PC-TV Tuner Technology Directions

Chris MatichukProgram ManagerMicrosoft Corporation, eHome

Gerry KaufholdPrincipal AnalystIn-Stat, http://www.in-stat.com

2010Every Multimedia PC Has A TV Tuner

Multimedia PC users take for granted that TV just works

Mainstream TV Tuners Generate New Revenue OpportunitiesConsumers with a TV Tuner

Are 5 times more likely touse Media Center daily*Have 2 times more multimedia content*

* Compared to the average Windows with Media Center PC buyer(Microsoft, U.S. data, July 2006)

Tuner

Consumers Want The Features Enabled By A TV TunerHalf of the U.S. consumers who do

not get a TV tuner with their PC express interest after hearing the feature description

(Microsoft, U.S. data, July 2006)

How Do We Get To Mainstream TV Tuners?

Product – TV Just WorksPC is accepted as a viable TV platformAll free to air broadcast formats supportedDriver quality, reliability, and availability

Price – CommoditySemiconductor integrationLow cost per feature

Promotion – Multimedia PCTVWindows with Media Center proliferationPC OEM advertisingSystem logo

Beyond Mainstream TV Tuners

Mainstream TV tuners will generate increased opportunities

Multiple tunersHardware encodeAdvanced codecs

H.264, VC1

Transcode PlaceshiftingHD-DVD/Blue-Ray burning

Premium contentCable, Satellite

Conditional access descramblingDigital rights management

Semi

Chips and Interfaces Reference DesignsDriver

Maintenance

IHV

SoftwareHardware

IHV

Hardware

ODM

Build and SellTuner

Solution

CM

Build Tuner

PC OEMs

RetailChannel

s

CM

Build Tuner

Semi = Semiconductor ManufacturerODM = Original Development ManufacturerCM = Contract Manufacturer

In-StatMoving PC-TV Tuners into the Mainstream

Gerry KaufholdPrincipal Analysthttp://www.in-stat.com

partner

It’s A Global Ecosystem

HardwareSemiconductors

Reference Designs

PCs with Tuners

Broadcasters offering special services

SoftwareOperating System

Device Drivers

Applications

Maintenance and Updates

PC-TV Market Obstacles

PC-TV only viewed as a hobby, with “some user assembly” requiredCountries rolling out Digital Terrestrial TV (DTT) services with unique featuresNeed for multiple PC-TV Tuners in each PC to support user’s expectationsProgramming guides need to be more automated

PC-TV Tuner Market Growth

People like their PCs, and like to customize their TV Viewing experiencePeople with PC-TV Tuners regularly use more rich media, they are the hot marketPC-TV Tuners are being integrated into smaller footprints, prices coming downThe mobile segment is taking offPlace shifting seems like a natural extension for Broadband PCs

PC-TV Tuner Trends By Region Europe

Largest market, driven by Free-to-Air (FTA) Terrestrial and Satellite TV servicesLaptop and Mobile computing segments showing strong growthEuropeans ride public transportation, giving them time to view rich media on their portable laptops and other devicesDigital Terrestrial TV also driving growth

PC-TV Tuner Trends By Region Asia

Digital Terrestrial still getting its legs-DTT to take off in late 2009Japan rapidly transitioning from NTSC to ISDBChina market exploding for analog tunersSmall living quarters encourage using a PC for the family entertainment centerMobile segment is taking off

PC-TV Tuner Trends By Region North America

U.S. ATSC Digital Terrestrial not popularCable TV MSOs moving slowly with Clear QAM and Digital Cable Ready (DCR)Not much Free-to-Air satellite servicePay-TV services provide PVR STBsSatellite TV may lead the way with Broadband PCs that include tunersIntel Viiv™ and AMD Live promoting Tuners

The ForecastUnits

Regional Shipments of PC-TV Tuners

2007 2008 2009 2010 2011

North America

Europe

Asia

Row

Worldwide (Thousands)

49,700

Source: In-Stat 03/07

The ForecastU.S. Dollars

Regional Value of

PC-TV Tuners

2007 2008 2009 2010 2011

North America

Europe

Asia

Row

Worldwide (U.S.$

Millions)

$3,298.9

Source: In-Stat 03/07

The Future

PC-TV Tuners need to bridge the gap from hobby products to mainstream

Digital Terrestrial TV and Free-to-Air Satellite will be key technologies that need support

Mobile reception adds new opportunities

Country-specific solutions will arise

Combo PC-TV Tuners are comingSupport for multiple video streams

Support for DTT, analog, and broadband

Broadband PCs can support interactivity

Drivers for all this still need to be managed

IPGs And Interactivity

Interactive Program Guides (IPGs) on the PC provide improved search capabilities for upcoming TV shows, and for content stored on the PCIPGs can access up-to-the-minute web Content that enhance users’ experiencesBroadband-connected PCs with PC-TV Tuners can provide interactivity-Imagine pausing a TV show and watching a Honda ad from the InternetHuge opportunities will arise

PCs Are A Natural Nexus

PC-TV Tuners provide access to great TV Content from many sourcesBroadband PCs bring in the Internet

Provide greatly enhanced search for IPGsProvide access to Internet videoPermit sharing of video and social networking

The Future of TV may come from PC-TV Tuners on Broadband PCs

Nexus: n, Tie, Link, Connection

Moving PC-TV Tuners Into The Mainstream

PC-TV Tuner Ecosystem must adopt “in box” drivers to provide the best supportSemiconductor manufacturers need to lead the technology to drive standardization and ramp up volumesPC-TV Tuner products need to be as standardized as printers, DVD ROMs, video cards, and disk drives

Microsoft Vista sets the stage

Windows Update fulfills the promise

In-Stat contacts:Gerry Kaufhold,

Chris Kissel,

http://www.in-stat.com

Gkaufhold @ reedbusiness.com

Ckissel @ reedbusiness.com

Chris MatichukProgram ManagerMicrosoft Corporation, eHome

Growth Beyond 2010

In-Stat (2007) forecasts 22.3M tuners in 2007 growing to 49.7M in 2010

Is there opportunity for higher growth?Consider that the Total Available Market will reach several hundred million units by 2010/2011

What’s The Tipping Point? *Product and price improvements?

Promotion improvements?

Can we learn from high attach rate geographies?

In 2005 timeframe, the tuner attach rate in Japan was ~90% consumer desktops with tier 1 OEMs

* See “The Tipping Point”, by Malcolm Gladwell, Back Bay Books

A Retail Opportunity To Drive TV Tuner Attach RateMost U.S. consumers are unaware of

TV tuner options at the time of purchaseHalf of the U.S. consumers who did

not get a TV tuner with their system express interest after hearing the feature description

(Microsoft, U.S. data, July 2006)

Promoting PC-TV features in retail will increase TV tuner attach rate and drive

higher multimedia usage

What About Cost And Differentiation?

Integration will result in single chip hybrid tunersWould a sub-$10 BOM for a WW analog/digital, free to air, single chip, low power tuner lead to mass adoption?

Added value differentiators will include transcoding, hardware encode, dual and quad tuners, advanced codecs, premium content, conditional access, and digital rights management

Analog Hybrid Hybrid

ProductTV just worksBroadcast formats

DVB-S2, ATSC-M/H,QAM, DMB, DVB-H

PremiumISDB, Cable, Satellite

CategoriesTranscodingNetworkedMobile

Reliability, distribution

Improved reference driversInbox driversWindows Update

PriceSemiconductor integration More features at the same priceLower cost form factorsAnalog software encodeIntegrated IR

MotherboardTuner

Where Are The Opportunities?Promotion

Point of sale consumer education, flashy TV demo’sPromote aftermarket tuner upgradesTV tuner as a standard feature on multimedia systemsTuner logoSystem logo

Call To Action

Drive PC-TV tuner adoptionShip PC-TV as standard with every multimedia PC

Actively market PC-TV features in retail outlets

Invest in new TV Tuner formats and categories that will continue to expand the business

Continue to improve the end user experience by ensuring the most reliable drivers are available

Promote tuners supported by Inbox Drivers

Require the most recent approved/tested driver on Windows Update

Additional ReferencesMicrosoft

Contact: Chris Matichukhttp://www.microsoft.com/whdc/device/stream/AVstream.mspxhttp://winqual.microsoft.com/HCL/ProductList.aspx?cid=111 http://www.microsoft.com/windowsxp/mediacenter/partners http://www.microsoft.com/windowsxp/expertzone/communities/mediacenter.mspx

In-StatContacts:

Gerry KaufholdChris Kissel

http://www.in-stat.comhttp://www.in-stat.com/catalog/mmcatalogue.asp?id=212 (content)http://www.in-stat.com/catalog/mmcatalogue.asp?id=162 (equipment)http://www.instat.com/descriptions/semiconductor.asp (research)

wintvdev @ microsoft.com

Gkaufhold @ reedbusiness.com

Ckissel @ reedbusiness.com

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