Sustaining profitable growth in Mobile -...

Sustaining profitable growth in Mobile

Mario RivasExecutive Vice President Communications Businesses

Philips SemiconductorsFinancial Analysts Day 2004

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Agenda

• Update Communications businesses

• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – Personal media player– User interface

• Summary

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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


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

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Agenda


• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security– Personal media player – User interface

• Summary

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Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


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

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Agenda



• Summary

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Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


Baseband


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



• Summary

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Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


Baseband


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



• Summary

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Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


Baseband


FM radio

Mobile TV

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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


• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security– Personal media player– User interface

• Summary

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Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


Baseband


FM radio

Mobile TV

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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


• Nexperia Mobile– System solutions– Mobile multimedia– Broadcast– Connectivity & Security – User interface

• Summary

Semiconductors 32

Broadcast

DAB

GPS


User Interface

Cameras Sensors


MobileMultimedia

Connectivity

RFIDBluetooth Wi-Fi

WiMAX UWBUSB OTG

NFC

Security

System Solution

RF

PA PMU


Baseband


FM radio

Mobile TV

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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


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


Videostreaming


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



• Summary

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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

Sustaining profitable growth in Mobile -...

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