03 December 2007

The Future of Connected Mobile Computing

Ian Drew, ARM, wonders if the structure of the traditional computer industry can deliver the sustained levels of innovation needed to meet the demands of the new connected mobile computing market.

Mobile Growth Faster than PC Growth
The hunger for mobile communications is spreading rapidly beyond voice and text. Mobile phones are now poised to become the dominant internet platform outside the home. The smart phone market has already reached 150 million units, and internet access from a mobile phone now outpaces wireless access from a notebook PC in many areas of the world .  The compound growth rate for internet-enabled phones is approaching 50%. At the same time, unit sales of all mobile handsets increased by almost 20% in 2006, and will continue with double-digit growth for the next five years .

In stark contrast, the PC market is growing at a much slower rate: Gartner Dataquest estimates growth of less than nine percent in the first quarter of 2007, up from the same period in 2006. For the most part, it is immobility that hinders its progress: e.g. in the first quarter of 2007, desk-based PC sales in the nascent Chinese market grew at 10.1 percent while mobile PC growth was almost four times higher at 38.3 percent.

These market dynamics inform product design and innovation. Smart phone consumers want a lot of things. They don’t just want PC-style applications on the move. They want excellent performance and a simple and intuitive experience over the course of the day without once running out of batteries. And they want to find, use and send information whenever they feel like it. Consequently design teams must specify handsets that are low power, always connected, that incorporate excellent web browser technology and are highly differentiated. All of this demands hardware and software innovation. The question is what will sustain this demand for continued product innovation?

Intel and the PC Market
For many years Intel has played a dominant role in the PC hardware ecosystem. To stay ahead of the competition, it has invested heavily each year in developing and maintaining its proprietary silicon fabrication processes, which it tunes to the needs of its proprietary designs and target PC market. It has used its expertise to ensure high manufacturing yields, increase processor clock speeds and improve PC performance. However, during this time, the composition of the PC has not fundamentally changed – it has the same input and output devices, processor, memory systems and so on.

The Innovative Mobile Ecosystem
During the last 10 years, cellular handset design has evolved from one uniform product for voice communication to a raft of mobile devices with diverse features and form factors for different target markets. Functionality taken from digital still and video cameras, personal media players, satellite navigation devices, handheld games players and sub-laptop mobile computers has found its way into handset designs. What’s more, developers have to ensure that their applications work with the scarce hardware resources available.

As a consequence of supporting rich product functionality, the connected mobile computing industry has evolved into a vibrant, competitive and innovative ecosystem that continues to yield a rapidly expanding and diverse range of products.

The mobile ecosystem has developed to enable product differentiation. Design companies can license IP from multiple sources, use fabrication process technologies that suit their applications and choose manufacturers that are appropriate to their business models. OEMs can differentiate applications further still by integrating manufactured devices into final products and adding licensed operating systems and proprietary software.

The ARM Business Model and Innovation
Within this ecosystem, ARM designs and provides processor IP to chip designers and manufacturers, who then have complete choice in how to build on that IP to implement their mobile design ideas. Where necessary, they can form relationships with their choice of foundry partners so that they have an efficient route to manufacturing and a solution that is suited to their market and business model. As a result, tens of thousands of SoC engineers and hundreds of thousands of software engineers are creating millions of devices.

This degree of choice and flexibility is far more conducive to innovation and differentiation and allows manufacturers to customise devices for a broader range of markets. Having a broader supply base of silicon and software reduces the risk involved in innovation.

Supporting the needs of innovative design teams has doubled the number of ARM licensees from over 100 in 2002 to around 200 in 2006. The number of ARM processor-based product shipments has increased to something approaching 2.5 billion in 2006, while PC shipments remain more or less flat at around 250 million.

It is clear that the structure of the traditional computing industry is in marked contrast to that of the mobile connected computing market. The flexible and vibrant mobile ecosystem encourages new entrants and product diversity, two of the key ingredients that are needed for sustained innovation.

Find out more on Connected Mobile Computing.