Sustaining profitable growth in Mobile
Mario RivasExecutive Vice President Communications Businesses
Philips SemiconductorsFinancial Analysts Day 2004
Semiconductors 2
Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface
• Summary
Semiconductors 3
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
Broadcast
DAB
GPS
FM radio
Mobile TV
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack SoftwareRF
Pipe
MultiMed
ia
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Sustaining market position in the mobile Connected Consumer markets
Source: Gartner, Display Search, IDC,Philips Market Intelligence - 2003/2004
GSM SystemSolutionstop tier
Digital Cordless
#1
Speaker systems#1
RF identification#1
FM Radio#1
Display Modules#2
WirelessConnectivity
#3
Bluetooth
#3
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17%
9%
7%7%
60%
Sales by application type Sales by region
22%3%
75%
Balanced segment communication sales By application & region (excl. MDS)
Europe Asia Pacific North AmericaCellular Terminals Cordless
Cellular Infrastr. Connectivity
Other
Source: Philips based on 2004 H1 sales
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Highlights of the past year
• Traction of Nexperia Mobile with leading handset manufacturers
• Nexperia Mobile for EDGE being deployed in leading handset manufacturers, like TCL & Alcatel Mobile Phones
• Demonstrated industry’s best performing Bluetooth / WLANco-existence solution
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Highlights of the past year
• Cooperation on NFC with our key customers – Nokia, Samsung
• Joint cooperation on RFID solutions together with IBM and Checkpoint
• Great Wall of China adopts Philips’ MIFARE technology for contactless ticketing
• Gemplus: high-end SIM cards for telecom operators
Semiconductors 8
Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security– Personal media player – User interface
• Summary
Semiconductors 9
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
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Traction of our Nexperia Mobile system solutions
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System solutions grow faster than total market
Source: Philips Market Intelligence – August 2004
0100200300400500600700800900
1000
2002 2003 2004 2005 2006 2007 2008 2009
Total System Solutions
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Smartphone
High-end Feature Phone
Mid-range Feature Phone
Basic Entry Phone
Ultra Low-end Phone
Nexperia Sy.Sol 9000
Master Application Engine running Open OS
+ Slave Modems (Cellular, Bluetooth, WLAN)
Nexperia Sy.Sol 7000 (UMTS)
Nexperia Sy.Sol 6000 (GPRS/EDGE)
Feature centric - TTM driven
Nexperia Sy.Sol 5000
Voice centric - Cost driven
GSM GPRS
A Nexperia solution for every mobile phone
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Nexperia Sy.Sol 3000200 components
baseband: 6 MIPS
Nexperia Sy.Sol 5100/6100150 components
baseband: 60 MIPS
Nexperia Sy.Sol 6200100 components
baseband: 200 MIPS
1.5 year 1.5 years
20052003/42002
Nexperia Mobile (system solutions)Innovation & Integration
Semiconductors 14
Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface
• Summary
Semiconductors 15
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
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0%
10%
20%
30%
40%
50%
60%
70%
80%
2002 2003 2004 2005 2006 2007 2008
MP3 MMS
MultimediaPenetration of multimedia features in handsets
Source: Gartner, IDC, Strategy Analytics, IMS research, ABI research, Philips Market Intelligence – August 2004
Multimedia messagingMP3
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Sony Ericsson P900
Nexperia MobileInnovation and integration
• To further grow we had to innovate the market…
• …and integrate multimediaand display capability into Nexperia Mobile
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Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface
• Summary
Semiconductors 19
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
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Applications penetration forecast 2002-2008
0%
10%
20%
30%
40%
50%
60%
2002 2003 2004 2005 2006 2007 2008
TV A-GPS FM radio
BroadcastPenetration of broadcast features in handsets
Source: IDC, Strategy Analytics, IMS research, ABI research, Philips Market Intelligence – August 2004
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FM radio• World’s smallest FM radio & complete family
range of IC’s: FM only, AM/FM and FM+RDS• New growth trend: interactive radio
Mobile TV• Broadcast and Mobile Convergence project,
co-operation in Berlin between Nokia,Philips, Universal Studio’s and Vodafone
• Driving a new standard for Digital TV on mobile phone
• Philips is developing a thumbnail sizeTV receiver chip-set
Broadcast
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Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface
• Summary
Semiconductors 23
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
Semiconductors 24
Applications penetration forecast 2002-2008
0%
10%
20%
30%
40%
50%
60%
70%
80%
2002 2003 2004 2005 2006 2007 2008
WLAN NFC USB Bluetooth
ConnectivityPenetration of connectivity features in handsets
Source: Gartner, IDC, Strategy Analytics, IMS research, ABI research, Philips Market Intelligence – August 2004
• Bluetooth continues to expand and be the dominant technology
• BT / WLAN combo will be the new connectivity technology in mobile
• NFC, for added security and ease of use, is growing fast
• USB-OTG shows steady growth, and is well used to link to laptop / computer
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Wireless evolutionIndustry smallest & lowest power coexistence solution
• Shrink silicon– CMOS 90– Physical I/O limitation
• System in a Package (SiP)– Integrates RF and baseband in single package– Eliminates RF engineering– Breakthrough size; footprint of standard HVQFN IC package– Eliminates up to 30 components
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Paymenteverywhere:
Mobile phone= POS
Access to public transport:Mobile phone = transport card
Building access:Mobile phone = key
Exchange business cardsMobile phone= electronicbusiness card
Take infofrom poster:
Mobile phone =information vehicle
Micro-payments:Mobile phone = debit card
NFC-enabled mobile phone applications
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NFC is here today
• Being deployed in the handsets ofall major manufacturers
• ISO standard available
• NFC chips available
• NFC-enabled devices later in 2004
• NFC Forum moving forward –Philips, Sony and Nokia
• Backwards compatible to contactlesschip technology as used in smart cards
• Applications … the sky is the limit
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Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security– Personal media player– User interface
• Summary
Semiconductors 29
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
Semiconductors 30
Personal media player
Portable Audio playersNexperia Personal family of audio playerICs - single chip solution for portable flash memory and hard disk MP3 players
Nexperia Personal Multimedia playersNexperia Personal family of audio and multimedia player ICs - a natural fit for audio / image storage applications
Nexperia Personal Media player reference designAddressing the growing market opportunity for portable media players recorders for the high end market, includes audio / imaging / video player
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Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – User interface
• Summary
Semiconductors 32
Broadcast
DAB
GPS
SpeakersMicrophonesDisplays
User Interface
Cameras Sensors
Application Software
MobileMultimedia
Connectivity
RFIDBluetooth Wi-Fi
WiMAX UWBUSB OTG
NFC
Security
System Solution
RF
PA PMU
Application Software
Baseband
Protocol Stack SoftwareProtocol Stack Software
FM radio
Mobile TV
Semiconductors 33
Dominant resolution Dominant size Main mobile services and applications
VGA 640 x 480
HVGA 320 x 480
CIF+ 352 x 440
QVGA 320 x 240
QCIF+ 176 x 208-220
132 x 176
128 x 160
128 x 128
96 x 64
96 x 32
2.2 – 2.4”& above
1.9 – 2.2”
1.5 – 2.1”
1.5 – 1.9”
~ 1.1 – 1.6”
MonoSTN
4/65 KSTN
65/262 KA-Si
262 KLTPS
16 MilLTPS
65/262 KOLED
Color depth
SMS, RT
MMS,camera
MMS
MMS,camera,video clip
Videostreaming
MMS,camera,video clip
Videostreaming Fashion
MMS,camera
The display technology evolution
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Dominant resolution Dominant size Main mobile services and applications
VGA 640 x 480
HVGA 320 x 480
CIF+ 352 x 440
QVGA 320 x 240
QCIF+ 176 x 208-220
132 x 176
128 x 160
128 x 128
96 x 64
96 x 32
2.2 – 2.4”& above
1.9 – 2.2”
1.5 – 2.1”
1.5 – 1.9”
~ 1.1 – 1.6”
MonoSTN
4/65 KSTN
65/262 KA-Si
262 KLTPS
16 MilLTPS
65/262 KOLED
Color depth
SMS, RT
MMS,camera
MMS
MMS,camera,video clip
Videostreaming
MMS,camera,video clip
Videostreaming Fashion
MMS,camera
The display technology evolution
Semiconductors 35Semiconductors
Smart – phonesPersonal Info Mgt
High – endVideo Editing, Music, MMS
Still Pics, > 3Mega Pixel camera
Mid RangeVideo & Music Playback,
MMS, Still Pics,VGA to 1.X Mega Pixel camera
BasicMMS, RT, Still Pics,
CIF camera
Ultra Low EndVoice, SMS
Retail PricePts
> US$ 350
> US$ 300
US$150 ~ 300
US$70 ~ 150
US$50 ~ 70
Handset Segment &Main Application Main Display Key Specs Requirement
110 M Pcs(3%)
US$ 2.57 BIL(5%)
389 M Pcs(12%)
US$ 9.5 BIL(19%)
1.130 M Pcs(36%)
US$ 24.7 BIL(48%)
1.184 M Pcs(37%)
US$ 13.4 BIL(26%)
378 M Pcs(12%)
US$ 0.97 BIL(2%)
Source: Display Search, MDS Management Estimates
50% of mobile display value will come from Mid-range segment in Handset market
The future outlook of handset evolution and the value of mobile display
2004 ~ 2008 Main Display Volume & Value
a-Si 65K QCIF+, LTPS 262 K QVGA, 2.2” – 2.4” or above
LTPS, 65K / 262K color,QVGA & VGA,
2.2” – 2.4” or above
MSTN , 96 x 32 , 96 x 64, 1.1” – 1.5”
CSTN, 4K to 65K color,128 x 128, 128 x 160,
1.1” – 1.5” – 1.9”
a-Si or LTPS, 65K colorQCIF+, 128~132 x 160~176
1.5” – 1.9” – 2.2”
Semiconductors 36Semiconductors
Mid RangeVideo & Music Playback,
MMS, Still Pics,VGA to 1.X Mega Pixel camera
Retail PricePts
US$150 ~ 300
Handset Segment &Main Application Main Display Key Specs Requirement
1.130 M Pcs(36%)
US$ 24.7 BIL(48%)
Source: Display Search, MDS Management Estimates
50% of mobile display value will come from Mid-range segment in Handset market
The future outlook of handset evolution and the value of mobile display
2004 ~ 2008 Main Display Volume & Value
a-Si or LTPS, 65K colorQCIF+, 128~132 x 160~176
1.5” – 1.9” – 2.2”
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LifePixTM
Series of algorithms that improve picture quality of mobile displays
Most complete color enhancing solutionon the market for optimal brightness and color
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Agenda
• Update Communications businesses
• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface
• Summary
Semiconductors 39
Summary
Nexperia Mobile has gained market acceptance• Enabling the right applications by offering the right features• Evolving, innovating and integrating - in the areas of broadcast,
connectivity, display modules and other user interface solutions
Embedding the right software• Choosing the right partners• Gaining access to the right IP• Embedding it in the system - at the right time - for the market
Convergence provides new opportunities…• Mobile meets Home – portable consumer merging with mobile
applications• Philips’ unique positioned