National Semiconductor Introduces New Internet Appliance Chips

National Semiconductor Introduces New Internet Appliance Chips – Brief Article

After years of raised eyebrows on the part of outsiders, National Semiconductor Corp.’s vision of the Internet appliance is finally turning into a significant business venture. The company now has an entire division dedicated to the concept and expects the potential marker to reach into the hundreds of millions of units within a few years.

National is already shipping a variety of products into systems that could be defined as information appliances, even as these very chips help refine that definition for an emerging market.

“The information appliance is no longer a market that is being debated,” said Mike Polacek, vice president of National’s information appliance division. “It’s true that these systems are not being shipped in the hundreds of millions now, but this market is very important to us.”

One of the early backers of the concept was CEO Brian Halla, who took the reins of the venerable Santa Clara, CA, chip maker in 1996. Almost from day one, Halla was pushing his design teams to put together all the components that would be necessary to access the Internet from a low-cost box. While the rest of the high-tech industry kept its eyes glued to the PC as the main networking mechanism, Halla saw a need for an inexpensive tool to bring the Internet to the masses and to embed that functionality into common home and business applications.

“Almost from his first day on the job, his vision was that there would be a need for an alternative way to access the Internet,” said Polacek. “It was ahead of its time.”

Indeed, only a few years ago, the conventional wisdom in the industry said that it couldn’t be done, that the components for an Internet appliance would be too expensive and that only a PC could handle the tasks involved anyhow. Today, PCs sell for a few hundred dollars, a cell phone can browse the Net and the Internet appliance is a market that everybody wants in on.

For its part, National is rolling out a trio of chips, each aimed at slightly different versions of the market it helped to create. All of them are part of its Geode family, which is already being used in set-top boxes.

The Geode SC1200 processor is a new part for that same set-top box space. The SC2200 processor, meanwhile, targets what the company is calling thin-client desktop systems, which essentially look and act like stripped-down PCs, but can’t support much more than an Internet browser and e-mail application. The SC3200 device is aimed at wireless systems, including the emerging concept of a Web pad, which looks like a clipboard with a screen and could bc used to download e-mail from the sofa or hauled into the kitchen to access a recipe Web site or order groceries from an Internet based grocery store.

These segments indicate the still-undefined nature of the Internet appliance marker. Some concepts are emerging as likely hot products in the next few years, but Poloacek conceded that other new ideas have yet to be defined and still other possible applications may fall flat. He said that National fully expects some of its chip designs to take aim at markets that never take off. This shotgun approach seems to be working well so far, however, as National chips find their way into growth markets.

The company claims some 80 percent of the market share for processors in the thin-client segment, for example. But one market where Polacek said the company is not making a strong play is the third-generation cellular phone, a product that merges the phone and PDA functions and adds wireless Internet access.

Polacek defined an Internet appliance as any non-PC system that can access the Internet, which this new breed of phones clearly does. However, the demands of those systems are quite different from those of a set-top box or a thin client. The Internet-capable cell phone segment is the top information appliance market, said Adrienne Downey, research analyst for Semico Research Corp. Thin-client servers hold the number two spot.

“We do think there is the potential for some type of countertop systems to take off in the future,” Downey said. The thin-client sector could swell from about a million systems shipped this year to some 12 million in 2004, by her reckoning.

The Internet phone segment, with 87 million units projected to ship this year, will rise to just under a billion units in 2004. Set-top boxes will expand from 15.6 million units this year to 77.6 million in four years. Overall, Semico Research believes the entire Internet appliance market could see a cumulative growth rate of 84 percent between 1 999 and 2004.

One reason National sees its future in non-cell phone applications is the company’s synergistic product line. Along with embedded-processor technology, National’s historic strength has been analog products. Polacek said that for every dollar a customer spends on a processor, he is also buying an additional 50 cents’ worth of analog parts to go with it. “We are selling a lot of different products into this market,” he said.

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