PMPs to Drive Multimedia Semiconductor Industry in 2008

K.W. Ip, Technical Marketing Director, SigmaTel, gave his insights regarding the multimedia semiconductor market for this year. Excerpts:



What are the major trends, opportunities and challenges you see from your specific sector in 2008?

The portable multimedia player (PMP) market is expected to achieve tremendous growth in 2008, with Gartner forecasting 13.5% average annual growth—a trend that is predicted to continue until 2010. The market is being boosted by several key drivers globally: a rapid growth in the number of Internet-connected households, the increasing number of broadband subscribers, plus the broader availability of Wi-Fi.



However, uncertainty in the cost and supply of NAND flash memory chips will create some difficulties among manufacturers during 2008. But, since the overall price trend is downwards at an average rate of 47.7 percent per year until 2011—this significant price reduction can only help to cut prices and boost the PMP industry overall.

The growing versatility of PMPs means that users will multi-task—watching a video and using email simultaneously, for example. A heavier workload incurs greater power consumption and consequently battery life becomes an increasingly important factor in PMP design and production. Consumer expectations will continue to grow in 2008, anticipating a steady improvement in energy efficiency and manufacturers that put a significant amount of emphasis on power management, like SigmaTel, will be best placed to handle this issue in the months ahead.



Extended battery life and consumer demand for more and more functions integrated into PMP devices will continue to be significant trends, while products will be expected to maintain competitive pricing, hitting specific consumer price points.



How did your company perform in the past 12 months in terms of product introduction?

Our 3700 product family has gained momentum, and our customers are continuing to design-in SigmaTel technology for new products in 2008. We work closely with our key OEM/ODMs to enable them to deliver differentiated personal media players with unique feature sets to consumers worldwide.



Currently, SigmaTel is collaborating with leading Chinese manufacturers to create next-generation video players powered by the STMP3700 product family, including AMAX, Ramos, Foxda and KeenHigh.





What are the main customer demands in your sector?

At the low-end of the market, there is a tendency for some manufacturers to offer lower value products with a poor selection of features. However, the overall market trend is for consumers to insist on good quality products with high quality video capability, or to be intent on upgrading their existing PMP to a more highly featured model.



Over the last 12 months, the rapid growth in the range of video content that can be easily accessed via PMPs has provided a powerful need among many consumers to step up to handheld devices with video capability. Music videos, YouTube, Movies and TV are all helping to grow consumer expectations of the potential for PMPs and, incidentally, helping to raise the level of excitement around SigmaTel's STMP3700 product family.



What new product directions would you go after in 2008?

Having seen and experienced the potential of multimedia PMPs, there is a diminishing interest in simpler MP3 players—consumers want more capable devices and in particular, they want video. One of the key factors raising the profile of PMPs among consumers has been the high profile introduction of a series of new products from Apple.



Legal downloads of non-DRM music and videos are expanding, while DRM continues to play an important part in the market. With the growth of new initiatives like PlaysForSure, a very important partnership for Sigmatel, we view players that can access such content, directly via wireless networks, or indirectly via a personal computer, as fertile ground for manufacturers and our product set.



Other technical improvements—higher resolution screens and better video quality—are also encouraging a higher rate of adoption for PMPs and opening the door to new uses, such as video conferencing.



One important new trend for handheld devices is for the top models to include GPS—not just to enable better car navigation to reach a destination, but also to help users find their way around a new town, in search of Starbucks, or a comfortable hotel, for example.