Graphics chipmaker ATI expanded its reach into
new markets this week with the help of a product launch and an
acquisition.
The Markham, Ontario-based firm said it has finalized its purchase of
CuTe Solutions out of Hyderabad, India. CuTe makes audio and digital
media products that will help broaden ATI’s offerings for consumer
electronics devices and PCs, ATI executives said.
“By acquiring CuTe Technologies and establishing an ATI office in
India, ATI has expanded its multimedia expertise to audio processing
thereby strengthening its presence in the mobile phone market,” the
company said in a statement.
CuTe’s audio products support more than thirteen codecs
and low-memory processor.
CuTe’s offices in Hyderabad will also form the basis of ATI’s new
research and development center in India. The company said ATI Technologies India Private Limited will retain CuTe’s staff and plans to hire additional engineers.
In a separate but related announcement, ATI
introduced two new media processors with improved multimedia capabilities, the IMAGEON 2282 and IMAGEON 2182.
They feature CD-quality audio with
high-quality stereo recording and playback in industry standard formats,
including AMR
digital video recorder/player and a 3 mega-pixel digital still camera.
In addition, the IMAGEON 2282 provides video streaming and video
conferencing functionality with picture-in-picture support.
The higher performance IMAGEON 2282 is targeted at the high mid-tier
mobile phone segment while the IMAGEON 2182 targets the mainstream, low
mid-tier segment. Phones powered by the new IMAGEON processors are expected to ship
later this year from handset manufacturers, ATI said.
ATI’s market moves may be coming at the right time. JupiterResearch’s
annual wireless forecast, published this week, found that 2003 ringtone revenues
of $91 million more than doubled to $217 million in 2004. They’re predicted to reach $724 million in 2009.
Likewise, mobile games revenues, which are graphics- and video-
intensive, were $24 million in 2003, tripled to $72 million in 2004 and
should reach $430 million in 2009.
Despite this rapid growth, JupiterResearch’s report found ringtones
and games accounted for just 10 percent of U.S. carriers’ non-access
data revenue in 2004, partly because ring one and game-capable handsets
have not yet achieved very high market penetration. Overall, mobile data
services revenue, including ringtones, games and messaging services,
still represents only single-digit percentages of carriers’ consumer
revenue. But given the recent and projected growth, U.S. carriers
have reason to be optimistic.
“During the next five years, the mix of data services will evolve,
but messaging will still account for 65 percent of non-voice, non-data
access revenues,” Julie Ask, research director at JupiterResearch, said
in a statement. “Carriers’ premium content revenue mix will continue to
diversify with the growing popularity of games, wallpaper, content and
productivity applications. Ringtones will remain the largest revenue
stream for carriers in the premium content category but will not
dominate as they have in previous years.”
ATI is obviously counting on its IMAGEON processors and its
acquisition of CuTe’s research and development centre in India to help
capture that growing market.
“Just imagine the freedom of taking the functionality of your
camcorder, MP3 player and digital still camera with you in a package
that only weighs a few ounces,” Ravi Gananathan, a senior product
marketing manager at ATI, said in the company press release. “The new IMAGEON processors combine advanced audio and video processing capabilities to turn mobile phones into
mobile entertainment centers.”
