola, AT&T are all now united with Google. Android is still evolving and will take some time to get things right.
3.1.2. Blackberry OS / QNX by RIM Blackberry OS is the proprietary platform for the Blackberry devices. Popularity of Blackberry device was mainly due to its instant delivery of e-mail and the sync up facility with the Microsoft exchange, Novell GroupWise or Lotus Domino based e-mail systems. Encryption feature employed in the BES guarantees the security of messages. BES allows the corporate IT department to remotely control what the employees can or cannot do based on the set IT policy. For example the IT department can disable features like GPS, Camera, SMS and MMS. They can also disable the external media (or allow it with encryption). They can even disable the phone. Now Blackberry devices are facing very stiff competition from iPhones and Android based smartphones. RIM has seen its profit falling down considerably – even though, at the moment there is no alternative to its BES solution. To take advantage of this situation, RIM acquired Unitexx – a German software company to come develop a new “Blackberry Enterprise Solution” that will offer BES like device management and control features for iPhones, iPads, Android smartphones and tablets. This new service should be available by the end of 2011. RIM earlier this year acquired a company call QNX, as a result of which it came out with QNX operating system to run on its PlayBook tablet. There is a suggestion that since QNX has expertise in automobile software development, RIM should concentrate on developing a tablet with automobile interface.
3.1.3. iOS Apple unveiled its operating system for iPhones called iOS on June 29, 2007. It was the original “finger friendly” operating system which changed the game and set a benchmark. It received rave reviews and in some ways compensated for the lack of few important features in the initial iPhone models. Version # iOS V 1.0 iOS V 2.0 iOS V 3.0 iOS V 4.0 iOS V 5.0
Release Date June 29, 2007 July 11, 2008 June 17, 2009 June 21, 2010 June 6, 2011 Figure 17: iOS version history 20
Apple recently released iOS 5 for iPhones and iPads. It has received good reviews in the market. As Apple has complete control over the ecosystem of handset, OS and Apps, the transition of one OS version to another is quite smooth. Things are looking up for iOS and it is expected to increase its share in the high end smartphone market in the coming years.
3.1.4. Symbian /MeeGo Symbian – an open source OS - has a bleak future according to the industry analysts. As shown in Figure 14, Symbian market share will drop from 46% in 2009 to just about 10% in 2015. This drop can be attributed to the fact that Nokia – its main backer – has decided to move away from Symbian platform and move to Windows based platform. MeeGo is a Linux based open source code mobile operating system. It was announced in February, 2010 at the Mobile World Congress (MWC), jointly by Intel and Nokia. Its stated aim was to merge the efforts of Intel’s Moblin and Nokia’s Maemo projects in to a unified product. Just within a year of the announcement of MeeGo, Nokia and Microsoft announced a partnership deal in February, 2011. Though Intel has declared its continued support for MeeGo, it seems that this OS does not have many takers.
3.1.5. WebOS It is a proprietary, Linux based mobile OS, which was initially developed by Palm and later acquired by HP. WebOS was introduced by Palm in January, 2009 with good reviews for its ease of use, open architecture and multitasking capabilities. In 2010, HP acquired Palm and webOS was considered a strategic asset. Its future is tied to the fortunes of HP and has not yet generated the kind of hype that the other proprietary operating systems such as iOS have.
3.1.6. Windows A major player in the PC market but, its mobile operating system, the Windows Mobile, has not shown good sales. Windows 7 based phones are supposed to do better. With the announced tie-up with Nokia, Windows fortune is supposed to change. According to Gartner (Figure 14), Windows OS will be having the third largest market share by 2015, ending up behind Android and iOS. Windows 7.5 (Mango) has been released on June 20, 2011 and the major release of Windows 8 is about to happen. Microsoft and ARM announced a deal on July 23, 2010 in which Microsoft purchased architectural license from ARM. It is believed that Windows 8 will run on ARM platform, which is the platform of choice for 95% of the devices. This could be the reason for the optimistic prediction by Gartner. To make this prediction a reality, Microsoft will need to continue building a robust ecosystem complete with applications and services to effectively compete with stronger ecosystem owners such as Apple and Google over the long haul.
3.2. Application The appeal of a particular brand of the mobile phone – apart from its looks – lies in the variety and usefulness of application programs (apps) developed for its OS. Apple was the first company, which came 21
out with its own App Store and cashed in on the consumer’s demand for Apps, soon to be followed by the remaining OS vendors as shown in Figure. Vendor
Store name
Apple Google Nokia/ Symbian Blackberry Palm Microsoft HP
App Store Android Marketplace Ovi store (name changed) Nokia Services (16/5/2011) App World Software Store Windows Marketplace App Catalogue
Date of Establishment July 10, 2008 Oct 22, 2008 May 26, 2009 April 1, 2009 Dec 16, 2008 Oct 5, 2008 June 6, 2009
Figure 18: Online Application Store Brand for various Operating Systems
App sales have seen a phenomenal growth in just three years. According to Gartner forecast, worldwide mobile application store downloads will reach 17.7 billion downloads in 2011. It represents 117% increase from an estimated 8.2 billion downloads in 2010. It is has also been predicted that by the end of 2014, over 185 billion applications would be downloaded from mobile app stores. In economic terms, this is shaping up to be a big business. Gartner report visualizes worldwide revenues to surpass $15.1 billion in 2011, both from the end users buying the applications and the applications themselves generating advertising revenue for their developers. This amounts to 190% increase from 2010 revenue of $5.2 billion.
Figure 19: Mobile Application Stores Combined Revenue
22
Source: DisƟmo Report
Figure 20: Number of available applications from various OS vendors
23
4. Spectrum
Figure 21: Radio Wave Spectrum
The first decade of the 21st century has ushered us into the age of communication, more appropriately the age of wireless communication. This has been made possible by the use of a few small bands of frequencies in the Radio wave Frequency (RF) range, allocated specifically for the cell phone communication. The portion of RF spectrum between 3 KHz to 2.5GHz is quite precious as it falls in the “permeable zone”, which means that the signals propagating between these frequency ranges can penetrate through most manmade structures and some natural obstructions. As the frequency keeps on increasing, the permeability of the signals goes down. International Telecommunication Union (ITU) – a UN organization – is the central authority to regulate the use of RF. It initially allocated frequency bands around 850 MHz, 900 MHz, 1800 MHz and 1900 MHz for the purpose of mobile communication. Later on, with the advent of 3G and 4G (LTE, WiMAX) technology, bands around 2.1 GHz, 2.3 GHz, 2.5 GHz and 3.5 GHz were earmarked for the advanced cell phone communication. Noting the effectiveness of the mobile communication system, member states of the ITU decided to launch a program called “digital dividend” to alleviate poverty and promote growth through the extensive use of mobile communication. Under this program, all the TV stations occupying the 700 MHz (or 800 MHz depending on the region) band were asked to convert their signal transmission from analog to digital, which would reduce the use of the bandwidth. The released frequencies will be given over for the mobile phone communication purpose. Each country is free to decide the commercialization of the allotted frequency spectrum. India has the “National Frequency Allocation Plan” (NFAP), which conforms to the guidelines provided by the ITU and forms the basis of the spectrum utilization within the country. Indian Government has decided to commercialize 890 – 915 MHz / 935 – 960 MHz in 900 MHz band and 1710 – 1785 MHz / 1805 – 1880 MHz in the 1800 MHz band for the GSM Operators. Similarly, 824 – 844 MHz / 869 – 889 MHz have been reserved for the CDMA Operators. Recently, 20 MHz have been allocated in the 2.1 GHz band for the 3G services and around 100 MHz for the Broadband Wireless Access (BWA). In 2012, the Indian Government plans to auction off the available frequency slots in the 700 MHz band. 24
Source: Prof. Ed Candy, Hutchison Whampoa & 3 Group Europe
Figure 22: Cellular Frequency vs Cell Tower distance
It is easy to observe from the Figure X that it is much more cost effective to use the lower frequency bands. It would be cheaper to operate on 900 MHz frequency bands as opposed to 1.8 GHz or 2.1 GHz, because of the extra cell tower requirement with increasing frequency to cover the same area. Hence TRAI recommended 1.5x price for a frequency slot in 900 MHz band as opposed to 1.8 GHz band. The advancement of mobile telecommunication system has been broken down into “generations” or ‘G’s. 4.1.
1G
It started off in 1980s with the introduction of Motorola DynaTAC phone. It lumped together three standards- “Advanced Mobile Phone System” (AMPS), developed by Bell labs as the first Analog mobile phone standard in the US, “Total Access Communication System” (TACS) in UK, Italy Spain and Austria and “Nordic Mobile Telephone” (NMT) in the Scandinevian countries. They all used Frequency Modulation (FM) for voice channels and Frequency Shift Keying (FSK) for modulation. The era of 1G ended with the advent of digital communication techniques. 4.2.
2G
The two main methods – Global System for Mobile communication, earlier known as the Groupe Spécial Mobile (GSM) and Code Division Multiple Access (CDMA) – have divided the wireless world into two camps. 4.2.1. GSM (GPRS / EDGE) It came into existence in 1995 by the efforts of the European Union countries. The GSM standard uses Time Division Multiple Access (TDMA) and Frequency Division Multiple Access (FDMA) technology. The introduction of General Packet Radio Service (GPRS), “always on” data service tacked on to the earlier version of GSM and ensured that the first time operators could effectively be billed by the kilobyte, rather than by the minute. In 2003, Enhanced Data rate for GSM Evolution (EDGE) was introduced. It is considered as pre 3G technology, but is definitely more advanced than 2G. Hence sometimes it is referred to as 2.5 or 2.75G standard. 2G+ GSM based network and corresponding handsets still dominate the mobile communication market. The main advantage of GSM based network is that it is spread over a large area of the world which makes it ideal for global roaming.
25
4.2.2. CDMA CDMA came into existence around the same time as GSM, in 1995. It was an American invention whose roots date back to the Second World War. CDMA was further developed by Qualcomm which later patented and promoted it. The first version of the standard released by Qualcomm was known as the “Interim Standard – 95” or IS-95. The brand name for IS-95 is cdmaOne. CDMA based network are generally found in the US and some parts of Asia – including India and it has captured around 14% of the world market. As CDMA is a proprietary technology owned by Qualcomm, any company wishing to employ it has to pay royalty. Standard
Modulation
Common Bands (MHz) Max Data Rate
GSM/GPRS
GMSK
850/900/1800/1900
9.6/144 Kbps
EDGE
8PSK/16 QAM
850/900/1800/1900
384/ UP TO 1000 Kbps
WCDMA
QPSK
850/900/2100
22.4 Mbps
HSPA
16 QAM
850/900/2100
14 Mbps
HSPA+
64 QAM
850/900/2100
42 Mbps
TD-SCDMA
QPSK/8PSK
2000
2 Mbps
CDMA2000 1XRTT
QPSK/OQPSK
800/1900
144 KbPS
CDMA2000 EVDO
QPSK/8PSK/16QAM
800/1900
2.4 Mbps
64 QAM
700/800/2600
172 Mbps/326 Mbps
2300/2500/3500
75 Mbps
2300/2500/3500
300 Mbps and up
2G
3G-GSM
3G- CDMA2000
4G LTE WiMAX (16e) WiMAX(16m)
BPSK/ QPSK/16QAM/64QAM BPSK/ QPSK/16QAM/64QAM
Source: Petrov Group, compiled by Digitimes, May 2011
Figure 23: Telecommunication Standards
4.3.
3G
4.3.1. GSM based technology ITU established International Mobile Telecommunications-2000 (IMT-2000) in 1992 to set the standard for the future 3G technology. According to IMT-2000 regulations, for any system to be called a 3G system, must provide peak data rate of at least 200 Kbps. Universal Mobile Telecommunication System (UMTS) is one of the third generation technology for the networks based on GSM technology. UMTS relies on Wideband Code Division Multiple Access (W-CDMA) to offer better spectral efficiency and bandwidth. Since 2006, UMTS networks have been updated with High Speed Packet Access (HSPA). It is broken down into two components; High Speed Uplink Packet Access (HSUPA) and High Speed Downlink Packet Access (HSDPA). These technologies are generally referred to as 3.5G, and the data rate is around 14 to 21 Mbps. Another improvement is HSPA +, where the data rate is around 45 Mbps.
26
Time Division Synchronous Code Division Multiple Access (TD-SCDMA) technology was developed in China by the Chinese Academy of Telecommunications Technology (CATT), Datang and Siemens. The idea was to avoid high payment of patent fees to the companies holding the rights to the rival 3G technologies. At the moment it is used only in China but later on it may move to some developing countries as a cheaper 3G technology. 4.3.2. CDMA2000 based technology It is a family of 3G standards which uses CDMA channel access. The first technology to come up was CDMA2000 1xRTT (single channel Radio Transmission Technology). It was CDMA based technology’s answer to the GSM’s “always on” data access technology known as GPRS. It was later upgraded to the CDMA EV-DO (Evolution Data Only).
4.4.
4G
In 2009, ITU announced the IMT- Advanced (IMT-A) requirements for the 4G standards. According the charter, the top peak data rate for high mobility communication (such as from cars and trains) should be 100 Mbps and for low mobility communication (pedestrian and stationary user) it should be around 1Gbps. Pre 4G technologies such as the first release “Long Term Evolution” (LTE) and “Worldwide interoperability for Microwave Access” (WiMAX) have been around since 2009 and 2006 respectively. Even though they do not meet the IMT-A guidelines of 1Gbps, they have been accepted as 4G technologies, provided that they represent forerunners to the IMT-A and show substantial level of improvement over the initial 3G system deployed. Future technologies such as LTE Advanced and Wireless Metropolitan Area Network – Advanced (wirelessMAN –Advanced) have been designated as the true 4G technologies conforming to the IMT-A guidelines. wirelessMAN – A is also known as the WiMAX Release 2 conforming to the IEEE 802.16m standard.
27
5. Processor and Chipset Computing is not about computers any more. It is about living. -Nicholas Negroponte Apollo Guidance Computer, Block II (1965) Memory (ROM): 36,864 words @ 16 bits (73,728 bytes) Memory (RAM): 2,048 words @ 16 bits (4,096 bytes) Clock Speed: 1 MHz Transistors: 16,800 Volume: 0.97 ft3 Weight: 70 lbs Power Consumption: 55 Watts “How fast is your phone?” This question would have confused most of the mobile phone users less than a decade ago, when the main purpose of the phone was to make voice calls. Mobile phones have become mobile communication / computing platforms. Today, all of the top smart phone producers have their high end models running at 1 GHz or more. In fact it has become a critical buying parameter for the phone users. To understand the capabilities and expected performance of a given mobile phone, one needs to understand the critical components of a phone. These components are; Baseband processor, Application processor, Graphical Processor Unit (GPU), Transceiver, Power Amplifiers, non-cellular connectivity chips and memory.
5.1. Baseband Processor The baseband processor has to manage tasks related to the supported communication Standards such as 2G (EDGE/GPRS/GPS), 3G (WCDMA, EDGE, CDMA), or 4G (LTE, WiMAX). It manages radio communications and control functions (signal modulation, radio frequency shifting, encoding, etc.), and runs the communication protocol stack. Design of the Baseband processor has grown in complexity with the introduction of new telecommunication standards. Each new generation of baseband product has to support multiple standards and bands to maintain “roaming capability” and seamless coverage throughout the world. For such purposes, it becomes necessary that a “3G phone” needs to work on three 3G bands and four 2G (EDGE/ GPRS/GSM) bands and a “4G phone” has to work on three LTE, three 3G and 4 2G bands! This explains the crucial price difference between the feature phones (also known as the basic phone or “white box” phone) and the smartphones. Baseband processors in a feature phone mostly use the 2G standards with the EDGE/GPRS/GSM. There is also a trend of integration of multiple functions like baseband, transceiver, power management and FM radio within the same chip which helps to keep the cost down. Keeping with the demand from countries like India, China, Brazil and Russia, the baseband processor chip also has to support dual, triple and even quadruple SIM cards. Chip companies like Mediatek (Taiwan), Spreadtrum (China) and M-Star (Taiwan) specialize in making chipsets for low cost 2G handsets. 28
Smartphones and tablets needs to have a “media rich” experience which requires high data throughput provided by the 3G and 4G standards. It makes the design of the baseband processor for such devices to be much more complicated. Transceivers for both these standards use higher order modulation and involves mixed signal design. Due to these reasons, it makes sense to keep both Baseband processor and transceiver separate, at least on the Silicon level. It is possible though to integrate such functionalities using 3D packaging technology.
Figure 24: iPhone 4 Block Diagram
Name Qualcomm
Comments Still the market leader in the baseband processor market overall. It is number 1 in CDMA and W-CDMA market. Market leader with 75% share in the non-handset market (Tablet, netbook, PC data cards etc)
Mediatek
Entered the market by acquisition of ADI. At the moment it is number 1 in GSM/ GPRS/EDGE and TD-SCDMA market
CEVA
Based on Q3 2010 shipment volumes, it is now the world’s leading DSP architecture deployed in cellular baseband processors, with CEVA-powered cellular baseband processor shipment volumes surpassing Qualcomm, Texas Instruments and Mediatek.
ST-Ericsson
Their new baseband (Thor) chips are the M7300 and M7400, which use a new programmable baseband architecture developed in house. The M7300 supports HSPA+ at 42Mbps. The M7400 supports LTE at 100Mbps and has backward compatibility with HSPA+. Both chips will support TD-SCDMA as well.
Intel/Infineon Broadcom
Intel initially sold its baseband business to Marvell in 2006 only to re-enter the business in 2010 by acquisition of Infineon’s wireless solutions business Made a strong team by acquisition of Alphamosaic, Zyray, and Beceem
Nvidia/Icera
Nvidia acquired Icera in 2010– a leading player in the 3G and 4G baseband technology
Renesas
Nokia transferred its baseband design division to Renesas in 2010
TI
TI used to be the leader in baseband technology in 2G era, Now it is reducing its footprint in the market and is expected to get out of the baseband processor business by 2012 Figure 25: Baseband Processor Market Players 29
Basebands
Product
WWAN STANDARDS
CORE
NODE
2G Intel
X-Gold 116
GSM/GPRS
ARM11
65nm
Mediatek
MT 6252
GSM/GPRS
ARM7
65nm
Spreadtrum
SC 6800D
GSM/GPRS
ARM9
65nm
ST- Ericsson
G4852
GSM/GPRS
ARM9
65nm
EDGE/GPRS/GSM
ARM11
65nm
EDGE/GPRS/GSM
ARM9
65nm
Mediatek
X-Gold 213 BCM 21331 MT 6236
EDGE/GPRS/GSM
ARM9
65nm
ST-Ericsson
E 4915
EDGE/GPRS/GSM
ARM9
65nm
Intel
X-Gold 616
HSPA/WCDMA/EDGE
ARM11
65nm
Broadcom
BCM 2153
HSPA/EDGE
ARM11
65nm
Spreadtrum
TD-SCDMA/GPRS/GSM
ARM9
40nm
HSPA/EDGE/GPRS/GSM
ARM11
65nm
Marvell
SC8800G MSM 7225/27 PXA 930
HSPA/WCDMA/GPRS/GSM
X-Scale
65nm
Mediatek
MT 6276
HSPA
ARM11
65nm
ST-Ericsson 3G CDMA 2000 QUALCOMM
T 6710/18
HSPA/WCDMA/EDGE
ARM9
65nm
MSM 7625/27
CDMA/HSPA/EDGE
ARM11
65nm
Intel
X-Gold 706
LTE/3G/2G
40nm
QUALCOMM
MDM 9200 THOR M720 SP 2531
LTE/3G/2G
45nm
LTE/HSPA+
65nm
LTE/HSPA+
45nm
2.75 G Intel Broadcom
3G GSM
Qualcomm
4G
ST- Ericsson Renesas
Source: Petrov Group, compiled by DigiƟmes, May 2011
Figure 26: Baseband Processors WWAN Standards
5.2. Application Processor Having a separate (standalone) application processor in a mobile phone is a recent development. It was inevitable with the ever increasing consumer demand for “enhanced user experience”. Application processors run the operating system and manage applications like multitasking, internet browsing, connecting to peripheral devices etc. In the era of simple feature phones, there used to be just one processor which would perform the tasks of Baseband processor and support some applications. Now with increasing complexities of both Application processors and Baseband processors, it makes sense to put them on separate chips – at least in high end smartphones and tablets. Application processors are at least a generation ahead of baseband processors. In other words, by separating them, the time to market for the Application processor is considerably reduced. At the moment, all the top players have 1 GHz plus standalone dual-core Application processors in their portfolio and plans for 2 GHz plus by 2012 with quad core. 30
Company
Processor Name
Core Architecture
Clock Frequency
GPU core
Node
Apple Current
A4
Single, Cortex-A8
1GHz
PowerVR SGX 500
45nm
Apple Next Gen
A5
Dual, Cortex- A9
1GHz
PowerVR SGX 543
45nm
Samsung
Hummingbird S5PC110
Single, Cortex- A8
1GHz
PowerVR SGX 500
45nm
Samsung Next Gen
Exynos4210
Dual, Cortex- A9
1GHz
ARM MALI-400 or PowerVR SGX 543
45nm
TI Current
OMAP4430
Dual, Cortex- A9
1GHz
PowerVR SGX540
45nm
TI Next Gen
OMAP5430
Dual, Cortex A-15
2 GHz
PowerVR SGX544
28nm
Nvidia Current
Tegra 2
Dual, Cortex A-9
1 GHz
ULP GeForce, 8 cores
45nm
Nvidia Next Gen
Tegra 3
Quad, Cortex A-9
1.5 GHz
ULP GeForce, 12 cores
QCOM Next Gen
APQ8060
Dual, Cortex A-9
QCOM Next Gen
APQ8064
Quad, Cortex A-15
Marvell Current
Armada 610
Marvel Next Gen
Aderno 220
45nm
2.5 GHz
Aderno 320
28nm
Single, Cortex A-8
1 GHz
Vivante GPU
45nm
Armada 628
Triple, Cortex A-9
1.5 GHz
Vivante GC2000
40nm
Intel Current
Atom Z670
Single, x86
1.5 GHz
PowerVR GPU
32nm
Intel Next Gen
Atom or ARM?
X86(or ARM?)
Freescale Current
iMX535
Single, Cortex A-8
1 GHz
ARM MBX R-S
45nm
Freescale Next Gen
iMX6
Quad, Cortex A-9
1.2 GHz
Arm Mali T-604
40nm
Broadcom Current
BCM2763
Single, ARM11
1 GHz
Video Core IV
40nm
Broadcom Next Gen
BCM11311
Dual, Cortex A-9
1.1 GHz
VideoCore IV
40nm
Single, Cortex A-8
1 GHz
PowerVR SGX2
45nm
Dual, Cortex A-9
1.2 GHz
PowerVR SGX MP
45nm
Nova A9540
Dual, Cortex A-9
1.8 GHz
PowerVR SGX 600
32nm
Nova A9600
Dual, Cortex A-15
2.5 GHz
PowerVR SGX 600
28nm
Renesas Current Renesas Next Gen ST-Ericsson Next Gen ST- Ericsson Next Gen
SHE-Mobile APE4 SHE-Mobile APE5R
Source: Petrov Group, Compiled by DigiƟmes, March 2011
Figure 27: Leading Standalone Application Processors
5.3. Graphical Processor Unit (GPU) The role of GPU is to manage 2D and 3D graphics, gaming, video capture and playback, and rich user interface. Unlike Baseband processor, GPUs are increasingly becoming a part of the Application processor. 31
Company Imagination Technologies Arm Holdings Vivante Nvidia Qualcomm Broadcom
GPU Platform Power VR Platform Mali VE Platform ScalarMorphic Platform GeForce/Cuda Platform Adreno Platform VideoCore Platform Source: Petrov Group, Compiled by DigiƟmes, March 2011
Figure 28: Leading Players in the GPU market
5.4. Transceiver and Power Amplifier (PA) Transceiver and PA play a critical role in the Radio Frequency (RF) operation. The major baseband players like Qualcomm, Broadcom, Mediatek, Freescale and TI incorporate Transceiver as a part of the Baseband processor platform. On the other hand there are players like SKYWORKS, RF Micro Devices (RFMD), ST Microelectronics (STM), Triquint and Infineon who offer standalone transceivers. Current high end smartphones are multimode supporting WCDMA, LTE and soon WiMAX in their 3G and 4G mobile phones, which necessitate multimode Transceivers. This design complication would soon drive out the players with small technological base. PA is one component which cannot be successfully integrated with the transceiver or baseband processor. Desirable quality of a PA is high output power for robust connection with high efficiency. There is also a requirement for linear power output. To achieve these qualities, there are two technologies available; time tested and proven GaAs technology and upcoming CMOS technology (for PA). It must be remembered that the cell phone’s call quality, signal receiving ability and battery life are all dependent on the quality of the PA. Companies like RFMD, Avago, TRIQUINT, SKYWORKS and Anadigics specialize in GaAs based PAs. Startups like Blacksands from Austin have launched CMOS based PA in February, 2011. It is difficult to say if CMOS based PAs would be able to replace the existing GaAs technology.
5.5. Non-Cellular Wireless Chips Wireless communication systems can be roughly divided into two categories: cellular and non-cellular systems. In cellular systems the area to be covered is divided into a number of cells. All communication in a cell goes via a single base station located in that cell. Complex hand-over protocols and connections between base stations are required to enable roaming over cell borders. Non-cellular systems form another category of wireless communication systems for which no infrastructure is required. In this sense the complete system itself is mobile. Examples of such non cellular system are Blue tooth, Wi-Fi, FM, GPS, Mobile TV and Near Field Communication (NFC). All these capabilities are an absolute must in today’s smartphones. According to the report published by the BCC research in May, 2011, the global market for non-cellular chipsets was worth nearly $4.3 billion in 2010 and is expected to increase at a 17.8 percent compound annual growth rate (CAGR) to reach $9.7 billion in 2015. In the same report, NFC (for mobile transactions and sharing) was seen as the fastest growing segment and Wi-Fi was predicted to be present in smartphones as well as feature phones.
32
Source: BBC Research
Figure 29: Global Sales Revenues for Non-Cellular Waveform Chipsets (2008-11)
5.6. Memory Memory as a group, is one of the most expensive component in a cell phone. To get some idea, take a look at Figure 34 which shows the component cost of an Apple iPhone 4. The cost of 1 GHz Application processor is $10.75 and the Baseband processor costs around $11.72. Whereas the price of 18GB of NAND flash memory alone is $27.00. Total price of all types of memory used in iPhone is about 23% of the total price of the phone.
5.6.1. Flash Memory There are two types of flash memory available in the market; NAND and NOR. Toshiba was the principal innovator of both in the 1980s. These new memories were developed to fulfil the need for a non-volatile memory which can easily be reprogrammed within a system, since one may not want the system to erase all the data (say, the songs or the media files or the e-books) every time it is powered down. Both NAND and NOR are electrically erasable and can write and erase data many times. Both NAND and NOR flash memory have some inherent advantages and disadvantages.
5.6.1.1. NOR Flash Advantages - Allows random access (good for code storage), faster read time, less expensive at lower densities Disadvantages – Larger than NAND flash with the same capacity
5.6.1.2. NAND Flash Advantages – Cost effective at higher densities, smaller area than NOR. Disadvantage – Sequential access (good for data storage but not code storage). Slower than NOR. NAND flash market is doing quite well. Based on the Q1 2011 data published by DRAMeXchange, the market has seen around 9.9% growth, QoQ.
33
Samsung
Q1 2011 Sales (US$m) 1,941
Q4 2010 Market Share 36.2%
Sales (US$m) 1,784
36.6%
Toshiba
1,883
35.1%
1,743
35.7%
Micron
610
11.4%
544
11.1%
Hynix
574
10.7%
510
10.4%
Intel
355
6.6%
300
6.1%
Total
5,363
Company
Market Share
4,881 DRAMeXchange, Compiled by DIgiƟmes, May 2011
Figure 30: NAND Flash market share
As compared to NAND, NOR flash market is expected to decline, as it is losing its business to NAND flash memory.
Source: IHS iSupppli Figure 31: NOR Flash market trend till 2014
5.6.2. DRAM The DRAM revenue declined by 4% in Q1 2011 as compared to Q4 2010. The main reason for that is the decline in price of the DRAM worldwide. Ranking
Company
Revenue
Market Share
Q1 2011
Q4 2010
QoQ
Q1 2011
Q4 2010
1
Samsung
3,306
3,520
-6.10%
39.90%
40.70%
2
Hynix
1,898
1,893
0.30%
22.90%
21.90%
3
Elpida
1,116
1,176
-5.10%
13.50%
13.60%
4
Micron
948
1,036
-8.50%
11.40%
12.00%
5
Nanya
352
365
-3.80%
4.20%
4.20%
34
6
Powerchip
209
193
8.30%
2.50%
2.20%
7
Windbond
159
163
-2.70%
1.90%
1.90%
8
ProMOS
137
152
-9.90%
1.60%
1.80%
Others
172
146
17.70%
2.10%
1.70%
8,296
8,643
-4.00%
100.00%
100.00%
Total
Source: iSuppli
Figure 32: Q1 2011 DRAM revenue ranking
5.7. A Note on ARM vs Intel Debate in the Mobile Segment Since 2007, a very absorbing drama is unfolding in the electronics industry with potentially far reaching consequences. There is a tussle for the mobile market domination between Intel and ARM. At first sight, this truly looks like a fight between David and Goliath. How can ARM with total employee count of 1800 and market capitalization of $13.4 billion can take on a very established player like Intel with around 80,000 employees and market capitalization of $127 billion? It would be right to say that among other things, this is a fight between the two business models. Intel - a company established in 1968 – is one of the pioneers in the processor industry. It designs and produces its own chips. This allows it to be in complete control of all the aspects of Chip production. ARM on the other hand is involved in designing and licensing of Intellectual Property (IP) rather than the manufacturing and selling of actual chips. There are more than 200 companies like Texas Instruments (TI), Qualcomm, Nokia, Samsung which license this IPs. These companies utilise the ARM IP to create both Baseband and Application processors. ARM gets the license fees on the original IP and a royalty on every chip produced. It has been said that ARM is a small company with a very large shadow! Today around 95% of mobile handsets have on the average 2.5 ARM processor cores inside. Apart from this, ARM has managed to establish a dominant position in the Automobile and Home Entertainment segment. Till the beginning of millennium, the processor world was comfortably divided into three segments; High Performance Computing (HPC), Desktop / Laptop/ Server (DLS) and the embedded electronics. Intel dominated the DLS Segment and ARM ruled the roost in the embedded segment. Intel and ARM would like to dominate this lucrative MID segment market with explosive growth potential. ARM processors are traditionally known for the low power consumption. They have industry best – so called – mW/MIPs ratio. As part of their effort to move upward in the performance ladder, they have come up with Cortex – Ax series of processors. Companies like TI, Marvell, Samsung, Qualcomm and Broadcom license these processors to include in their SoC for mobile handsets, which are then purchased by the mobile phone producers all over the world to include it in their devices. There are a select few companies like Nvidia, Qualcomm, Broadcom, Infineon which have architectural licenses that allows them to make changes in the implementation of the hardware while still being faithful to the ARM architecture. It is widely speculated that Apple also has an architectural license of ARM and the A4 (and the announced A5) processor used in iPad and iPhone is based on Cortex Ax. Both companies are refusing to comment on this. Latest launched or announced platform containing Cortex Ax series of processors is “Snapdragon” from Qualcomm, “Tegra 2” from Nvidia and “OMAP4” from TI. Intel has the advantage of a large technical base with a lot of experience and a very well established software ecosystem (ever heard of wintel!). To counter ARM’s challenge, Intel has come out with its “ATOM” range of processors. These processors are quite well received in the netbook segment. Some of the top end ATOM processors like “Silverthorne” (Z5xx) and recently announced “Moorestown” (Z6xx) have great raw processing power. At 35
the moment, Intel is offering Z670 as a mobile application processor running at 1.5 GHz at 32nm node. It is interesting to note that Intel already has a range of ARM based Baseband processors which came with the acquisition of Infineon wireless division. There has been a rumour /announcement that by the second half of 2011, few smartphones will be out in the market with Intel ATOM inside (Nokia?). Several comparisons have been made between ARM cortex Ax and Intel ATOM Zxxx which shows each processor having its own strength and weaknesses. It is generally believed that –as of now – Intel ATOM processors scores high in raw processing speed and ARM processors wins in low power consumption thereby increasing the battery life. Both companies are trying hard to improve so it is going to be an interesting battle. In July, 2010, a new twist was added to this story. It was announced that Microsoft has purchased ARM architecture license. In January, 2011, Microsoft demonstrated Windows 8 ported on the ARM platform, thus creating a huge wave of excitement in the market. This may mean that the next generation of tablets may also be capable of running Microsoft Office. Now from the business model point of view, mobile handset manufactures are used to licensing the processor core or purchasing SoC with ARM core inside. Several companies are manufacturing ARM core containing SoCs so purchasing companies do not have to fear monopolistic price manipulation. With Intel, this fear may lurk in the back of the minds of purchasing companies. On the other hand as Intel has control over end to end design and production of the SoC, it may be able to give the best performance. Only time will tell which model will win. Model
Chipset
1
Samsung Galaxy S2
Exynos 4210
2
HTC Sensation
3
Sony Ericsson Xperia Arc
4
HTC Desire S
5
Apple iPhone4
6
HTC incredible S
7
Google Nexus S
8
HTC Desire
Qualcomm Snapdradon QSD 8250
9
LG Optimus 2x
Nvidia Tegra 2
Qualcomm Snapdragon MSM 8260 Qualcomm Snapdragon MSM 8255 Qualcomm Snapdragon QSD 8250 Apple A4 Qualcomm Snapdragon MSM 8255 Hummingbird (Samsung)
Orange San Francisco Qualcomm MSM 7227 (ZTE Blade) 11 iNQ Cloud touch Qualcomm MSM 7227 10
Processor
Instruction set Architecture
ARM Cortex A9, Dual Core,1.2 GHz, Mali 400
ARM v7A
Scorpian, Dual core 1.2GHz
ARM v7A
Scorpian 1 GHz
ARM v7A
Scorpian 1 GHz
ARM v7A
ARM Cortex A8, 1GHz, PowerVR SGX 535 GPU Scorpian 1 GHz Adreno 205 GPU PowerVR SGX540 GPU Scorpian 1GHz Adreno 200 GPU 65nm ARM Cortex A9 Dual core, 1 GHz, ULP GeForce GPUm, 40nm
ARM v7A ARM v7A ARM v7A ARM v7A ARM v7A
ARM 11 600 MHz
ARM v6
ARM 11 600 MHz
ARM v6
12 Samsung Galaxy S
Humming bird
S5PC 110 (ARM Cortex A8 based) 1GHz
ARM v7A
13 Motorola Atrix
Nvidia Tegra 2
ARM Cortex A9 Dual core 1 GHz
ARM v7A
14 HTC Desire HD
Qualcomm Snapdgragon MSM 8255
Scorpian 1 GHz
ARM v7A
36
15 HTC Wildfire
Qualcomm MSM 7225,
ARM 1136 EJS, 528MHz
ARM v6
16 Nokia N8
Broadcom BCM2727
ARM 11, 600MHz
ARM v6
Sony Ericsson Xperia X10 Mini / Pro 18 Samsung Galaxy Ace
Qualcomm MSM7227
17
Qualcomm MSM7227
19 LG Optimus 7 20
Qualcomm QSD8650
Blackberry Bold 9780
Marvell Tavor PXA930
ARM 11, 600MHz Adreno 200 ARM 11, 600MHz Scorpian 1 GHz Adreno 200, 65nm XScale PXA900, 624MHz
ARM v6 ARM v6 ARM v7A ARM v5TE
Figure 33: Top 20 Mobile Phones with the Chipsets and Processors used
Subsection
Applications Processor
Memory
Part description
Part supplier/Part Details
Applications Processor
Samsung A4 APL0398 45nm, PoP
$10.75
DRAM Memory
SDRAM,4Gb Mobile DDR, PoP Samsung K4XKG843GB (Samsung Dies, 2*2Gb)
$13.80
Misc. Applications Processor Components
Discretes, Passives, etc
$0.50
Flash
Samsung NAND Flash 18GB MLC K9HDG08U5M-LCB0
$27.00
Misc. Memory Components
Discretes, passives etc.
$0.30
Baseband
Infineon 337S3833
$11.72
Transciever
Infineon 338S0626 Quad-band GSM/EDGE
$2.33
Memory Power Mgmt. PAM
PAM Radio Frequency
PAM
Intel(Numonyx?) MCP 128 Mb NOR Flash128Mb Mobile DDR(DDR is Elpida) N/A Skyworks SKY77541-32 Transmit Module Quad Band GSM/EDGE PAM + Antenna Switch Skyworks SKY77459-17 Transmit Module Single-Band WCDMA/HSPA PAM + Duplexer Skyworks SKY77452-20 Transmit Module Single-band WCDMA/HSPA PAM + Duplexer
Component Cost
$2.70
PAM
TriQuint TQM66091 Transmit Module Single-Band WCDMA/HSPA PAM+BAW Duplexer
PAM
TriQuint TQM66092 Transmit Module Single-Band WCDMA/HSPA PAM+BAW Duplexer
FEM
n/a
SAW Module
Murata
Misc. RF Components
PAMs, Modules, Discretes, Passives, etc
$8.25
37
Power Management
Connectivity
Main PM Device
Dialog D1815A 338S0867-A4 Main Pwr mgmt
$2.03
Misc. Power Mgmt
Discretes, Passives, etc
$1.90
Wifi/BT
Broadcom BCM4329 Module WLAN 02.11a/b/g/n, Bluetooth V2 1+EDR,FM/ RDS/RBDS Rcvr
$7.80
GPS
Broadcom BCM4750
$1.75
Misc. Connectivity Components
Discretes, Passives, etc.
$0.80
Texas Instruments 343S0499 (F761586C)
$1.23
Cirrus Logic 343S0589
$1.15
E-Compass
AKM AK8975 3-Axis
$0.70
Accelerometer
ST Micro LIS331DLH 3-Axis
$0.85
Gyroscope
ST Micro L3G4200D Digital 3Axis
$2.60
Misc. Interface & Sensor Components
Discrete, Passives etc
$3.80
Display
3.5” Diag. LTPS LCD, 960*640 PIXELS LG (or poss, TMD)
$28.5
Touch Screen
Capacitive Glass, “Reinforced Wintek or TPK/ Baida
$10.00
Camera
5MP Auto-Focus
$9.75
Camera (secondary)
VGA Auto-Focus
$1.00
Battery
1400mAh
$5.80
Mechanicals
Enclosure, Metals, Plastics, Hardware, etc.
$10.80
Electro- Mechanicals
PCBs, Acoustics, Connectors, etc
$14.40
Misc.
Accessories, Literature, Box Contents
$5.50
Touchscreen Controller Audio CODEC Interface & Sensors
Display/ Camera
Battery Other Total
$187.51 Source: Isuppli
Figure 34: Preliminary Bill of Materials (BOM) Estimate for 16 GB Version of iPhone4
38
6. Foundry The complexity for minimum component costs has increased at a rate of roughly a factor of two per year... Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer. -
Gordon Moore “Cramming more components onto integrated circuits”, Electronics Magazine 19th April 1965
Moore’s law/hypothesis/prediction is one of the most quoted (or misquoted) thing in electronics. He slightly altered it later to the more familiar “number of transistors on a chip roughly doubles every two years, while keeping the area same”. Since 1970, the semiconductor industry has been able to keep pace with the prediction. This has resulted in the reduction of manufacturing cost per “function”. According to the International Technology Roadmap for Semiconductors (ITRS) report, the cost of one transistor (a basic building block of any IC) was $5.58. Now it has dropped down to the billionth of a $, same holds true for a bit of the DRAM (Memory). With the increase in the number of transistors per chip, the total chip size has to be contained within a practical and affordable limit. Usually, for DRAM, this limit is 145mm2 and for CPU it is 310 mm2. So this would force the scaling down of all “critical dimensions” of the components (transistors) in the IC. This critical dimension has been defined as the smallest half pitch of contact metal on any product on IC. This is a good single indicator of overall industry progress in electronics. To keep pace with Moore’s law, the critical dimension has to come down by roughly a factor of 0.7 every two years. In the Figure 35 the reduction in technology node can clearly be seen. 39
Technology Node
Year
10 μm
1971
3 μm
1975
1.5 μm
1982
Intel 80286 (1982)
1.0 μm
1985
Intel 80386 (1985)
Transistor count: 275,000 Speed 16 - 25 MHz
0.8 μm
1989
Intel 486 (1989) microSPARC (1992) Intel P5 Pentium 60 & 66MHz (1993)
Intel 486; 1.2 million transistors Speed 33, 50 Mhz
0.6 μm
1994
Intel 486DX4 (1994) IBM/Motorola PowerPC 601 Intel Pentium 5; 75, 90 and 100Mhz
1995
Intel Pentium Pro (1995) AMD K5 (1996) and AMD K6 (1997) NEC VR4300 used in Nintendo 64
0.25 μm
1998
DEC Alpha 21264A AMD K6-2, AMD k6-3 Pentium MMX, Pentium II, Pentium III Emotion Engine CPU for Play Station
0.18 μm
1999
Intel Coppermine (Pentium III) Intel Celeron Motorola PowerPC 7445 and 7455
0.13 μm
2000
Motorola PowerPC 7447 and 7457 Intel Pentium 4, Celeron, Xeon AMD Athlon, K7, K8
90 nm 65nm
2002 2006
45/40 nm
2008
32 nm 28nm 22 nm 16 nm 11 nm
2010 2011 2012 ? ?
0.35 μm
Chip
Note
Intel 4004 (1971) Intel 8008 (1972) Intel 8085 (1975) Intel 8088 (1979)
Intel 4004 used 50mm Si wafer, had 2300 transistors, speed 1Mhz Intel 8085; 6500 transistors Speed 5 MHz Intel 286; 134,000 transistors Speed 12.5MHz
First Technology node using a gate length shorter than that of light used for lithography (193 μm)
300 mm Si wafer size became standard TI OMAP 3 Samsung S5PC110 (Hummingbird) Intel Core i7 Intel Core i7 extreme edition Experimental devices Experimental devices Experimental devices Figure 35: History of the technology node
The job of fabricating an IC is done by the semiconductor foundries. There are two types of foundry business models. There are some companies which have gone for the vertical integration of designing and manufacturing their own ICs. These companies are called the “Integrated Device Manufacturers” (IDM). On the other hand, there are some companies which specializes only in manufacturing process of IC and do not have their own designing capability. These companies are known as “Pure Play” foundries. There are also a large number of design houses which do not have any IC fabrication facility of their own and they outsource it to the “Pure Play” foundries. Such companies are called “Fabless” companies. In the following Figure 37, out of top 20 semiconductor companies, 14 companies are IDM, 4 are fabless and 2 are pure play. 40
Q1 11 RANK 1 2 3 4 5 6 7 8 9
2010 RANK 1 2 5 3 4 6 8 7 9
10
COMPANY
2010 TOT SEMI
Q1 10 TOT SEMI
INTEL SAMSUNG TOSHIBA TSMC* TI RENESAS ST HYNIX MICRON
40,154 32,455 13,028 13,307 13,037 11,650 10,346 10,432 9,092
9,485 7,132 3,240 2,885 2,990 2,787 2,311 2,455 2,077
11,819 8,185 3,550 3,392 3,167 3,032 2,508 2,490 2,295
10
QUALCOMM **
7,204
1,608
1,962
11
11
BROADCOM**
6,589
1,404
1,752
12 13 14 15 16 17 18 19 20
12 14 15 16 18 13 17 19 23
AMD** INFINEON SONY FREESCALE FUJITSU ELPIDA NXP UMC* NVIDIA**
6,494 6,049 5,645 4,357 4,147 6,446 4,321 3,965 3,575
1,574 1,438 1,520 998 978 1,625 1,079 870 996
1,613 1,358 1,310 1,167 1,148 1,115 1,036 945 936
212.293
49,452
54,780
TOP 20 TOTAL
Q1 11 TOT SEMI
Source: IC Insights, Company Reports
Figure 36: Q1 2011 Top 20 Semiconductor Sales Leaders ($M)
Q1 11 TOP 20 SEMICONDUCTOR SALES LEADERS RANKED BY GROWTH ($M) Q1 11 RANK
COMPANY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
BROADCOMM** INTEL QUALCOMM** TSMC* FUJITSU FREESCALE SAMSUNG MICRON TOSHIBA RENESAS UMC* ST TI AMD** HYNIX
16
NXP
HEADQUARTERS
Q1 10 TOT SEMI
Q1 11 TOT SEMI
U.S. U.S. U.S. TAIWAN JAPAN U.S. SOUTH KOREA U.S. JAPAN JAPAN TAIWAN EUROPE U.S. U.S. SOUTH KOREA
1,404 9,485 1,608 2,885 978 998 7,132 2,077 3,240 2,787 870 2,311 2,990 1,574 2,455
1,752 11,819 1,962 3,392 1,148 1,167 8,185 2,295 3,550 3,032 945 2,508 3,167 1,613 2,490
Q1 11/ Q1 10 % CHANGE 25 25 22 18 17 17 15 10 10 9 9 9 6 2 1
EUROPE
1,079
1,036
-4
41
17 INFINEON 18 NVIDIA** 19 SONY 20 ELIPIDA TOP 20 TOTAL ** FABLESS
EUROPE U.S. JAPAN JAPAN
1,438 996 1,520 1,625 49,452
1,358 936 1,310 1,115 54,780
-6 -6 -14 -31 11
Source: IC Insights, Company Reports
Figure 37: Q1 2011 Top 20 Semiconductors Sales Leaders Ranked by Growth ($M)
Figure 38: Advanced CMOS Logic Manufacturing Technology Capability in 2011 for Major Semiconductor Suppliers
Foundry business requires a huge amount of investment and expertise. As the industry moves to lower technology nodes, there are fewer companies that can keep up. As it is evident from Figure 38 that by the time industry settles around 22 nm technology, only four players will be left with TSMC getting half the business.
42
