Bloomberg News

STMicro Polishes Indoor Navigation for $4.3 Billion Market

February 26, 2012

(Updates with share price in last paragraph.)

Feb. 21 (Bloomberg) -- STMicroelectronics NV will show improved indoor navigation tools and technology that can stop handsets taking blurred photos as it tries to keep a leadership in a market that may reach $4.3 billion in 2015.

Europe’s biggest chipmaker plans to demonstrate the world’s “most accurate” indoor measurement system for mobile-phone location at the Mobile World Congress in Barcelona next week, said Benedetto Vigna, the Geneva-based company’s general manager of MEMS and sensor products. It will also use the trade fair to unveil image-stabilization components.

MEMS, or microelectromechanical systems, are becoming ubiquitous in smartphones and tablets such as Apple Inc.’s iPhones and iPads, providing motion-sensing for turning, tilting and tapping devices. STMicroelectronics’s indoor navigation system uses data from Wi-Fi access points, motion sensors and satellite-based positioning, and tackles the issue of “urban canyons” and indoor environments where signals from GPS satellites can’t be received, Vigna said.

“It will allow a new wave of location-based services,” Vigna said in a phone interview. “Your cell phone will be able to guide you to a Gucci store within a mall, or to your parking lot. You can get information and advertising targeted on your location” in places such as underground trains, airports and museums.

Apple Benefit

STMicroelectronics has reinforced its position as the world’s biggest supplier of consumer MEMS, and is benefiting from the success of iPhones and iPads, for which it is the sole source for accelerometers and gyroscopes, according to researcher IHS iSuppli. Apple accounted for half of the MEMS business of the company in 2011, IHS iSuppli said.

Global MEMS revenue for consumer and mobile applications will rise to $4.3 billion in 2015 from about $2.16 billion last year, IHS iSuppli predicted this month.

MEMS are becoming “the new mice for touch devices,” Vigna said. “Now there are two trends driving demand: optical image stabilization and location-based services. Indoor navigation will be a killer app.”

STMicroelectronics Chief Executive Officer Carlo Bozotti has said that 2011 was “a year of record revenue” for MEMS, which includes gyroscopes and accelerometers for motion-sensing in smartphones and tablets.

Camera Features

As handsets’ built-in cameras become capable of taking higher-definition pictures with more pixels, the greater exposure time required for bright and sharp images may increase the effect of users’ movements, resulting in blurred pictures. Optical image stabilization, to detect handshake and stabilize the optical components of cameras, will become a standard feature in such devices, Vigna said.

“The market for OIS is big as it will be a must-have for next-generation cameras,” he said. “More pixels mean greater stabilization is required.”

At Barcelona, the company will demonstrate OIS for mobile devices based on so-called shape memory alloy smart material.

This year, STMicroelectronics introduced the first dual- core gyroscope, which can handle both user-motion recognition and camera-image stabilization. This allows device makers to use a single gyroscope for the two different functions, reducing the size, complexity and cost in mobile phones and tablets.

“We see a lot of interest for using motion sensors for indoor navigation,” said Jeremie Bouchaud, a Munich-based senior MEMS and sensors analyst at IHS iSuppli. “The future of navigation is with the mobile handset. Content for indoor navigation is rapidly growing.”

Lighter Devices

MEMS is used in motion-activated user interfaces in mobile and consumer devices including Nintendo Co.’s Wii gaming console. The latest sensors and modules are smaller and use less power, enabling new features to be added to thinner and lighter smartphones and tablets without impairing battery life.

“Miniaturization is a powerful driver in mobile electronics and indeed in the semiconductor industry as a whole,” said Adib Ghubril, a Toronto-based analyst at researcher Gartner Inc. “Devices have to meet form factors that are getting tighter and tighter; they have to consume less and less power, run cooler and cooler and do more.”

STMicroelectronics shares fell 0.9 percent to 5.64 euros at 9:56 a.m. in Paris, giving the company a market value of 5.13 billion euros ($6.8 billion). The stock has climbed 23 percent this year after declining 42 percent in 2011.

--Editors: Robert Valpuesta, Kenneth Wong

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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