Gail Purvis presents an exclusive preview of a round-table workshop planned for the Global Semiconductor Forum. She discusses the issue of collaborative innovation with keynote speakers and industry heads.
With collaborative innovation and cooperation ramping up in the mobile industry, Apple's introduction of the iPhone might appear like a divergence from the norm. But to the 'big five', mobile phone design has merely evolved from the basic voice device to the 'smart' phone category – which Nokia, Motorola, Samsung, Sony Ericsson and LG Electronics (controlling 82% of 1.1 billion mobile devices) already supply.
Collaborating through open systems, as in Google's Android project, is something that appeals to the big five, but perhaps less to the operators. Witness Nokia Siemens Networks paying €140m for Apertio – the UK data platform applications provider for telecoms operators – numbering O2, Orange, T-Mobile and Vodafone among its customers and providing network infrastructure software aimed at enabling mobile, fixed and converged telecommunications operators to improve access to customer data and streamline the delivery of current and next-generation services.
JÜRGEN WALTER, NOKIA SIEMENS NETWORKS
Jürgen Walter, the head of the converged core business unit at Nokia Siemens Networks, says mobile operators are racing to deliver 'seamless and highly targeted services to end users across various access devices', adding that this requires 'a unified approach to subscriber data'.
The overall consensus from the mobile makers is that collaborative development does not impact players from developing their own unique selling positions.
Video and multimedia are agreed on as key features and feature-rich multimedia handsets already number some 300 million units. Online video is seen as a growth area, enjoying online advertising. Market predictions indicate that US internet video advertising will reach $1.6bn in 2008.
Multi-tooled, multimedia application-centric gadgets, focused on music, video, emailing, web browsing, photography, specialist news and stock market services, map links, health monitoring, remote banking and payment devices continue to emerge.
One UK high-tech team even believes there is a new opening for a $20 per volume unit un-cooled thermal imager for mobiles to offer a security feature to users walking along roads and paths at night. Replacing electronic miniaturisation with very-large-scale integration, however, would cost from between $500-$1,000.
In the battle to capture data, content and application revenue for themselves, the smart device trend is good for mobile makers but less beneficial for mobile operators, who have to maximise infrastructure investment returns rather than become bandwidth providers.
One of the earliest collaborative moves has been that of the open mobile terminal platform, recommending the use of the micro USB as a single, universal cross-manufacturer USB cable connector for mobile phones – instead of the existing variety of connectors that are customary with different headsets, car kits, data cables and chargers. The top five concur and have opted to go this route. Motorola already uses a USB connector in a RAZR model.
JEAN-FRANCOIS BARIL, NOKIA
Nokia's senior vice president of sourcing and procurement, Jean-Francois Baril, notes, that "in house design, Nokia is changing from the 'make to specify' business model and moving as much as possible to standard components. This enables Nokia to further refine its research and development investments to focus on areas of core competence. In particular, Nokia specifies interfaces between different block functions.
"Regarding our chipset strategy, Nokia continues to develop leading-edge modem technology, which includes protocol software and related digital design for wideband code division multiple access / GSM and its evolution. This will allow us to sharpen Nokia's focus on smart connectivity software that will bring significant differentiation and added value in the eyes of the users.
"Modem technology means the brains of the chip that controls the connection of the cellular network. Nokia's digital design competence (i.e. IPR position) gives a competitive advantage in modem technology."
MAGNUS HANSSON, ERICSSON
Ericsson's vice president of sourcing and supply, Magnus Hansson, feels that the modem is one of several parts for differentiation, listing 'industrial design and software (especially in applications) as important keys to individuality – as are performance, improved power consumption, camera megapixel capacity and factors such as large displays'.
Is he worried by the limits to second sourcing in a coalescing industry where TSMC has the bulk of manufacturing capacity and IBM is seen as having rather more limited facilities? "Supply security is important," he replies. "So any disrupted production in a fab can be taken up by another fab. The other reason for second sourcing is to have competitive pricing. As things stand, both these elements are valid at present."
Where Hansson would like to see greater collaboration and help is in standardising design. "With 45nm and 32nm nodes and beyond, increased complexity makes development increasingly expensive. To mitigate this, the semiconductor industry has provided tools and development libraries but this is starting to lag behind.
"Tools are more complex and need more computing power. What we need are standard pieces of hardware, say UART or CPU. Already many products share the same functional blocks and it would be good if the semiconductor industry really tries to foster this way of working.
"In higher software some initiatives around Linux and Google to collaborate and cooperate are yet to be proven efficient and reliable. We are closer to the hardware and unworried by cooperative move to standardisation, in fact we see some real possibilities here."
JOAKIM NATT OCH DAG, SONY ERICSSON
Joakim Natt Och Dag, Sony Ericsson's head of strategic sourcing electronics and software, agrees that there are sufficient numbers of suppliers to maintain distinctive products, but feels that competition can be limited and prices are sometimes high. "Nothing," he says with feeling, "drives cost down as quickly as competition."
"The most critical components are those giving a competitive edge, not necessarily dependent on technology, functionality, design or cost, but varying depending of what each mobile handset manufacturer considers it's competitive edge.
"The most complex areas are chipset (radio solution, base band processor solution and power management) and corresponding software and they are also the most critical from a technology point of view. Often, it is also the most expensive component, but the major handset manufacturers pay similar levels.
"Each market segment has its own critical components depending on the target group; camera, display and memory / storage for photo segment, application processor for smart phone multimedia capacity etc.
"What makes a phone unique is how all the sub-systems are linked together to a total phone system solution – and a smart design can save a lot of money and design resources. All sub-systems are up for cooperation with other companies. However, the total system solution together with application software is something that is kept within the company, as our competitive edge."
Lower-level software, he agrees, is where the proprietary IP exists, deeply integrated through the chipset. However, with the growth of open operating systems it is difficult to know which will dominate in the future – and which out of Microsoft, Symbian / UIQ or Linux will be pushed through operator requirements.
Queried about the morphing of mobile and laptop, Natt Och Dag sees both changing. "Smart phones today have the capacity of what a laptop could do a few years ago." Phones, he predicts, will look more and more like a laptops but will be limited to lower power consumption, a smaller display and limited space for components.
"Laptops will always be a year or so ahead of mobile phones when it comes to capacity and some have built-in phone capacity. Sony Ericsson and Ericsson are developing and selling data cards to be built into laptops – connecting them to mobile networks where no fixed installation is available.
"There is a continuous need for more and more models," he concludes, "but the length of a phone model's life will shorten due to price erosion and because a model is more quickly reaching a level where the margins are too low to contribute to the overall company results. New phone models in new designs with new features need to increase to be able to grow with the market, though a phone model can live for nine to 18 months, depending on how unique and feature rich it was at introduction."