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Technology Institute Mobile Technologies Index : Steady growth for new capabilities

Introduced in 2000, phones—combined . We introduce this topic below, By Raman Chitkara, Global with —continue to redefine what but anticipate a deeper analysis in a future Technology Industry Leader it means to communicate. The early camera article. The main focus of this article is the phones produced low-quality , but now, image sensor, which is a component of the thanks to Moore’s Law, they are competing with PwC Mobile Technology Index. The Index point-and-shoot and camcorders. How comprises seven technologies that enable much more can camera phones do? mobile innovation.

Quite a bit more, it turns out. The innovation PwC forecasts a compound annual growth curve will continue to produce camera phones rate (CAGR) of 20 percent for image that capture higher quality still images and as measured in megapixels per dollar (MP/$) videos with better sound. These improvements through 2015. [See Figure 1] Since 2007, image will result from image sensor improvements and sensors have followed Moore’s Law, doubling increasingly from technology around the sensor, megapixel density per dollar every two years for especially the use of microelectronic mechanical a CAGR of 37 percent. The MP/$ will continue systems (MEMS), as discussed below. to grow, but at a slower rate. [See Figure 2] This, however, will not reduce or depreciate Over the longer term, compelling new use cases the image sensor’s importance to mobile that rely on tighter integration between the innovation. To understand the future of image camera module and the operating system will capture, it is useful to review the evolution of lead to new capabilities more aptly classified as in .

Figure 1: Image sensor, compound annual growth rate (CAGR)

MP/$ 250%

20% CAGR (2011–2015) 200%

150%

100% 37% CAGR (2007–2011)

50% Percent of 2011 Index base

0% 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: IHS iSuppli Mobile and Wireless Communications Service Figure 2: Price performance compared to Moore’s Law

7.00 6.35 5.70 5.05 4.40 3.75 3.10

Megapixel per $ 2.45 1.80 1.15 0.50 2007 2008 2009 2010 2011 2012 2013 2014 2015

CCD CMOS Moore’s law

Source: IHS iSuppli Mobile and Wireless Communications Service

The image sensor is part of a camera phones served a practical purpose and module for the mobile device that also became a standard feature in 80 percent includes the and MEMS for various of all handsets manufactured—increasing (and a growing number of) functions, to 90 percent within our forecast period. plus interfaces to the application processor, memory and storage. CCD-based handsets have been slowly phasing out since the introduction The first camera modules for cell phones of complementary metal-oxide used charge-coupled device (CCD) (CMOS) sensors in 2006. sensors. As recently as 2006, 4MP CMOS sensors consume less power than CCD-based modules cost US$22, which CCD sensors. They also enable lower cost, included US$8 for the image sensor. smaller form factors and much higher Camera module suppliers charged as . much as US$15 more for ‘integration’ of this subsystem into the handset. Aside Consumers now expect to capture higher- from being costly, the early camera quality photos and to more easily share modules came in only one size (large) them in email, on social networks and and used significant amounts of power, as prints. They can look forward to the consuming the battery faster. quality of images and video to continue to improve year after year. By 2015, high- The lower quality images from early end smartphones, which already have camera phones were relegated to 8MP image sensors, will enter the 14MP viewing on the phone screen because to 20MP range. the resolution was not high enough for printing or displaying on a computer Higher resolution image sensors equal to screen. As well, sharing photos on or approaching those of the point-and- 2G/2.5G broadband cellular networks shoot are only one part was much slower, and most camera of the formula for image improvement. phones didn’t yet support WiFi or Through software manipulation and Universal Serial Bus (USB) standards. various MEMS devices, smartphones will continue to deliver improvements in As a result, there were many hurdles to image stabilisation; auto focus; zoom; sharing, posting and permanently saving sensitivity; low-light performance; images. Despite these obstacles, camera reduction; reduced power use;

2 Mobile Technologies Index Image sensor: Steady growth for new capabilities integrated image processing hardware; Due to these continuing improvements in sound recording for video and lens mobile device imaging—still and video— improvement. Software will also become the market for point-and-shoot digital a differentiator in image collection, cameras is likely to contract. In 2011, the compression, picture editing, video average handset had 30 percent of the MP editing and searching. count of the average digital still camera. By 2015, handsets will have 60 percent MEMs are crucial. They are made with of the MPs in digital still cameras on standard semiconductor manufacturing average, with some having more than 80 processes and benefit from the percent. [See Figure 3] predictable price-performance curve of those processes. Robert A. Chinn Software and MEMs have already Semiconductor Advisory Principal enabled new or improved functions in PricewaterhouseCoopers LLP some smartphones: autofocus1 (MEMs), panoramas from multiple photos (software) and high-definition image capture (MEMs and software). “In the near future, smartphones will have more than enough raw resolution Improvements in image sensors, and capabilities to meet most users’ needs, MEMS and software will enable future- and those users will become less willing to generation camera phones to offer 3D pay a premium for additional megapixels, imaging. 3D will not only provide a richer, unless new capabilities, like machine more realistic photographic image, but vision, are added,” says Robert A. Chinn, the 3D depth map will be crucial to the a principal in the Semiconductor Advisory sensing required for hands-free gesture Practice at PricewaterhouseCoopers LLP. control of the device and improved facial recognition.

1 http://www.doc.com/Actuator/Pages/Actuator.aspx

Figure 3: Megapixels in handsets vs. digital still cameras (DSC)

20 Avg handset MP @ 60% of DSC

16

12

Megapixel 8

4

Avg handset MP @ 30% of DSC 0 2010 2011 2012 2013 2014 2015

Avg handset Leading-edge handset Digital still cameras

Source: IHS iSuppli Mobile and Wireless Communications Service

3 Mobile Technologies Index Image sensor: Steady growth for new capabilities As noted earlier, improved image sensors recognition and mobile industrial and and camera modules will factor into medical applications. Another recently machine vision capabilities that are announced non-photo use of the image just now appearing on the horizon. sensor is an infrared (IR) sensor that Machine vision broadly comprises the takes the body’s temperature. The IR translation of light (visible to the human sensor, which is a MEMs device, is eye or not) into digital , and designed to sit next to the image sensor the analysis of that digital data for the in the and use its viewfinder purposes of identifying and extracting to target the correct spot of the object or information about objects of interest. subject to take a temperature. We will To date, machine vision has mainly explore machine vision use cases like this been associated with manufacturing in depth in future articles. for quality control and other industrial uses. In smartphones, machine vision Because the camera modules will move will involve the use of the image sensor from commodity parts with limited to capture information that is analysed functionality to multi-purpose modules in the device or in the cloud (or both), capable of wide ranging uses, the and put to some personal purpose. For modules will require deeper integration example, there already is a smartphone with the operating system. PwC app that uses the image sensor to help anticipates consolidation in the vendor it detect and measure rays— space within our forecast period as radiation—in the immediate area.2 fewer suppliers will be likely to meet the higher threshold for functionality and Machine vision capabilities in mobile OEMs will look to establish long-term devices will use the image sensor in relationships with individual suppliers. different ways than photo capture does. In 2012, the supply base included 40 Some machine vision applications will image sensor suppliers and 40 camera use less information than required module suppliers. for photos; for example, make determinations based on examining Whatever new use cases image sensors the contours of objects in an image but end up supporting, camera modules will without needing a full rendering clearly evolve within our forecast period of it. to support everything needed for higher quality video and still , Machine vision use cases supported by and use cases associated with recording all the anticipated advances in image scenes for later viewing or playback. sensors, MEMs and software could include hands-free gesture control, facial

2 http://www.vision-systems.com/articles/2012/05/ smartphones-measure-radioactivity.html

4 Mobile Technologies Index Image sensor: Steady growth for new capabilities Let’s talk If you have any questions about the Mobile Innovations Forecast, or would like to discuss any of these topics further, please reach out to us.

Raman Chitkara Robert A. Chinn Global Technology Industry Leader Semiconductor Advisory Principal PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP [email protected] [email protected]

About PwC’s Technology Institute The Technology Institute is PwC’s global research network that studies the business of technology and the technology of business with the purpose of creating thought leadership that offers both fact-based analysis and experience-based perspectives. Technology Institute insights and viewpoints originate from active collaboration between our professionals across the globe and their first-hand experiences working in and with the technology industry. For more information please contact Raman Chitkara, Global Technology Industry Leader. About PwC PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at http://www.pwc.com/.

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