This is a frightening time to be in the consumer electronics (CE) market. As I noted in an earlier blog, market researcher iSuppli expects the CE markets to experience slower growth in the future, and predicts that this slowdown will doom anybody smaller than Apple. This week we got more bad news: Market researcher Forward Concepts reported that the recent drop in DSP shipments was largely due to a 30% drop in shipments to the consumer market.
Not surprisingly, industry executives are getting worried about these trends. Last week LSI Logic revealed that it may kill its consumer electronics business. This is a remarkable development: Chips for DVD recorders, set-top boxes and other CE equipment were once LSI's main business.
Adding to the gloomy talk, the CEO of Advanced Semiconductor Engineering, told a conference that companies will have to accept ongoing price erosion and focus on "maintaining margins, not maintaining prices." He said companies would be forced to either produce nothing but intellectual property, or to focus on manufacturing excellence and economies of scale.
So what should you do if you are a small- or medium-size designer of consumer electronics? Should you heed the advice of the cynics and get out of the CE business as fast as you can? I say no—you just need to know how to compete with the big players. Here's how: Build innovative products and keep your costs low.
If that sounds like trite advice, let me back it up with something more practical: make sure you build your products on a platform that is flexible enough to let you innovate, yet optimized enough to keep your costs down. To keep costs low, it is also important to pick a platform that is part of a broad family of solutions. This lets you stick with the same platform from one design generation to the next, and lets you easily scale the design to include more or fewer features.
Two platforms that meet these requirements are TI's DaVinci and Analog Devices' Blackfin. I like DaVinci for mid-to high-end designs. The family offers impressive processing power, and it is supported by a large library of audio and video codecs. I like Blackfin for lower-end products, particularly for portable products. Blackfin offers impressively low power—as low as 0.16mW/MHz for the latest chips. In addition, ADI recently introduced a SimuLink code generator that makes it easier than ever to create innovative designs on this platform.