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Smartphone Components

Outlook

September 2013

Agenda

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1. Background2. Trends3. Summary4. Base Components • Memory, Display, Touch, Processor, Camera, MEMS,

Battery5. Near Term Trends• Inductive Charging, Materials, Bendable/Flexible,

Payments, Security, Cloud, User Interface6. Google Glass 7. Summary8. Q&A

Presenter’s Background

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A specialist within the Semiconductor, Software and Internet technologies industries

Have designed some of the world’s best Tablets, Smartphones and PCs for companies such as Apple, Samsung, Google Amazon, Dell, hp and LG.

I specializes in the following areas:· Networking (WiFi, LTE, 4G) – Broadcom, Qualcomm, Atheros, ZTE, MediaTek· Communications (baseband, small cells, 3G/4G overlay) – Mellanox, Cavium· I/O (touch, gestures, oncell/incell, ITO) – Samsung, LG, Synaptics, Cypress, Atmel, TI· Displays – (IGZO, AMOLED, LCD/LED, Flexible) – Sharp, LG, Samsung, Sony, Corning· Server/Data Center – cloud computing, storage, big data· Speech/Voice navigation – Google, Microsoft, Nuance, Siri· CPUs (ARM, MIPs, x86) - Qualcomm, Intel, AMD, MediaTek, Imagination Technologies, nVidia, Apple, Marvell· Operating Systems (Android/Windows/iOS/Mac) – Google, Microsoft, Tizen· Storage (HDDs/SSDs, Flash/RAM) – Fusion I/O, Virident, OCZ, EMC, Seagate, WD, LSI, Micron, Sandisk, TDK, NAND· NFC/RFID – NXP Semiconductor, TI, ST Micro, Infineon· MEMS Controllers (Gyro, Accelerometer, GPS) – Invensense, ST Micro, Phillips, AMS· PC – Dell, hp, Intel, Microsoft, Best Buy, Acer, Asus, Lenovo· Battery Technologies – Inductive charging, fuel-cells, solar, alternative energy supply, Li-Ion/Li-Polymer· Accessories – tablet keyboards, cases, audio enhancers, disposable· Wearable devices – Google, Fitbit, Jawbone – *HOT* and emerging· Audio/Video controller – Cirrus, Wolfson, ATI, Imagination technologies, nVidia· Advertising – Zynga, Facebook, Yahoo, Google, Microsoft, Comcast and Yoku· Business processes – development, procurement, logistics, Bill of Materials (BOM)· Commerce – retailers, e-tailers, hybrid delivery model – Amazon, Best Buy, Walmart, Apple

This is what drives the Smartphone ‘component’ industry – the pace of ultra-mobile products (including next gen PCs) and the convergence of tethered devices.

Technology Trends that Drive Components

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Courtesy: KPCB

TREND: New major technology cycles generally end up with 10x more users/devices - driven by lower prices and improved functionality

Computing Growth Drivers over Time

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Courtesy: KPCB

TREND: The can now be considered core components approaching commoditization in some cases. Use the double digit rule to distinguish component from commodity.

Base Components for Mobile Products

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Courtesy: MIT and Apple

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TREND: Memory will split between NOR and NAND and DRAM consumption will increase by 30% over the next 2 years – due to higher DRAM count in Windows and Android.

Key Components for Mobile Products | Memory

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NAND Flash (~$10-15)

1. Samsung2. Toshiba3. Micron4. Sandisk

DRAM (~$8-10)

1. Samsun2. Hynix3. Infineon4. Micro5. Sandisk6. Elpida

Courtesy: Samsung

DRAM production will not take 4-6 months, instead 60 days as most lines were idle….

Skyera, Whiptail, Pure, Solidfire, Cloudbyte, Nimbus, Nimble, Nutanix, Tegile, Kaminario, Greenbyte, and Simplivity

Expect Smartphone's to consume more DRAM than PCs in 2014

TREND: Displays will move towards a greater mix of InCell /OnCell technologies while AMOLED will remain at Samsung /LG with IGZO gaining more traction in tablets. No cost declines

Key Components for Mobile Products | Display

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Display (~$18-20)

1. Samsung 2. Japan Display 3. LG Display 4. Sharp5. Chimei6. AUO

Courtesy: ConsolidatedMarket Forecasts

Touch (~$7-10)

1. TPX2. Young Fast3. Wintek4. Nisha

LG Vu 3, Galaxy Note 3 will be battling for first flexible display in smart phone category - Oct 2013

TREND: No change in 4G and 4G LTE dominance in Qualcomm for 2014 – expect MediaTek strong in 3G/2G and feature phone transition – expecting margin pressure at QCOM

Key Components for Mobile Products | Processors

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App Processor (~$10-20)

1. Qualcomm2. TI3. Samsung4. nVidia5. MediaTek6. Intel

Baseband Processor (~$10-25)

1. Qualcomm2. MediaTek3. ST Ericsson4. Broadcom5. Marvell

Photos Courtesy: Qualcomm

Apple is the first to introduce a 64-bit processor (A7) into a consumer smart phone from a top vendor.But the M7 is very interesting due to it offloading motion data, in effect enabling wearable…

TREND: Expect camera module and MEMs pricing to remain steady and total camera contribution rises in 2014-15. Expect TI to fade and Hon Hai to rise.

Key Components for Mobile Products | Camera

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Camera Module (~$8-12)

1. Sharp2. LG3. Foxconn4. SEMCO5. ST Micro

Photos Courtesy: ST Micro

MEMS (~$2-8)

1. TI2. ST Micro3. Invensense4. Bosch5. Hon Hai

Trend: High-end smartphone accessory that would add a “lens camera” to the back of a mobile device.

TREND: Expert battery size to remain steady and climb as new processors consumption takes over capacity and battery life. Look for a change to Li-Polymer for bendable plays.

Key Components for Mobile Products | Battery

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Battery Module (~$5-8)

1. Simplo2. Dynapack

Photos Courtesy: Smartphone reviews

Battery energy density has improved in recent years, but the rate of increase has slowed significantly.

TREND: This will require ‘infrastructure’ chicken-egg scenario to be vetted which requires automotive, display, conference tables, etc. prior to mobile device mass adoption.

Near Term Trend | Component – Inductive Charging

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Photos Courtesy: Toyota

Also known as Wireless Power using the Qi standard, but AW4P (backed by Samsung, Qualcomm, Broadcom, Intel, et.al.) is changing the rules

Supported on Lumia 920, Nexus 4, Galaxy S4, LG Optimus G Pro and others

Setbacks:• expensive charging cover and plate. • Only charges one device at a time right now • Highly inefficient

Future Trend:• Cup holders in your car could charge your phone• New coffee table that will charge all the gadgets you drop on it.

TREND: Expect this to remain on cases for the time being with material science focused on textures and finishes over water resistant.

Near Term Trend | Component – Materials

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Photos Courtesy: P2i

Nano-coating for Water Proofing

• Offered on Motorola, Xperia Z, Galaxy S4 Active.

• Itri, P2i, Liquipel and others are able to spray down the coating

• Prevents device damage from moisture, light spills.

Complexity:

• Carrier profitability on damage protection ‘plans’

premium materials = expensive transparent aluminum, glass, carbon fiber, ceramics and Kevlar

TREND: LG inaugurates with its upcoming LG Vu 3, while Samsung may release Samsung Galaxy Note 3 spin-off, featuring a flexible Youm … Expect both to be available in October.

Near Term Trend | Component – Bendable/Flexible

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Photos Courtesy: MobileLeaks

Design Expectations:

• Targeted with OLED - by LG, Samsung for Galaxy S5

• Supported by Corning via Willow Glass

• Zero bezel which maximizes the display

• Screens are made up of flexible materials which allow folding vertically to make it smaller - similar to the Apple iPod Nano.

• Hardware components automatically detect the folding action then instantly launch the music player.

Considerations:

• Flexible PCBs – memory, batteries, SOCs, etc• Limited to hinge assemblies• Look to Plastic Logic to deliver finished

panels• Liquavista -> Amazon• Novaled -> Samsung?

TREND: Despite backups & cloud-based storage, this "security" to "identity" shift suggests that phone makers recognizes data is tied to an identity, not an easy-to-crack access code.

Near Term Trend | Component – Security/Cloud

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Photos Courtesy: Apple

Finger Print Reader

• Primarily usage model is around identity recognition for security, secondary will be authentication of transaction

• Provisioned by Authentec and Microlatch• Fingerprint could become the gateway to Web-based

authentication (this is the mobile payment part)• Alleviates users choice of poor passwords and password

reuse

Complexity:

• Storage of the fingerprint information – on device or in the cloud?

• Easy to fool (playdough, candy, gum, etc.)

By adding the new Touch ID architecture that incorporates a fingerprint reader directly onto the device Apple will have a leg up on the enterprise users and IT administrators that are managing BYOD.

TREND: All 3 interface technologies were available in PCs nearly 10 years ago, but now Intel will drive adoption across the Haswell platform – so expect it on most PCs in 2014-15.

Near Term Trend | Component – User Interface

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Trifecta:

1. Touch (required) – usual suspects of ITO or oncell, incell • Obviously requires a screen – thus the move to all-SOC-integrated displays

2. Voice (getting better) – Google, Apple, Nuance, Microsoft• Beyond Siri – think of the interface allowing TV viewers to discover content on a

wide range of devices, including TVs, PCs, Smartphones and tablets.• Primarily to monetize ‘Conversation Search’, requires “relevance” IP.• Without it – Google Glass is unusable – requires always on – listening.

3. Gesture (best when combined with others) – Leap Motion, Maxim, Sharp, Capella• Manipulating 2D text/photos and 3D digital models with his hands/eyes.• Samsung’s eye tracking capability on the S4 sounds cool, but it hardly ever

works in a way that most users find enjoyable enough to keep using it.Revenues for proximity-based gesture sensors is projected to reach US$123 million in 2013, up from just US$42,000 in 2012.

More than half of new automobiles in 2019 will integrate voice recognition, as car manufacturers increasingly seek safer ways for drivers to interact with navigation, music or phone calls,

TREND: As a method of payment, I believe NFC is a non-starter due to ‘tolls’ collected between POS and banks. Thus PayPal at retailers is best positioned to win in my opinion.

Near Term Trend | Component – Mobile Payments

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Image Courtesy: Business Intelligence

•Still in the early stages of mobile payments adoption: • ~8 million U.S. had adopted a consumer-facing NFC-

compatible system like "Google Wallet“. • PayPal alone processed $14 billion in mobile payments last

year

•Increase Smartphone penetration WW fuels growth:• In Africa, mobile payments have grown as an to poor

banking. • In Asia, mobile payments have into many facets of everyday

economic life and consumer-facing infrastructure.

•Large scale adoption of tablets and smartphones as registers on the merchant side:

• Terminals still rely on consumer use of physical credit cards. • Many mobile payments market estimates miss the fact that

small businesses and enterprises are adopting mobile for point-of-sale tools.

•How big will mobile payments become? • 2017: WW - the total value of global offline transactions

facilitated by mobile devices will reach about $1.5 trillion, up from $120 billion in 2012.

• In the U.S., transaction value will rise to $244 billion in 2017, from $15 billion last year.

• By 2017, the total consumer user-base will climb past the 500 million mark.

Tip: This is roughly $180 in BOM cost and should support a $350 sale price for Glass 18

It's running Android 4.0.4 - Ice Cream SandwichIt's an OMAP 4430 CPU (TI - ARM Cortex M3 CPU)500-1GB of RAM (Elpida or Hynix)16GB Flash (Sandisk, Micron, Samsung)128x128 Pixel screen with Capacitive touch integratednHD projector display (640x360 – Google only)Accelerometer (STM, Invensense)Vibration device (Bosch)Bluetooth 4.0 or Bluetooth LE (low energy spec)Airplay (Apple only)Titanium frame (Google only)550 mAh battery (2.1 Whr)Custom caes design

Bonus: Key Components for Google Glass

Image Courtesy: VentureBeat

Summary | Recap

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1. Structural commodities should continue 1-2% cost decline / monthly2. Strategic components will require new usage to support current GM levels3. Flash to remain stagnant on COGS with a balanced S/D line for consumption4. DRAM to rise slightly, artificially for fire, but reality for consumption5. OLED stays expensive and not game changing yet, bendable display for all,

flexible for Apple6. Core count increases on SOCs/APP processors, M7 is game changing,

Snapdragon cost red.7. Materials – more plastics to support COGS, more textured surfaces to support

high end8. NFC not taking off yet – fingerprint reader will and cloud based authentication

concerns9. Voice UI getting perfected, gesture will be annoying and TV interface is still TBD10. Google glass needs to be $300 and may require tethering

Tip: I have a short list of key players that are helping build around the ecosystem with innovations in battery, flexible PCBs & displays, materials and textures.

Any questions?

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