from subscriber to silicon: why end-to-end technology value chain insight is critical to your supply...

Copyright © 2012 IHS Inc. All Rights Reserved.

September 2012


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Today’s Speakers

Research Director, Digital Media

408 654 1707

mailto:[email protected]



408 654 1707

From Subscriber to Silicon Why End-to-End Technology Value Chain Insight

is Critical to Your Supply Chain Survival




Why?

5


Because…

6

Image Sensor

140%

Overall Semiconductor

112%


Understanding…

7


Meanwhile…

8

Wireless

Communications

Value Chain

~ $1 Trillion

Device

OEMs

Service

Providers

(Operators) Consumers

Retailers

Display

Providers

Device

Software

Wireless

Infrastructure

Providers

Content

Providers

Contract

Manufacturers

Silicon

Providers

Independent

Design Houses

and

IP Licensing

Network

Maintenance

and

Software


Example…

9

Technology

Media Telecommunications

• Gaming

• Video

• Cinema

• TV

• Advertising

• Broadband Media

• Mobile Media

• Operators

• Wireless

• Wired

• Infrastructure

• Computing

• Telematics

• Consumer

• Raw Materials

• Semiconductors

• Memory

• Displays

• Manufacturing

• Channels

• Applications

From Subscriber to Silicon Why End-to-End Technology Value Chain

Insight is Critical to Your Supply Chain Survival


408 654 1707




The Consumer Electronics Value Chain is

Large and Complex

11

Consumer

Electronics

Value Chain

~ $1 Trillion

Service

Providers

(Operators) Consumers

Retailers

Display

Providers

Device

Software

Pay TV Service

Providers

Content

Distributors

Contract

Manufacturers

CE Semi

Suppliers /

Manufacturers

Independent

Design Houses

& IP Licensing

Online TV,

Pay per view

Service

providers

Device

OEMs

$62B

$280B $50B

$360B

$200B

$5B


The story of an interconnected supply chain

Consumer/subscriber Components Vendor Retailer/operator

Revenue flows all the way back from subscribers to silicon

The capabilities of the components drive consumer demand


As an example let’s look at what happens to

the TV sets market in Europe

13

0

100

200

300

400

500

600

700

0

10

20

30

40

50

60

70

Insta

lled

base (

m)

European TV sales and installed base

TV sets sales TV sets installed base


European TV sets sales and installed base

are starting to flatten after years of growth

14

0

100

200

300

400

500

600

700

0

10

20

30

40

50

60

70

Insta

lled

base (

m)

European TV sales and installed base

TV sets sales TV sets installed base

Inflection point


But what actually happened during this

period was an increase in sets installed

15

0

100

200

300

400

500

600

US Europe WesternEurope

France Germany Italy Spain UK EasternEurope

Ho

mes /

in

sta

lled

base (

m)

TV homes and TV sets across major countries and regions

TV HHs TV sets


Where were these new sets being installed?

In new rooms, this is really driven by FPD

16

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

10

20

30

40

50

60

Sh

ipm

en

ts (

m)

Shipments driving sets per home

CRT

FPD

Sets per home

Beginning of growth


This has increased the number of homes

with more than one TV set

17

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Multi-set homes

US

Europe

Western Europe


Now we’re starting to reach a natural limit to

TV set growth: no more rooms for TVs

18

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

100

200

300

400

500

600

US Europe WesternEurope

France Germany Italy Spain UK EasternEurope

TV

s p

er

ho

me

Ins

tall

ed

ba

se

(m

)

Multi-set TVs profiled into homes 2011

TVs in multi-set HHs TVs in single-set HHs TVs per multi-set HH


And this slowdown is happening globally,

but not uniformly across regions

19

0

50

100

150

200

250

300

Sh

ipm

en

ts (

m)

TV set shipments by region

China

India

Russia

Brazil

Asia-Pacific

Latin America

North America

Middle-East & Africa

Eastern Europe

Western Europe


And there are some noticeable bubbles,

including 2005-2010 globally

20

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

5-year growth bubbles in TV set sales

2000-2005 2005-2010 2010-2015


So, our forecasts for TV set shipments take

into account all of these complex factors

21

0

10

20

30

40

50

60

70

80

200

0

200

1

20

02

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

Un

its (

m)

TV sets shipments in Europe


In fact, we can see the drivers of component

revenue in the TV set shipment volumes

22

0

50

100

150

200

250

300

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sh

ipm

en

ts (

m)

Reven

ue (

$b

n)

TV shipments against key component revenue

Memory MCU Display Driver Logic ASSP/SoC

Analog/Power LEDs Other TV set shipments


And more explicitly in the volumes of key

advanced technologies which have really

driven demand for advanced components

23

0

50

100

150

200

250

300

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sh

ipm

en

ts (

m)

Reven

ue (

$b

n)

Advanced TV technologies against component revenue

Key component revenues HD (incl. FHD) 3D Digital tuner Smart TV


TV sets are only one ecosystem, others,

such as set-top boxes also obey the same

rules back up the supply chain

24

Total TV sets

(935m)

Pay-TV STBs

(323m) High-end STBs

(149m)

North America, Europe 2011: TVs accessed by pay-TV


So we might ask ourselves what is driving

the growth and flattening of the pay TV set-

top box market

25

0

2

4

6

8

10

12

14

0

20

40

60

80

100

120

140

160

180

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Reven

ue (

$b

n)

Sh

ipm

en

ts (

m)

Global digital pay TV set-top box market

Cable Satellite IPTV Revenue


There is a superficial correlation between

pay TV subscribers and set-top shipments

26

0

20

40

60

80

100

120

140

160

0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sh

ipm

en

ts (

m)

Su

bscri

bers

(m

)

Global subscribers against set-top box shipments

Digital pay TV subscriptions Digital pay TV set-top box shipments


However it is much more complex, driven by

installed base breakages, subscriber churn

and subscriber net additions

27

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Set-top box drivers: US data (m)

Set-top box shipments Set-top box installed base

Total pay TV subscribers Net subscriber additions


The growth opportunity for set-tops is partly

driven by the number of TVs not currently

with a set-top

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

100

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

perc

en

t a

cc

es

sed

(%

)

Devic

es i

nsta

lled

(m

)

North America, Europe: TVs accessed by pay-TV set-top boxes

TVs accessed by digital pay-TV STB TV sets installed Percent accessed

28


But there is also a big future driver from IP-

capable (hybrid) gateway and client boxes

29

0

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Connectable pay TV STB shipments by STB type

IPTV STB DTH Hybrid STB DTH STB-Gateway

DTH Thin Client Cable Hybrid STB Cable STB-Gateway


Which is driven by increased global

broadband penetration

30

0

10

20

30

40

50

60

70

80

90

100

2000 2005 2010 2015

Broadband penetration of households (%) South Korea

Hong Kong

UK

France

USA

Germany

Japan

Australia

Italy

Spain

Czech Republic

Argentina

Turkey

Russia

Poland

China

Brazil

South Africa


However, broadband connectivity has also

had a impact on consumer behaviour

31

Digital Video

Internet closed network


The result is a fragmentation of devices in

consumers’ homes

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2010 2015

Pe

rce

nta

ge o

f d

evic

es

in

sta

lle

d (

%)

North America, Western Europe: percentage of devices installed

Tablets Connectable PMPs Connectable consoles Smartphone handsets

PCs Connectable TV sets Connectable BD

32


At a household level, TV sets are now

inundated with companion devices

0

1

2

3

4

5

6

7

8

9

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

De

vic

es

pe

r T

V H

H

North America vs. Western Europe: devices per TV household

North America: TV sets per TV HH

Western Europe: TV sets per TV HH

North America: IP connectable handsets, tablets, PMPs, consoles, PCs, TV sets, and BD players per TV HH

Western Europe: IP connectable handsets, tablets, PMPs, consoles, PCs, TV sets, and BD players per TV HH

33


Pay-TV investment has fragmented away

from large volume relatively complex STBs

34

Simple set-tops Complex set-tops Multi-device

Requirement To access

additional TV sets

To affirm a control

point in the home

Reactive against

changing consumer

behaviour

Example DTA in the US Multimedia Home

Gateways

Applications on

PCs, phones &

tablets

34


Creating severe revenue pressures on

major set-top suppliers

Vendor 2000 2010 CAGR

Cisco + SA 327 103 -10.9%

Motorola 281 95 -10.2%

Pace + Philips 275 66 -13.3%

Technicolor +

Hughes

230 72 -11.0%

Total Market 264 76 -11.7%

35

STB average selling price (€)

0

2

4

6

8

10

12

Re

ve

nu

e (

€b

)

Global STB revenue by vendor

Others

Cisco+SA

Motorola

Pace+Philips

Technicolor+Hughes

Vendor 2000 2010 CAGR

Cisco + SA 1,139 1,158 0.2%

Motorola 1,686 1,814 0.7%

Pace + Philips 1,339 1,365 0.2%

Technicolor +

Hughes

2,116 930 -7.9%

Total Market 8,005 10,998 3.2%

STB revenues (€m)


And each device type is driven by the same

logic of revenue from consumer spending…

36

2%

54%

10% 1%

6%

2%

2%

10%

12%

Western Europe 2011: consumer leisure spend

Pay-TV VoD

Pay-TV subscriptions

Games

Mobile Games

Mobile Video

Mobile Music

On-line video

On-line music

Physical music

Physical rental

BD disc rental

DVD retail

Cinema


…advertising revenue…

37

29%

22%

5%

24%

11%

7%

1% 1%

Western Europe 2011: advertising revenue

Television

Internet

Radio

Newspaper

Magazine

Out-of-home

Cinema

Mobile


…and ultimately device purchases

38

13%

3%

24%

18% 11%

26%

5%

Consumer electronics device purchases: 2011

Blue ray players

Blue ray recorders

Televisions

Game consoles

Set-top boxes

Media Tablets

Digital Media Adaptors

Thank You!


408 654 1707




Robust…

40


IHS Electronics & Media…

41

Consumer Electronics, Media,

and Telecommunications

Electronic and Industrial

Technology

Display Materials and Systems

Teardown Analysis

Connectivity, Electronics Manufacturing, and Semiconductors

VERTICAL RESEARCH PLATFORMS

HORIZONTAL

RESEARCH

PLATFORMS

PARTS , PROCUREMENT, AND SUPPLY CHAIN RISK MANAGEMENT


IHS Electronics & Media…

42

• Access to over 1,200 data transformation analysts and researchers, over

350 sector analysts and industry experts, and tens of millions of data

points

• Proprietary datasets, forecasts, perspectives, and market analysis

• Primary and secondary research methods

• Data modeling

• Regional and country-level granularity

• Pricing, cost modeling, and teardown analysis for thousands of devices

and products

• Automotive, consumer, industrial, and medical electronics as well

digital content creation / distribution market data and analysis

• Value chain assessments including: end-market reporting and

commentary; hardware, component, and services market share analysis;

supply & demand dynamics; spending; electronics design and

manufacturing; as well as production trends and capacities


For More Information

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