Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Controls/MCUs

Easy money? No such thing

Posted: 16 Jan 2003 ?? ?Print Version ?Bookmark and Share

Keywords:arm ltd.? intellectual property? core licensing? complementary offerings? adelante technologies?

BTDI's Jeff Bier believes that new core vendors can survive in teh market today, provided they "deliver compelling, comprehensive offerings, products that solve more problems than they create."

Jeff Bier is General Manager of Berkeley Design Technology Inc.

ARM Ltd recently announced two unhappy firsts: its first-ever quarter-to-quarter sales decline and its first layoffs. Until then, ARM seemed to have discovered a bulletproof business model that was easy to mimic: Just whip up a core, license it and let the royalty checks roll in. Indeed, ARM's previously uninterrupted ascent, coupled with the ready availability of venture capital, gave rise to a flood of new processor core licensors in the late 1990s.

In truth, core licensing is anything but foolproof; success requires far more than slapping together a core. Chip development is a difficult, expensive, and time-consuming process; forcing licensees to start with a poorly supported, bare-bones core just makes things worse. Stand-alone cores become even less attractive as increasing chip complexity and shrinking process geometries make chip development harder. Core vendors' very survival (never mind success) hinges on the availability of complementary offerings such as world-class development tools, application software components, and supporting services.

Unfortunately, too many would-be ARMs vastly underestimated the importance of these complementary offerings. An all-too-common strategy among upstart core vendors was to offer a core and some rudimentary software development tools. In the past year, many of these companies have realized the error of their ways and have begun to develop comprehensive solutions for applications such as VoIP and 802.11. But with so much ground to make up, these efforts may be too little, too late.

In contrast, leaders like ARM have made complementary offerings a cornerstone of their strategies. For example, ARM immediately followed the launch of its ARM11 core with the announcement of an ARM11-based version of its wireless platform. Moreover, some newcomers have emphasized their complementary offerings: since its launch last year, Adelante Technologies has promoted its cores as part of a package that includes complementary intellectual property (IP) and tools, for example.

Although the flood of new core licensors has slowed to a trickle, a few new vendors continue to emerge. Can today's market support them? Maybe - but only if they deliver compelling, comprehensive offerings, products that solve more problems than they create.

- Jeff Bier

General Manager

Berkeley Design TEchnology Inc.

Article Comments - Easy money? No such thing
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top