Next Generation Haptics: Market Analysis and Forecasts

Next Generation Haptics: Market Analysis and Forecasts

SECTOR REPORT Next Generation Haptics: Market Analysis and Forecasts February 2011 Peter Crocker Lead Analyst Matt Lewis Research Director ARCchart 78 York Street London W1H 1DP United Kingdom Tel: +44 33 00 88 1355 Fax: +44 33 00 88 1350 service@arcchart.com

ARCchart is an independent research and consulting firm focusing on all aspects of the wireless communications sector. Based in London, ARCchart s depth and breadth of analysis provides a global perspective on wireless technology and industry developments. Combining original thinking with exceptional knowledge and experience, ARCchart assists clients in making sound commercial decisions about technologies, market strategies and competitive positions. ARCchart s strategic advice covers all aspects of the wireless value-chain - ranging from semiconductors and WLANs to network operators, handsets and mobile applications. This report draws upon research and analysis conducted by all the ARCchart information groups. Use of this report by any third party for whatever purpose should not, and does not, absolve such third party from using due diligence in verifying the report s contents. Any use which a third party makes of this document, or any reliance on it, or decisions to be made based on it, are the responsibility of such third party. ARCchart, its affiliates and representatives accept no duty of care or liability of any kind whatsoever to any such third party, and no responsibility for damages, if any, suffered by any third party as a result of decisions made, or not made, or actions taken, or not taken, based on this document. ARCchart does not make investment recommendations, in this report or otherwise, and nothing in this report should be interpreted as an opinion by ARCchart either on market forecasts or on the prospects of specific companies.

Executive Summary Haptics is the science of applying touch (tactile) sensations to the interaction with appliances, and the unique nature of mobile devices, and their increasing sophistication, makes the market ideally suited to benefit from this bourgeoning technology. The importance of the user interface as a differentiating feature amongst mobile devices has never been greater and haptics provides OEMs with a compelling UI augmentation. In the coming years, simple haptics on handsets will be replaced by advanced, high definition (HD) haptics capable of delivering sophisticated and crisp tactile sensations. Haptics involves the complex manipulation of an actuation element using defined waveforms to produce a range of effects which may be perceived uniquely by the human finger. There are a variety of contexts in which haptics can be leveraged on a mobile handset: it can be used to provide tactile feedback on a touchscreen when interacting with various UI elements, such as a virtual keyboard or scrolling list, notifying the user that the input they intended has been registered; or haptics can be used to provide a tactile dimension to gameplay or watching a video. In this study, ARCchart investigates the growing use of haptics on mobile phones, examining solutions in the market today and the host of next generation technologies which will compete for market share over the coming years. The components which constitute a haptics system are described and the ecosystem of technology suppliers, mobile platforms and handset manufacturers are examined. Insight into the various factors driving haptics take-up is provided and estimates for the size of the mobile phone haptics market is presented, along with a five year forecast for industry growth. While the level of haptics support amongst mobile devices is currently low, ARCchart forecasts that the technology will be supported by 36% of handsets shipped by 2015. The lack of tactile feedback when using an on-screen keyboard is seen as a significant disadvantage compared to using a physical keyboard, but haptics has been shown to increase the speed and accuracy of using an on-screen interface. Consequently, the tremendous growth of touchscreen devices, which boast virtual controls and input interfaces, is a key driver for incorporating haptics into the mobile phone. An embedded haptics solution essentially consists of two components: an actuation element and specialised software to drive the element. This software can either be run by the device s application processor, or by a dedicated controller IC for more optimised performance and effects. In terms of component sales, the controller IC represents the largest haptics revenue opportunity, with the market expected to total $465 million in 2015, according ARCchart forecasts. i

Today, handsets use the inertia-based vibration motor as the actuation element, but HD haptics will leverage advanced components such as piezo electric materials, electroactive polymers or capacitive electrosensory techniques. Architectures using these various technologies have been developed and patented by both specialist technology firms and by OEMs, each with benefits and drawbacks. So far, Immersion Technology has led this development of haptics intellectual property. However, companies such as Artificial Muscle, Pacinian and Senseg have been pioneering a variety of next generation actuation methods and Maxim recently introduced the first piezo haptics controller. OEMs like Nokia and Apple are currently conducting evaluations and we expect the first HD solutions to appear in commercial handsets in 2011, however, mass adoption will take a number of years as technical barriers are overcome haptics drain on battery power and implementation issues present significant challenges that need to be addressed. A better understating of materials used in next generation haptic actuators is also needed to bring HD haptics to the mass market. ii

Table of Contents A. INTRODUCTION... 1 Haptics Implementations...2 Actuators...2 A.2 Haptics More than Simply Vibrations...3 Hardware and Software Components Required for Haptics...3 B. ACTUATION ELEMENTS AND HAPTICS SYSTEMS... 4 B.1 Architecture of a Haptics System...4 Application Processor versus Dedicated IC...4 B.2 Actuation Systems...5 Inertial Actuation...5 Piezoelectric Actuation...6 Electroactive Polymer Artificial Muscle Actuation...7 Surface Actuation...8 Lateral Actuation...9 Bending Wave Actuation...9 Capacitive Electrosensory Interface...9 B.3 Technology Differentiators... 10 Scalability... 10 Size & Ease of Integration... 10 Reliability... 11 Power Efficiency... 11 Response Times... 11 Variety of Haptics Effects... 11 B.4 OEM Haptic Technologies... 12 Nokia... 12 Apple... 12 iii

Research in Motion... 14 Motorola... 14 HTC... 14 C. MARKET DRIVERS AND BARRIERS... 15 C.1 Market Drivers... 15 Growth of Touchscreens and Virtual Interfaces... 15 Richer Media Experiences... 16 Maturing Ecosystem... 17 Haptics in Larger Mobile Devices... 17 C.2 Market Barriers... 18 Cost... 18 Handset Design Challenges... 19 Power Consumption... 19 Limitations of piezo systems... 19 OEMs Must Address Integration Challenges... 19 Chicken and Egg... 19 Haptics is a Hard Sell... 20 Competition within the Ecosystem... 20 D. MARKET OUTLOOK... 21 D.1 Dominant Technologies... 21 The Technology Window of Opportunity... 22 Move towards Touchscreen Integration... 22 D.2 Haptics Branding Opportunity... 22 D.3 The OEMs Best-Positioned to Dominate... 23 Apple... 23 E. THE HAPTICS VALUE CHAIN... 24 Technology Suppliers... 24 Actuator Vendors... 25 Controller IC Vendors... 25 Touchscreen Manufacturers... 25 E.2 Vendor Profiles... 27 Artificial Muscle... 27 Immersion... 27 iv

Business Model Challenges... 27 Maxim... 28 National Semiconductor... 28 Pacinian... 28 Senseg... 29 F. MARKET SIZE AND FORECAST... 30 F.1 Methodology... 31 BOM Estimates... 31 F.2 Handset Market... 31 Smartphones... 32 The Role of Touchscreen Mobile Phones... 33 F.1 Haptics Enabled Handsets... 34 Haptics Software Market Value... 35 Total Haptics Market Value... 36 F.2 HD Haptics... 36 F.3 Haptics ICs... 38 v

List of Figures Figure 1 - Haptic response on a virtual touchscreen keyboard... 1 Figure 2 Labyrinth mobile game benefiting from haptic feedback... 2 Figure 3 - Anatomy of a touchscreen-based haptics system... 4 Figure 4 Summary of haptic techniques in use and under development... 5 Figure 5 - Linear resonant and eccentric rotating mass actuators... 5 Figure 6 Disk-shaped piezo actuator... 6 Figure 7 Beam-shaped piezo actuator... 6 Figure 8 Example of an electro-active polymer actuator... 7 Figure 9 EAPM touchscreen implementation... 7 Figure 10 - Surface Actuation... 8 Figure 11 Lateral actuator touchscreen mounting... 9 Figure 12 Haptic technologies summarised and compared... 10 Figure 13 Nokia s Haptikos haptics system... 12 Figure 14 Apple s recent haptics patent applications... 12 Figure 15 - Apple s Multi-touch display screen with localised tactile feedback patent application... 13 Figure 16 - Apple s Multi-touch with multi-haptics patent application... 13 Figure 17 - Piezo actuators on the Blackberry Storm 2... 14 Figure 18 - Morphing keypad with haptics on the Motorola E8... 14 Figure 19 Global touchscreen handset shipments: 2010-2015... 15 Figure 20 Text input on a virtual touchscreen keyboard... 16 Figure 21 - Cost breakdown for various haptics systems... 18 vi

Figure 22 Haptic technologies summarised and compared... 21 Figure 23 Schematic of the haptics ecosystem... 24 Figure 24 Summary of leading actuator vendors by actuation technology... 25 Figure 25 - Summary of leading haptics control IC vendors... 25 Figure 26 Summary of the vendors supporting the various haptic techniques... 26 Figure 27 - Handset shipment forecast: 2010 to 2015... 31 Figure 28 - Handset shipment forecast by region: 2010 to 2015... 32 Figure 29 - Smartphone shipment forecast: 2010 to 2015... 33 Figure 30 - Touchscreen handset shipment forecast: 2010-2015... 33 Figure 31 Haptics enabled handset shipments by device type: 2010-2015... 34 Figure 32 Haptics enabled handset shipments by region: 2010-2015... 34 Figure 33 - Haptics software market value: 2010-2015... 35 Figure 34 - Haptics software market value: 2010-2015... 36 Figure 35 HD haptics actuator element shipments by device type: 2010-2015... 36 Figure 36 HD haptics actuator element shipments by region: 2010-2015... 37 Figure 37 HD haptics systems market value: 2010-2015... 38 Figure 38 Haptics controller IC shipments by device type: 2010-2015... 38 Figure 39 Haptics IC shipments by region: 2010-2015... 39 Figure 40 Haptics IC market value: 2010-2015... 39 vii

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