The Commercial Market
MEMS Moves Stealthily into the Wireless Sector
Driven by innovation, pushed by legislation, and pulled by market need, wireless MEMS will experience strong growth in the next couple of years. In-Stat/ MDR reports that worldwide revenues for wireless MEMS (in the form of RF MEMS components and wireless MEMS sensors) will experience a 32.2 percent compound annual growth rate between 2001 and 2006, with the cell phone, automobile, and industrial processing/condition monitoring markets benefiting most from what the technology has to offer.
"Development of the MEMS piece of the wireless pie has required significant innovation at the engineering level, while the electronics that provide the wireless portion, by and large, are already well established," says Marlene Bourne, a senior analyst with In-Stat/MDR. "It is the pairing of the two that is opening the doors to markets and applications that have been waiting for such a breakthrough."
In-Stat/MDR also found that:
- While packaging hurdles appear to have been overcome for RF MEMS, the next real issue being faced is getting the devices into the market - no one has yet proven volume manufacturability.
- The use of wireless MEMS sensor networks has been limited to date by a lack of interface standardization and the basic question of which wireless standard to choose -both of which are quickly being resolved.
- Sales of RF MEMS (switches/relays, filters, inductors, etc.) are forecast to reach the $200 M mark by 2006, which is down considerably from earlier forecasts. This is the result of better pricing and volume guidance from companies in this brand new market segment.
- Sales of wireless MEMS sensors are forecast to reach about $700 M in 2006, largely based on the use of sensors in tire pressure monitoring systems. However this application is not yet a done deal - a pending government decision could either completely eliminate this segment beyond 2006, or provide for exponentially higher revenues.
New Ultra Wideband Report
Ultra Wideband (UWB) is a wireless technology that is trying to fill a void for extremely high data rate wireless connectivity, beyond what 802.11a/b and Bluetooth are capable of. Until February 14, 2002, when the Federal Communications Commission (FCC) approved commercial use of the technology, the military and the government were the only users of this technology. UWB has a data rate potential of greater than 100 times that of Bluetooth solutions and over twice as fast as 802.11a, while using 80 percent less power than current Wi-Fi implementations. UWB will allow for the transmission of video files and streams between digital TVs, projectors, camcorders, PCs, and digital set-top boxes. We can expect to see UWB-enabled electronics and chipsets devices to start appearing in 2003.
Allied Business Intelligence (ABI) forecasts the total global shipments for UWB-enabled electronics and chipsets under the moderate scenario could reach 45.1 million units by 2007, with resulting revenues of $1.3 B. These projections include shipments into market segments including communications, imaging, vehicles, locators and military and government use.
The new ABI report, "Ultra Wideband (UWB) Wireless - An Evaluation of Technology Prospects and Potential Market Applications," investigates the world markets of UWB and examines if this will be the next generation in wireless communications such as wireless LANs, personal area networks, imaging, vehicles, locators and radar. The report employs a scenario analysis approach (moderate, aggressive and pessimistic) in providing forecast for 20 different market segments through 2007.
Smart Appliances: Bringing the Digital Home Closer to Reality
Smart appliances cover a diverse range of products by both small and large companies. According to a report from In-Stat/ MDR, most segments have been affected by the economy and many smaller companies have been forced out of business or have been acquired by larger ones. However, there are still many small companies interested in smart appliances.
Smart appliances include two main categories: Internet-enabled consumer electronics and white-goods. Smart Internet-enabled consumer electronics include audio products, picture frames, analog Internet TV, and e-mail devices, while white-good segment is divided into major and portable appliances. Consumers remain confused about the value of smart appliances and whether they are worth the premium prices being demanded, and manufacturers remain concerned about applications, upgrade ability, standards, and subscription fee requirements. Internet and home networking penetration rates and price also affect the market for smart appliances.
There have been considerable product introductions in the Internet audio segment, which is expected to continue as manufacturers and consumers decide which applications are most desirable and prices decline. Products such as e-mail devices and Internet picture frames will be spurred on by continuing interest in complementary technology products and growing consumer awareness. These products have been primarily targeted to the North American market. However, this is beginning to change.
CDMA Leads the Pack in the Race to 2.5G and 3G Networks
The race to deploy more advanced wireless networks is in high gear in North America, with next generation CDMA networks currently leading, says Allied Business Intelligence (ABI). While both TDMA/ GSM and CDMA operators have picked up the pace in recent months, it is the CDMA operators who currently dominate this closely watched race. Extensive 2.5G coverage now exists in both the US and Canada for more than 55 million CDMA subscribers in the region.
While CDMA2000 1X technology allows operators to roughly double voice capacity and provide a theoretical data rate of 144 kbps, the GSM operators should not be discounted just yet. Despite the arduous transition from TDMA to GSM/GPRS, the next step for many North American GSM operators is EDGE technology, a much less complex transition. EDGE offers data rates more than double that of CDMA2000 1X. Of course, the CDMA camp has their answer to EDGE technology with higher evolutions of CDMA2000. This constant jockeying for dominance has heightened the awareness of both investors and consumers alike as they have become increasingly interested in observing the evolution of wireless technology.
"In North America, CDMA is clearly ahead, benefiting from its easier upgrade path from 2G. However, we cannot discount the enormous presence of GSM/GPRS networks in the rest of the world. In the end, spending on upgrading these networks to WCDMA will dominate total 3G investments over the next five years. It's important to differentiate between first deployed and total deployed," declares ABI senior analyst Edward Rerisi. He adds, "That said, we are still closely examining the situation in Europe for signs of a further delay in WCDMA."
In the end, the consumer will likely win as 3G coverage begins to proliferate worldwide. Despite the current lead of CDMA networks in the race to 3G, those based upon GSM technology will likely become more ubiquitous. In a new study by ABI, findings indicate that spending on GSM-based 3G networks, or WCDMA, will far exceed that of CDMA-based networks. The report, entitled "Wireless Base Stations: Global Deployment & Revenues for 2G, 2.5G and 3G Systems," reveals that WCDMA spending will represent a staggering 78 percent of total 3G investments over the next five years. Note that ABI considers CDMA2000 1X a 2.5G technology. Updated information on 3G developments will be available from ABI in first quarter of 2003 as part of the Wireless Base Station study.