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Yoshida in Vegas: How to walk away from smartphones
Junko Yoshida
1/14/2013 2:20 PM EST
LAS VEGAS – Meeting with Ambarella during CES was a revelation, largely because the low-power, HD video compression and image processing chip company turns out to be living proof of what was once thought impossible: A chip company–yes!--can walk away from smartphone sockets and still ride the wave of a rising smartphone tide.
By all accounts, 2012 was a horrible year for developers of advanced apps processors/LTE modem chips who were gunning for big design sockets in high-end smartphones.
Not counting Qualcomm and MediaTek, most companies ended up winning virtually zero design sockets. The few exceptions were nominal, and mostly insignificant, wins.
Samsung and Apple, both of which design their own chips and dominate the high-end smartphone market, virtually sucked the air out of many apps processor companies.
Several years ago, there were times when Ambarella briefly considered smartphones, pitching to handset guys the use of its low-power HD video codec as a differentiator. As a semiconductor startup armed with high-end video technology, why not aim high and go for smartphone sockets? After all, the digital still/video camera segment (Ambarealla’s core market) was tanking and warning signs were everywhere, predicting that everybody’s next digital camera would be everybody’s next smartphone.
Ambarella, however, wisely demurred on the plunge. At a time when apps processors keep integrating more and more multimedia functions, fighting the integration battle with your own standalone video codec/image processor chips didn’t seem like a prudent choice.
On the other hand, Ambarella’s fortunes faced an even tougher fate, when Kodak–Ambarella’s key customer--filed for Chapter 11 bankruptcy protection two years ago.
The encoder market in which Ambarella has always held a strong share, and a booming market for IP security cameras were the two obvious places Ambarella could go. And yet, neither seemed to have enough potential to make up for the decreasing DSC market (from which Ambarella was already suffering) and the rising smartphone market (from which Ambarella decided to walk away.)
Enter the world of sports cameras.
Ambarella's wireless sports cam reference design
Next: Why go wireless?
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iniewski
1/15/2013 10:12 AM EST
Interesting and positive story Junko...but what happens to Ambarella when Apple or Samsung decide to integrate that camera into the next gen smart phone? Kris
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junko.yoshida
1/15/2013 11:56 AM EST
Hi, Kris. Precisely for that reason, Ambarella walked away from the smartphone market. Instead, the company discovered a segment (tiny, wireless sports cameras -- sans displays of their own -- that you can wear on your vest or helmet, for example)that takes advantage of the smartphone.
But of course, if you are saying that those tiny wearable sports cames are going to become smartphones, yes, that could be a problem.
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iniewski
1/16/2013 10:41 AM EST
thank you Junko...yes, if they are truly successful and wireless sport cameras are purchased in large numbers a smartphone company can integrate this in...not an easy strategy to execute, you need to stay in the niche but you don't want your niche to become too large
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ughhhh
1/18/2013 1:46 PM EST
You can integrate a lot. But does it make sense? When I go skiing I will not clip my smartphone to my helmet. There a small WIFI camera makes sense.
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IDontUseTheForumSoWhyAmIForcedToMakeANickname
1/21/2013 9:21 AM EST
Using a phone as a dumb monitor is one of the best innovations I've seen in a while. You only need the display long enough to verify operation so why burden the consumer with the added cost of it. People tend to upgrade their phones every 2~3 years, but the camera should easily outlive that and still be useful. Why didn't I think of that?
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karophi
5/19/2013 1:58 PM EDT
I think people judges the quality of operating system and software along with processors and other hardware configuration when buying a smart phone. App developers like https://gripd.com/ are really making smart phone to a replacement option for laptops and desktops.
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James Walker
5/23/2013 4:38 AM EDT
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