This week, IDC is holding its first Smart Technology World Conference at the Ritz-Carlton Hotel in downtown San Francisco. What’s “Smart Technology” you ask? It’s a new take on embedded systems—a differentiation that I’ve quickly come to appreciate.
Smart technology differentiates embedded devices built with one or more 32-bit processors, full-blown operating systems, advanced user interfaces such as touch-screen graphic LCDs, and software apps. Contrast smart devices with more conventional embedded devices based on 8- and 16-bit processors that have minimal user interfaces. For example, my not-very-smart desk phone at work comes quickly to mind. “Press 2 to listen to your messages and press 76 to delete message” indeed. Who came up with that meme? Hardly smart.
The entire Smart Technology conference is the brainchild of Mario Morales, IDC’s Vice President of Semiconductors and EMS. Coincidentally, Morales gave the introductory presentation at the conference on Tuesday morning. “Smart technology is fundamental to our lives today,” said Morales.
Embedded devices have been around for at least 30 years (actually, since 1971 when Intel introduced the 4004 microprocessor). “Embedded design is starting to change” continued Morales. It’s coalescing around common operating systems, common hardware platforms, and ubiquitous broadband connectivity (the Net effect). “Consumers expect everything to be intelligent, connected, and transparent” he said. In other words, consumers want their technology to be smart. They are quickly becoming accustomed to it and these expectations are changing/driving consumer behavior while creating new business opportunities.
According to Morales, here are the Smart Technology market drivers:
- Diversity of platforms, OSes, and Apps
- Billions of users, millions of apps
- Pervasive demand of data across markets that exceeds network capacity
- Emerging regions are driving the next wave of volume growth
- Mobile devices and service providers become a major channel for apps and commerce
As a result of these drivers, Morales predicts a healthy growth in the number of 32-bit processors shipped over the next several years, from about 8.5 billion in 2011 to nearly 14 billion in 2015. These numbers include 32-bit processor cores shipped in SoCs and MPSoCs and standalone 32-bit processor chips with one or more cores. Morales also predicted that the trend towards multiple 32-bit processor cores in embedded devices will continue and accelerate.
Surprisingly, says Morales, this is not a market where’s Intel’s x86 architecture dominates. The 800-pound gorilla in the embedded market is ARM, which should not be much of a shock to anyone reading the EDA360 Insider. In 2010, says Morales, 59% of the revenue for embedded processors came from the sale of ARM cores in a $67 billion market. ARM cores will represent 55% of a $107 billion embedded core market in 2015, predicted Morales, who also predicted that Intel’s x86 architecture would nearly double its market share by then (from 10% in 2010 to 17% in 2011).
Of these billions of cores, mobile telephone handsets represent about 2/3 of the total and that percentage will not change much over the next five years. Most of the market share increase will go to consumer products (which can certainly benefit from plenty of “smartening”).
Although it’s tempting to think that smartphones will replace every other device, Morales doesn’t think this will happen. We need different devices depending on our mobility, our location, whether we’re working or recreating, and just what we’re doing at the time. For example, reading large amounts of text is certainly easier on a tablet or reader than on the cramped display of a smartphone. As just discussed in an EDA360 Insider blog entry earlier this week (Apps-driven: Are mobile phones the agents of creative destruction?), mobile phone handsets do many things and they do some of them well, but not all of them.
Then, in perfect alignment with the EDA360 vision, Morales said “Smart systems demand greater performance and integration of the value stack.” The creative destruction taking place at all levels of business now means that system vendors are relying more than ever on semiconductor vendors to provide platform designs and development tools that support the quick development of smart systems.
Morales concluded with some opportunities that he sees for smart systems over the next five years:
- WiFi Connectivity is and will be larger than cellular
- There’s a mobile broadband opportunity ranging from dongles to machine-to-machine (nearly 500 million units)
- GPS and location-based services are driving new business models
- Near-field communications will enable digital wallets and more types of business opportunities
By 2020, said Morales as he summed up his talk, we’ll have perhaps 1.9 billion PCs in use, 2.6 billion mobile phones, and 25 billion embedded devices. That’s a mighty big market beckoning.