In a market where every newly announced component seems to tout "next generation" status, Philips Semiconductor (now NXP) has taken a stab at a current-generation TV problem - low-cost and user-friendly implementation of both analog and HD reception in an LCD-TV. Why would a company that describes itself as The Next Experience introduce such an incremental and temporary solution? After all, analog broadcasts will cease in a few short years. However, there are several factors at play here, and it seems that it may be a good move for the newly private company.

John DiLoreto
Analyst and Editor
of Insight Media

Philips Electronics, which recently agreed to sell 80% of its semiconductor division to a group of private equity firms for $4.35B, has a strategy of supplying chips to the competitive consumer electronics market. Although, Philips Semi did well supplying chips for its internally produced TVs, it has struggled to become a top supplier in the global TV chip market.

Despite the FCC mandate to put ATSC (digital) tuners in all 35-inch and smaller sets as of March 2007, for the next several years, most viewers will be watching NTSC (analog) cable, satellite or antenna feeds a good portion of the time. The demand definitely exists for a dual solution, but current solutions require users to manually switch between inputs in order to change from analog to digital broadcasts.

"Manufacturers have attached a digital bolt on to an analog television set for many of the solutions in the market today," according to Vincent Vermeer, product marketing manager for LCD-TV solutions at NXP. "You have two user interfaces on the same television, one for digital and one for analog."

The new chip, to be available in January 2007, allows LCD-TVs to switch automatically between analog and digital signals creating a seamless environment. Vermeer thinks the move toward a hybrid chip would give consumers a better HD experience. We heartily agree. One of the problems in the adoption of HDTV has been difficulty users have in acquiring and displaying HD programming in a typical home environment. It’s one step closer to single button tuning for antenna or CableCARD RF inputs. Set-top box users will still have to switch input devices on their TVs.

NXP will build the chip into reference designs that manufacturers can use to speed new HD LCD-TVs to retail stores worldwide - just in time for the mandate. Two reference designs will separately cover DVB/PAL and NTSC environments. Chip production is said subcontracted to undisclosed manufacturers with facilities in Taiwan.

NXP obviously hopes the chip will be an early win for the newly private company, boosting sales in the global LCD-TV market, where unit shipments are estimated reach 60M in 2007, up from 20M in 2005.

Philips said the new name for the stand-alone company NXP, or Next Experience, suggests a focus on chips to improve performance of next-generation consumer devices. It is also bringing an upgraded experience to the current generation of mixed analog/digital viewing environments.

We think it’s just what the market needs - even if it’s a temporary solution until we’re all-digital. -JD