Zoran Sees Converter Sales Outrunning Coupon Program

Zoran, which supplies its SupraHD 741 processor for many converters, forecasts industrywide sales of 30 million units by the Feb. 17, 2009 analog cut-off, Pederson said. A “few million more” units will sell by the end of the coupon program in July, he said. Requests for the $40 coupons must be sent by March 31, and last of them redeemed by July 9. Without a coupon, most converters sell for about $60, a price likely to stick once the program ends, Pederson said. A “number of features” like EPGs, could be added to the box platform without “significant cost,” he said.

“Earlier I would have said it was going to tail off pretty fast, but given what some of the ODMs and retailers are looking at the replacement market and feature upgrades, it might continue,” Pederson said. “Once the coupon becomes a non-issue, it allows you to add features to the platform to make it more functional than just a channel zapper. I don’t think it’s going to come to an abrupt halt, but rather a nice tail off over 18 to 24 months.”

Converter sales began sluggishly amid consumer confusion over analog passthrough, Pederson said. But once that feature was added, sales grew, he said. Zoran moved its platform to a silicon-based tuner after can-enclosed tuners ran short, Pederson said. Zoran hasn’t named its silicon- based tuner supplier, but Microtune is among those developing such chips. By fall Zoran expects to move largely to a silicon-based tuner, he said. Silicon-based tuners are “slightly less expensive” than canned models, but a market will exist for both products, Pederson said.

“Demand ramped faster than the tuner makers expected,” Pederson said. “The companies that secured supply for tuners-in-a-can will continue, but we had some customers that didn’t and were unable to get volumes to meet their needs.”

In addition to the converter market, Zoran expects to introduce updates of its SupraHD processors for flat-panel TVs. Among these will be a replacement for the SupraHD 780 now sampling with customers that will land in DTVs in the first half 2009, a spokeswoman said. The new chip will focus on screen sizes 40 inches and up, supporting 1080p resolution and 120 Hz frame rates, Pederson said. Some chips will work with three HDMI connectors on the front end, he said. There also will be a replacement for the SupraHD 670 that’s for the European PAL market, Pederson said. Zoran scored a design win for the SupraHD 670 with Funai, which is using it in 47W and 52W LCD TVs shipping this fall. Zoran didn’t disclose its production partner for the new processors, which will feature 300 MHz clock speeds.

“We've done some things with dynamic noise processing as far as being able to clean up some legacy video issues,” said Pederson. “The backend improvements before the display are pretty significant as well as yet another step up from previous generations.”

Late this year Zoran will begin sampling a new single- chip Blu-ray processor, and early in 2009 will introduce the Coach 12 for digital single lens reflex (DSLR) cameras. The Blu-ray processor will combine encoding and decoding functions that could drive hardware prices to about $100 by late 2009 (CED July 30 p1). The processor marks a break from an earlier Zoran strategy based on a two-chip solution. It demonstrated its VaddisHD high-definition multimedia platform at CES in January with a dual 450-MHz processor.

“There are some inherent advantages we found when we did DVD where you can closely couple front end to the back end,” Pederson said. “We went from an all-analog front-end to DSP signal recovery style because you could share resources such as memory.”

The Coach 12 will be Zoran’s first to target DSLR cameras, competing in a market now dominated by CMOS image sensors. The chip will be designed for 12- to 14-megapixel cameras. The Coach 12 moves to a 80-nanometer manufacturing process from the 90-nanometer used with the Coach 10 chip, Pederson said. It will boast a 10 percent increase in clock speed to about 300 MHz, he said. A Coach 10 is deployed in a Nikon 14-megapixel camera.

The new IC will be the first to benefit as Zoran combines chip architectures for digital cameras and cellphones, said Pederson. Zoran’s Approach ICs are used in cellphones. The Coach 12 will gain from Approach’s low power use, while the Approach benefits from “consistency in image processing,” said Pederson. An Approach 7 IC is expected to sample by year-end with improved 3D graphics and video architecture that could allow for capturing HD images, Pederson said. The Approach 5 IC, featured in LG Electronics’ Viewty cellphone, can handle eight to 10 megapixels.

Zoran has tabled plans for its Switched Network content service unveiled at CES (CED Jan 11 p3), Pederson said. Switched Network is designed as a multiplatform solution for moving content among varied devices. Zoran planned to seek investors and spin off Switched Network as a separate company, with hopes of licensing Switched Network as a branded or OEM service. The technology works over IPv4, but Zoran is seeking to adapt it for IPv6 and WiMAX, company officials said.

“The retail IP market is something that OEMs want to do, but it’s just a matter of getting the right partners together,” Pederson said. “We're in a better position now than we were at CES from a product platform standpoint to deal with the media that’s currently out there without begging people to re-encode. Retail IP is on the radar. We've just pulled it back from the front line” for now. - Mark Seavy