Yoshida in Vegas: How to walk away from smartphones
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