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Calling video IP vendors to consolidate

Posted: 01 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:digital video? silicon IP? FPGA vendors?

Bier: There are roughly five gazillion vendors jockeying for position within the highly fragmented field of digital video.

Digital video is almost everywhere. The market for digital video intellectual property (IP) hardware and software components is wide open, with a number of opportunities for profit. There are roughly five gazillion vendors jockeying for position within a highly fragmented field.

Companies like ARC International and Tensilica Inc. are offering programmable and sometimes customizable hardware plus software silicon IP solutions for chip designers. Imagination Technologies Ltd and Hantro Products Oy, recently acquired by On2 Technologies Inc., are offering hard-wired silicon IP. Software companies like MainConcept GmbH are offering proprietary implementations of standards-based compression algorithms (codecs). Then you have a gaggle of other companies, like Droplet Technology Inc. and Ipera Technology Inc., that are selling proprietary algorithms for compression and pre- and post-processing.

Slew of software
Programmable chip vendors are increasingly providing software IP, along with their video chips. An example is the video codec software provided by Texas Instruments Inc. for its DaVinci chips. Likewise, for FPGA vendors and companies promoting massively parallel processors, there are applications like video post-production and surveillance.

With a few exceptions, the video IP market is characterized by a large number of small players. This market fragmentation is problematic for both IP vendors and their customers. If you're designing a video-oriented SoC, how do you go about choosing components that will work together? It's difficult to evaluate the video performance of a single IP block or chip.

Predicting the performance of a slew of interoperating hardware and software components from multiple vendors can be virtually impossible. It's anyone's ballgame, who among these IP companies (many of them are fledgling vendors with uncertain prospects) will survive.

On the flip side, if you're an IP vendor, how do you cut through the noise and get noticed? How do you gain customer confidence?

Fragmentation solution
Here's what I think needs to be done. Many of these companies with complementary products need to join forces and offer "one-stop shopping." By doing so, the IP vendors will benefit from economies of scale and can potentially reduce both real and perceived risks.

Meanwhile, SoC and system designers will have more clear-cut choices and can spend less time banging their heads against a wall to find all the pieces they need and make them work together.

Unfortunately, this is unlikely to happenat least, not on a large scale. This is partly because many video IP vendors are backed by venture capital, and they tend to take an all-or-nothing approach. They shoot for the stars in terms of their return on investment via a public offering or highly profitable acquisition. If it doesn't work out, they throw in the towel.

This approach doesn't lend itself to, for example, a handful of small IP vendors joining forces. However, there may be an opportunity for established companies with cash on hand to scoop up some of these smaller video IP companies, as Dolby Laboratories did with its acquisition of Coding Technologies (that's in audio market, but the same reasoning applies). Some good technologies are out there and can be integrated into a bigger-picture product. Little consolidation might be just what the market needs.

- Jeff Bier
Berkeley Design Technology Inc.

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