Sony Eyes Sensors in Wearable Computers to Gesture TVs
By Mariko Yasu & Grace Huang - Sep 3, 2013 5:36 PM PT
Sony Corp. is considering applying its image sensors to
wearable computers and hand-gesture TVs for growth as it expects smartphone
revenue to peak around 2015.
The company plans to seek growth in developing the chips,
already used in smartphones and digital cameras, for products such as
self-driving cars and medical equipment, Yasuhiro Ueda, senior vice president
for Sony’s image sensor unit, said in an interview.
Sony has garnered almost a third of the $7.6 billion
market for the low-power chips, known as complementary metal-oxide
semiconductors, that quickly capture crisp snapshots in high-end smartphones, a
market that is nearing saturation. The company sells CMOS to others, with
versions in Apple Inc. (AAPL)’s iPhones 5 and 4S and Samsung Electronics’s
flagship Galaxy S4, according to SMBC Nikko Securities.
“We have a high sense of crisis after seeing the high-end
smartphone market start to saturate this year,” Ueda said yesterday at Sony’s
technology center in Atsugi, near Tokyo. “Our plan is to draw a growth strategy
in an area where we see shipment potential of 10 billion units a year.”
Sony’s Exmor image sensor works as an eye for electronic
products, capturing light to convert into electronic signals for processing.
The latest chip uses less power and faster processing to catch vivid images
under low light.
Chief Executive Officer Kazuo Hirai has said the company
plans to leverage the technology to expand in medical equipment business. The
chips can be offered for endoscopes used to look inside body cavities and
medical testing devices, Ueda said.
Surging Shipments
Worldwide CMOS shipments rose 25 percent to 2.5 billion
units last year and may show a similar increase this year, according to an
estimate by Techno Systems Research Co. That may slow down to about 11 percent
in 2015, according to the Tokyo-based researcher.
Sony’s revenue from the chips probably rose to $2.45
billion in 2012 from $1.89 billion a year earlier, garnering 32 percent of the
global market’s sales, according to estimates made by Techno Systems.
Omnivision Technologies Inc. (OVTI) is ranked second with 14.4 percent,
followed by Samsung at 12.9 percent.
‘Robust Orders’
“Sony’s CMOS business, which has seen robust orders from
smartphone makers may be reaching a turning point as demand shifts toward
middle- to low-end handsets,” said Ryosuke Katsura, an analyst at UBS AG in
Tokyo. “There will be a higher risk going forward for the business” unless it
finds a new growth driver, the analyst said.
Sony fell 0.8 percent to 2,023 yen as of 9:23 a.m. in
Tokyo. The stock has more than doubled this year, compared with a 33 percent
gain in the Topix index.
Global smartphone revenue will rise 22 percent in 2013,
or nearly half the pace of an expected 41 percent gain in shipments, amid
falling prices, according to UBS.
Sony’s device division generated operating profit of 10.9
billion yen ($110 million) in the June quarter with most of the earnings
generated by sales of the chips, Deutsche Bank AG estimates. The division was
the biggest source of profit after its insurance business.
Ueda declined to elaborate on revenue and profit from its
image sensors.
Apple, Samsung
Sony started developing image sensors in 1970 as it tried
to compete with Eastman Kodak Co. in photographic devices. The Tokyo-based
company’s first such chip was used in a camcorder before the growth driver
shifted to digital still cameras and smartphones, Ueda said.
Future growth may come from devices such as Google Inc.’s
Glass, a set of Web-enabled eyewear, according to Ueda. Apple and Samsung’s
planned watch devices may lift sales of wearable gadgets to 70 million units in
2017 from 15 million this year, according to Juniper Research.
“Image sensors will be crucial device for wearable
computers,” Ueda said. Sony is “very keen to expand our business in this area.”
Samsung may unveil a wristwatch-like device named the
Galaxy Gear that can make phone calls and surf the Web and handle e-mails,
people familiar with the matter said last month. Cupertino, California-based
Apple has a team of designers working on a watch-like device, two people
familiar with the matter said in February.
Autonomous Vehicles
Nissan Motor Co. plans to deliver fully autonomous
vehicles to the market by 2020, Andy Palmer, the automaker’s executive vice
president, said last month. Technology underpinning autonomous cars, including
adaptive cruise control and electronic steering is already available, and added
sensors and road-monitoring capabilities are being refined, Palmer said.
Self-driving cars are currently legal in three U.S.
states and may offer a revenue opportunity of more than $200 billion, according
to a June report by Piper Jaffray & Co.
“If you want to make self-driving cars, you need several
sensors in the car,” Ueda said. “Hand-gesture TV sets may see a booming demand,
while house-clean robots can probably do a better job if image sensor was
added.”
To contact the reporters on this story: Mariko Yasu in
Tokyo at myasu@bloomberg.net; Grace Huang in Tokyo at xhuang66@bloomberg.net
To contact the editor responsible for this story: Michael
Tighe at mtighe4@bloomberg.net
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