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Industry News

The Commercial Market

October 1, 2001
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The Commercial Market


RF MEMS to Bring Functionality and Efficiency to Cell Phones
With true on/off switching, RF (radio frequency) MEMS hold considerable market promise, according to Cahners In-Stat Group. The report, "Market Snapshot: RF MEMS," projects that if developmental issues can be overcome and appropriate pricing levels are reached, revenues for RF MEMS switches and relays will grow from just over $1 M in 2001, to nearly $350 M by 2006.

There are a number of applications in which RF MEMS is the ideal answer to a specific need, according to the report. RF MEMS will have the greatest impact on the cell phone segment, where technology will enable the design of next generation products that are much more functional with increased efficiency. With upwards of one billion cell phones forecast to be sold in 2005 and each integrating at least one (and in some case multiple) RF MEMS, there is no doubt this market provides tremendous opportunity. But In-Stat reports that initial penetration will be limited by price. RF MEMS solutions are currently too expensive for all but the highest-end cell phones and certain developmental issues must still be overcome. Given potential unit volumes and the MEMS method of manufacture, competitive prices can be attained. However, the primary constraint at this point is the burden of packaging and its associated costs.

RF MEMS have met (and surpassed) the size, power consumption, insertion loss and isolation challenges of current switch/relay technologies. However, there still remains work to be done in terms of life cycle, reliability, price and packaging.

Other RF MEMS devices such as inductors, capacitors and filters, will be used in conjunction with MEMS switches and relays to improve the quality of wireless devices and the tunability range of their circuits.

Remote Workers to Drive Demand for Business Broadband
Growing numbers of remote workers and telecommuters are driving increased demand for broadband services and equipment across business of all sizes, according to a set of recent reports from In-Stat/MR. The reports, "All Business is eBusiness: Demand for Broadband Services & Equipment in the Small, SOHO, Middle and Enterprise Markets," determined that over half of the US workforce perform their jobs in what could be considered remote sites. The bulk of these workers are in small remote branch offices or are telecommuters in 2001. By 2005, In-Stat expects more than 60 percent of the workforce to be considered remote, driving continued need for remote connectivity and high speed access for remote workers.

For several years, US businesses have slowly fragmented into multiple remote sites, including telecommuters' home offices. This trend has accelerated over the last few years. Increased availability of broadband access, like cable modem and DSL services, has certainly facilitated, if not enabled, the recent increase in remote workers. The reports expect fragmentation to continue, as businesses continue to accommodate highly skilled professionals by allowing them to work from home, also in tandem with keeping employees closer to customers in branch offices around the globe.

However, businesses face a growing number of challenges supporting their remote workforce, adds Burney. She points out that remote workers can strain IT resources and, according to research, are becoming more of a priority for business decision-makers in the US. This presents service providers with a host of opportunities to address the changing needs of these workers. From VPN connectivity to hosted applications, US businesses are looking for solutions for their remote workers' needs. Outside services, including broadband solutions, are becoming the best choices for these customers.

Image Sensor Market Defies Tech Industry Malaise
The market for image sensors, semiconductor devices that convert photons to electrons for display or storage, is booming in terms of both units shipped and revenue, according to a report from Cahners In-Stat Group (http://www.instat.com). The report, "The Big Picture: CCDs, CMOS & the Image Sensor Market," projects that, in 2000, just under 100 million image sensors were shipped worldwide, for a total revenue of nearly $1.2 B. The largest applications for image sensors in that year included area applications such as camcorders, digital still cameras, PC cameras and linear applications such as fax machines and scanners. In the next five years, cameras for cell phones, PDAs and automobiles are expected to be among the fastest growing applications.

The image sensor market has seen an unprecedented change over the last five years, and that change will continue into the near future. One of the most visible changes will be in the types of image sensors that will dominate the market. CMOS image sensors will continue to make great strides in the image sensor market at the expense of charge-coupled devices (CCD). In 2000, CMOS sensors consisted of just under 15 percent of image sensors shipped. Because CMOS image sensors cost less, consume less power and can integrate many functions on chip, they will experience increasing popularity, particularly in applications where cost, power or size are a primary concern, including PC cameras and mobile phones.

Despite CMOS' increased popularity, CCDs will remain an important force on the image sensor scene. They will continue to stand out in applications such as camcorders and digital still cameras, and dominate high margin, low volume applications such as medical, scientific and industrial cameras.

Mobile Commerce is Young, but Growing
With 2001 having not yet been a financial success for most carriers around the world, mobile commerce is indeed a work in progress, according to a report from Cahners In-Stat Group (http://www. instat.com). The report, "Mobile Commerce: A Work in Progress," estimates that, on a global basis, 9.2 million wireless subscribers were m-commerce users at the end of 2000, representing a total value of $264 M. Despite these disappointing figures, m-commerce has come a long way in its brief existence as a value added WAP service. Valuable lessons learned by carriers, content providers, wireless application service providers and others in the value chain will help m-commerce transactions to grow slowly during the next five years, except in Japan, where $2.3 B in transactions are forecast by 2005.

According to the report, the main reason for the slow uptake of m-commerce is that services were launched before they were ready. Carrier networks were inadequate to handle the e-commerce-like shopping experience that was promised to subscribers. To improve the state of m-commerce, it will be necessary to avoid repeating the mistakes that have already been made. Packet switched services such as GPRS promise to make the m-commerce experience much more pleasurable and mobile advertising may become an important revenue-generating opportunity during the next few years. However, until user preference and privacy issues are addressed, advertising may not have a sizable impact. In addition, location-based services may be a windfall for m-commerce as soon as cost-effective, real-time platforms are deployed. As an m-commerce strategy, it will also be important for carriers to target services to members of the so-called Generation Y. They tend to be quicker adopters and faster learners of new technology than other non-business niches. In the end, carrier success will be determined by the capabilities of networks and handsets, the quantity and quality content and applications, and the ancillary services required to enable users to make purchases.

SMS (Short Message Service) is frequently overlooked as a key enabler of m-commerce, both as a method to initiate transactions and as a trigger for wireless data use. SMS is widely used throughout the world and carriers must leverage this usage to spur m-commerce adoption.

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