SiRF and GPS chips. SiRF's challenge: Surfing a sea of mobile complexity. by Junko Yoshida EE Times (06/15/2009
MANHASSET, NY — SiRF Technology Holdings, Inc. is between a rock and a hard place.
The GPS chip supplier faces: a declining market for personal navigation devices; increasingly tougher competition for design-wins in mobile handsets; and on-going legal entanglements with Global Locate, one of SiRF's competitors which Broadcom bought in 2007.
A merger with CSR, a leading Bluetooth chip vendor based in the U.K., is the best hope for SiRF's survival in a mobile handset market demanding the best multi-radio connectivity solution. The CSR's deal to acquire SiRF awaits approvals of shareholders at respective companies on June 25th.
Still, a huge challenge ahead of is the integration of the two geographically distant teams -- SiRF in San Jose and CSR in Cambridge, the U.K. The two companies' first jointly-developed multi-radio silicon won't be launched until 2011, another potential problem with the race for integrating multiple radios in cell phones already in full swing.
Further, the last thing SiRF needed was the recent U.S. Government Accountability Office's report on GPS. In the report, GAO warned that the Air Force's delayed acquisition of new GPS satellites may lead to GPS signal degradation starting in 2010, as old satellites begin to fail. SiRF and industry analysts don't agree with the GAO's assessment, but they worry that the report may trigger a panic on the consumer GPS market.
Against this backdrop, SiRF unveiled last week a new multifunction location processor designed for high-volume, GPS-enabled consumer products.
Called SiRFatlasIV, the new processor -- featuring a GPS baseband, touch-screen controller and multi-layer cell flash controller -- enables ODMs and OEMs to develop a location-centric multimedia system "at less than $50," according to SiRF.
Kanwar Chadha, founder and vice president of marketing for SiRF, said that SiRFatlasIV, using a core of the company's high-end SiRFprima multifunction location processor, is "optimized for the entry-level location-centric systems."
With the new processor, Chadha is hoping for an uptick of a market segment for "embedded, multi-function systems whose focus is location." It's a category for new digital consumer products that "are neither as fully programmable as PC nor as single-function devices as personal navigation devices," according to Chadha.
Such a market, however, is as elusive as its production definition.
GPS in mobile phones
The good news for GPS chip suppliers is that worldwide shipments of GPS-integrated mobile devices are growing at an annualized rate of nearly 40 percent over the next five years, according to Harry Wang, senior analyst at Parks Associates.
The bad news, however, is that the most of the growth is in mobile handsets, not in personal navigation devices, in GPS-enabled PDAs or personal entertainment devices. In short, if your GPS chips are not in many cell phones, you are not positioned to catch the biggest wave for upcoming GPS market growth.
Park Associates' Wang said that mobile phones and smart phones were 83 percent of GPS units globally shipped in 2008. The mobile phone segment on the global GPS market will continue to grow to 90 percent by 2012, he predicted.
In contrast, the unit share of GPS-enabled personal navigation devices (PND) will drop almost by half from 15 percent in 2008 to 8 percent in 2012, according to Park Associates.
Even worse is the continuing downward spiral of the average selling price for PNDs. The size of the industry-wide PND market in 2008 was $6.8billion in value. That will go down to $5.7 billion in 2013, according Wang, despite unit shipments that are expected to grow at a compound annual growth rate of eight percent.
GPS market cannibalization?
"There will be cannibalization of the GPS market," predicts Wang. "Once GPS becomes a part of one's mobile phone, why would anybody want to carry another GPS handheld device?"
This is where Chadha's prediction of the future GPS market differs from that of Park Associates.
Wang believes "the market for personal navigation devices (PND) has leveled off," especially compared to the period between 2004 and 2006 when the demand for GPS on the consumer market grew by leaps and bounds.
In contrast, Chadha, while acknowledging the declined consumer demand for PNDs in 2008, argues that the consumer navigation market has "been stabilized." He remains much more optimistic, and more bullish than others, about the demand for the future location platform as an all-purpose mobile Internet device that is neither a computer nor a phone.
Pointing out the growing momentum behind Google's Android and Linux, Chadha said, "The operating system environment for such devices -- multi-function embedded devices with location in mind -- is just starting to emerge."
Finally, there is the geographical factor. Chadha noted that such a multi-function navigation platform has been largely driven by consumers in the East, especially China. "They want more than just a navigation system " they want an MP3 player and other personal entertainment functions in it."
SiRF claims that the new processor, SiRFatlasIV, is already in use by ODMs and OEMs, including ASUS International/Unihan Technology Corp., Binatone Electronics International Limited, Foxconn Technology Group and Maylong.
Location-centric, multi-function platform
While many in the industry have talked of GPS-enabled personal entertainment devices, SiRF's Chadha claimed that such devices often had to be developed by slapping together multiple chips "that may not seamlessly function and that feature a bus architecture not optimized for running multiple functions."
Chadha stressed, "Multifunction, location-centric consumer devices are best served by multifunction location silicon and software platforms" like SiRFatlasIV.
In addition to a highly sensitive advanced location engine, SiRFatlasIV, based on a 500-MHz ARM11 processor core, features a high performance 64-bit system bus and a high-speed memory controller, providing enough horse power to run multiple applications, including video post processing, and all the basic peripherals, explained Chadha.
GPS and Bluetooth combo
Before the upcoming merger, both SiRF and CSR, independently, worked on their own versions of GPS and Bluetooth solutions through acquisitions and internal R&D. While they had seen some design wins, neither company, thus far, can point to a winning combination of their own, capable of sweeping the market.
At a time when Broadcom, Texas Instruments, MediaTek, Atheros and Qualcomm are all descending upon the multi-radio connectivity platform market, how will the combined CSR/SiRF compete against them?
Calling SiRF "the only pure-play" GPS company among them, Chadha explained that SiRF's strong GPS Technologies, in the end, will become the critical differentiator. "We live or die by this [GPS capability]," he said.
When every handset vendor races to integrate multiple radios in different permutations, they are looking for the best quality radio solutions. Park Associates' Wang described CSR as the largest Bluetooth chip supplier in mobile handsets while acknowledging the high quality of SiRF's GPS silicon. But SiRF's problem is "its weakness in the cell phone market," Wang said. "SiRF has great technologies, but it's too high-cost to get into a lot of handsets."
GAO report on GPS
It's still unclear how much adverse impact that the latest GAO report on GPS may have on the consumer GPS market. But Park Associates' Wang called it "inappropriate" for the government to have issued the report.
Similarly, SiRF's Chadha recently released an opinion piece entitled, "GPS System, 'callenges in sustain and upgrading': Challenges Yes, Panic No." In his piece, Chadha wrote, "some of the projected worst-case scenarios and 'gloom and doom' headlines [in the GAO report] can do significant, unwarranted damage to the perception of GPS reliability."
SiRF's point is that the GPS system "has been an extremely reliable system and in general has under-promised and over-delivered."
Chadha noted that "Although only 24 satellites are promised by the Air Force for the system to be fully operational, we are getting used to seeing many more satellites as most of the satellites in orbit are proving to have much longer life than originally anticipated."
He added, "While these satellites will fail over a period of time, no one expects all of them to stop functioning suddenly nor simultaneously." Wang agreed. "The risk [of that] is overblown."
However, in the event of dealing with degrading GPS signals in the future, Wang said that there may an opportunity for GPS chip vendors such as SiRF to promote their technology as "future proof." |
