[opendtv] Re: DTV licensing; Was: Mobile DTV test
- From: Eory Frank-p22212 <Frank.Eory@xxxxxxxxxxxx>
- To: "'Allen Le Roy Limberg'" <allimberg@xxxxxxxxxxxx>,opendtv@xxxxxxxxxxxxx
- Date: Sun, 11 Apr 2004 13:56:17 -0700
Comments inline.
> -----Original Message-----
> From: Allen Le Roy Limberg [mailto:allimberg@xxxxxxxxxxxx]
> Sent: Sunday, April 11, 2004 11:08 AM
> To: opendtv@xxxxxxxxxxxxx
> Cc: Frank Eory
> Subject: Re: DTV licensing; Was: Mobile DTV test
>
>
> The IP is more likely to be licensed at to the set
> manufacturer, rather than at IC foundry. The unlicensed sets
> fill up warehouses faster than ICs.
>
> Also, it is easier to justify $25 royalties on something that
> costs hundreds of dollars, rather than a few dollars.
I say again, in a few years the retail price delta between ATSC-capable
integrated sets and today's NTSC sets will be maybe $50, not "hundreds." Then
the $25 royalty will be obscene.
>
> But IP prices being higher than actual production costs is
> not so strange. Look at PC software.
Interesting analogy. PC software cost is split between IP royalties, for code
that is licensed, and engineering time -- the company's internal investment and
its own IP. Add a little extra when sold at retail, where the cost of the
plastic box and a penny or two for the CD is factored in. So in the future,
silicon is free and it's only the IP and engineering we'll pay for? That's a
scary thought, when mask plates are approaching $1M -- nevermind engineering
cost to actually design something.
-- Frank
> ----- Original Message -----
> From: "Eory Frank-p22212" <Frank.Eory@xxxxxxxxxxxx>
> To: <opendtv@xxxxxxxxxxxxx>
> Sent: Saturday, April 10, 2004 5:07 PM
> Subject: [opendtv] Re: Mobile DTV test
>
>
> > Oops. Sent the last one without typing my reply.
> >
> > Yes, IP licensing costs are becoming an increasing
> percentage of chip
> costs with each new level of integration. One solution is to
> make the license a percentage of the ASP (average selling
> price), rather than a fixed dollar amount -- if the IP owners
> can agree to that. I forget the exact figure, but at one time
> the MPEG2 royalty for DVD chips was a fixed dollar amount
> which would be ludicrous today, considering you can buy an
> DVD-player-on-a-chip -- everything but the drive mechanism
> itself, for something in the neighborhood of $10-$15 --
> probably less, depending on who you are and what your volumes
> are. Suppse the IP royalty was $3/unit. 25-30% of the ASP to
> the IP owners of "the standard," while the chipmaker who
> invests millions to produce and support the chip (and adds
> value with his own IP) gets margins in the single digit
> percentages? That business model doesn't fly. That lead to
> things like we see in China, where they are developing thier
> own standards and their own I!
> > P, for the simple reason that the cost of licensing the
> "standard" IP
> > is
> too prohibitive.
> >
> > Now fast forward a few years into the future, when
> virtually every TV
> > set
> sold in the U.S. contains an ATSC receiver/decoder, MPEG2
> video decoder, Dolby audio decoder, NTSC decoder, graphics
> engine, microprocessor, video scaling engine, etc. Now
> imagine that today's $200 TV sets will sell for $250 at
> retail (in equivalent 2004 dollars). The WILL sell for that
> small a premium, or they won't sell at all. Now back out the
> retail markup, the TV mfr markup and the chipmaker's markup.
> What do you think those chips will be selling for in 2007? My
> guess is around $10. How much of that $10 can possibly
> (without incurring a loss) be given to the large pool of IP
> owners? A few pennies to each of them?
> >
> > I remember reading once that Zenith/LGE was hoping to get
> $5/unit for
> > the
> 8-VSB patents. How much will that royalty really turn out to
> be when 8-VSB is a small fraction of the chip area on a $10 chip?
> >
> > Tom brings up a valid point -- if the licensing cost of a
> particular
> > IP
> block is too prohibitive, it will not be integrated. I would
> add the following corollary: whatever is not integrated will
> not be included in the product, except for those things that
> cannot be integrated for technical reasons (like maybe RF
> tuners). Regardless of mandates, etc., the end product will
> be made affordable. If there are one or two IP blocks that
> drive the cost through the roof, they will either find a
> niche market or they will disappear entirely.
> >
> > -- Frank
> > -----Original Message-----
> > From: Eory Frank-p22212
> > Sent: Saturday, April 10, 2004 1:34 PM
> > To: 'opendtv@xxxxxxxxxxxxx'
> > Subject: RE: [opendtv] Re: Mobile DTV test
> >
> >
> >
> >
> > [opendtv] Re: Mobile DTV test
> >
> > * From: Tom Barry <trbarry@xxxxxxxxxxx>
> >
> > * To: opendtv@xxxxxxxxxxxxx
> >
> > * Date: Sat, 10 Apr 2004 07:24:43 -0400
> >
> > Eory Frank-p22212 wrote:
> >
> > > I wonder if there will be a market for standalone demod/FEC chips
> >
> > in 2005? There are guys out there who already have
> DTV-on-a-chip today
> >
> > -- demod/FEC, MPEG2 video, NTSC video & audio, Dolby audio,
> graphics,
> >
> > microprocessor, etc. I don't know what they cost, but clearly the
> >
> > value of each IP block is dropping fast as the integration level
> >
> > increases.
> >
> >
> >
> > Interesting point. But the incremental cost to add something to a
> >
> > chip is also determined by the IP licensing cost. If that is
> >
> > significant then it is less likely a function will be
> integrated along
> >
> > with big collections of possibly useful stuff. I'm not
> sure how that
> >
> > stacks up here.
> >
> >
> >
> > - Tom
> >
> >
> >
> >
> >
> >
> >
> >
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