The WAVE Report
Issue #0200------------------1/4/02

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  0200.1 Hot Topics

    Photolog - Expands in New Areas

    Synthetik Software Announces and Ships Version 2.0 of

      Studio Artist

    CEATEC – Japan

0200.2 Story of the Issue

    Looking Back - Looking Forward

0200.3   3D

    ATI Ships FIRE GL 8800 Workstation Graphics Boards

0200.4 Semiconductor

    iSuppli Forecasts Tough Times for Standard Logic



    Matrix Semiconductor Introduces 3D Semiconductor



0200.5 Displays

    DisplaySearch Report Indicates Worldwide LCD Monitor

      Shipments Rise 45% Q/Q and 143% in Q3'01

0200.6 Financials

    Venture Capital Backed Companies Raise $35 Billion in



0200.1 Hot Topics

***Photolog - Expands in New Areas

In the last WAVE Report we announced the Photolog addition to the site. With this issue we have significantly added to the site. Included now are images from:


Nice, France

National Air and Space Museum

Taipei Flower and Jade Market

All of these sites can be accessed at:

As always we look forward to your feedback at:

***Synthetik Software Announces and Ships Version 2.0 of Studio Artist

(January 4)

Synthetik Software has announced the release of its software Studio Artist, a graphics synthesizer. Studio Artist version 2.0 comes optimized for classic Macintosh OS 8 and 9 as well as the OS X v10.1 and includes 8 hours of Quicktime video tutorials and instructional guides. Features include an expanded Paint Synthesizer as well as keyframable Layer capabilities and additional video processing and animation support.

Developed by Synthetik Software, Studio Artist is a commercial program for computer artists that incorporates research results from cognitive neuroscience investigations into the nature of visual perception in the brain. The program uses human visual modeling to construct an internal representation from a source image that is used to direct smart assisted painting and drawing. This includes both still images as well as auto-rotoscoped video sequences.

Studio Artist combines dynamic user-configurable painting and drawing tools along with an image processing and video effects suite. A hybrid imaging model allows individual paint strokes to have the visual richness of raster paint with the editability of vector paths. Dynamic expressive paint tools or custom art processes can be constructed and applied to still images or motion sequences. Users can either paint and draw manually or direct Studio Artist's automatic Intelligent-Assisted painting actions.

The software comes with over 2000 factory presets. Each Paint Preset consists of over 300 fully editable parameters that can be individually adjusted to control the look and feel of the paint. These synthesizer parameters can also be interactively modulated while painting.

Version 2.0 also includes image processing effects with Preset access. These include operations such as cartoon simplify, adaptive filtering, gradient modulation effects, color transformational mapping, white balance, and matte keying. IP Layer routing capabilities include any of the existing canvas layers as well as the source or current region selection, expanding the range of potential image processing and video effects as well as selection or alpha matte generation options.

Studio Artist 2.0 offers enhancements for generating time-based visual effects. Individual layers offer alpha support and can be individually positioned within the overall canvas. Layer keyframing includes Bezier paths, position, movie or image background content or source assignment for auto rotoscoping and compositing of multiple video streams. Support is provided for all Quicktime compression formats. Movie stream output can track the overall canvas or individual layers as they move within the canvas.

Studio Artist's suggested retail price is $379, and is available starting January 8th. Registered Studio Artist users can upgrade to version 2.0 for $179.

***CEATEC - Japan

October 2001

by John Latta

CEATEC was one excellent exhibition. Already our web site has conference photo coverage. We believe we have the most extensive coverage on the Net. We are pleased to extend our photo coverage with hot links. If a photo has a hot link you can drill down to what we wrote about the item, company and technology trends. Only with the WAVE Report.


Conference photo coverage

0200.2 Story of the Issue

***Looking Back - Looking Forward

by John Latta

2001 was a bad year. 9-11 stands alone in making 2001 like 1941 - both had events that shaped US history. The economy has its own story and especially the technology sector. At 4th Wave, the parent organization to the WAVE Report, we are approaching our 13th year in business. Our core business is market and technology assessment. The break over the holidays provided an opportunity to reflect on the business, economy and what we see lying ahead. Come along for the ride.

Market forecasting is an oxymoron. We come across literally hundreds of market studies and estimates. The vast majority are hardly worth the expensive paper they are written on. When we examined e-commerce market estimates the ratio of the maximum to minimum market size, for the period 2000 - 2002 was 66:1. The fundamental issue is that market estimates are predicting the future and this seldom is even close. Keep in mind that predicting the future, such as making market estimates, is a business not a science. See, for example, Sherden, "The Fortune Sellers," and Malone, "Predicting the Future."

What is much more important is identifying and characterizing market dynamics. That is, what are the forces that influence market movement. In the case of the stock market, for example, the time scale directly impacts the value of market dynamics. For example, market dynamics around hourly stock movements are usually only after the fact and thus useless. However, in technology adoption, which spans months and years, market dynamics are much more useful. Certainly one of the most useful, top-level books in this area is Moore's, "Crossing the Chasm," however, it is generic to markets and not specific. The challenge, in specific markets, is to identify the market dynamics and then extrapolate to forces that have the potential to shape the evolution of the market.

Optimism blinds. Over and over we find that those enmeshed in a technology cannot see the key issues. This was endemic with the Internet and how it was regarded by the technical faithful as the holy grail of opportunity. In general, many of the technology companies did not participate in the digital divide activities, in part, because they did not believe that an individual would not be interested in a PC and connecting to the Internet. As Ted Leonsis, Vice Chairman, American Online said at NGN 2001, "If you thought the first 30m subscribers were hard to get wait for the next 30m."

Consumer markets are where the action is. 67% of the US GDP comes from consumers. When seeking large markets this is the one place to look. The problem is that these are really difficult markets. The consumer is fickle, very price sensitive, has a short interest span and makes product purchase judgments in complex ways. Our analysis at 4th Wave looked at price elasticity for consumer markets and showed that 67% of all the units sold are done below $300. Further, as our Internet Appliance market study highlighted, we believe that significant potential markets lie in services. At the same time, digital devices must reach marginal consumer cost price points - <=$50. These are all hard messages for those who have lived for years at 80% gross margins.

Casual media is important. This is content created by the end users. We speak of e-mail as being casual text and the telephone being casual voice. The concepts of casual media may be quite expansive but with it comes an ease of use assumption. It must be trivial for virtually anyone to use. AOL sees the potential for this and yet they do not know in what form this will take. We believe that casual media will drive broadband delivery because when content is valuable to consumers they are much more likely to pay.

Market asymmetries do not last long. In telecommunications, investments were made in infrastructure for the Internet that had a weak revenue model. Advertising was to support free Internet sites and the business model was ineffectual. Toys based on electronics were to change the toy business but it is impossible to compete with high priced products when the toy ASP (average sales price) is only $6. This list goes on and on. Our analysis, using a market based zero-sum analogy, showed that it was very unlikely that the Internet would be able to display large existing non-Internet business models. It did not. Much of this now all looks so silly but then it was not.

Corporations are poorly posed to leverage a digital economy driven by consumers. We make the assumption that digital technology will be much more pervasive than it is today - potentially only in a few years. Who will lead these changes and develop the market? Fundamentally one of the most important factors is to understand the consumer, that is, to be a consumer company. Is Microsoft or Intel a consumer company? No. Certainly AOL is one of the better-positioned consumer companies. Sony is a consumer company. Guess who recently struck a deal - AOL and Sony. Being a consumer company is about corporate culture, attitude and market commitment. It is also about size, brand and scale. Small companies may have innovative products and services but they certainly do not have the scale to be a consumer company. Kerbango had an innovative consumer product but it is gone after being bought by 3Com - and then 3Com exited this market.

Looking forward to basics. Just as the stock market is now focused on "old fashioned" values the same applies to the digital economy. The now dead Internet firestorm blinded us from reality. We must return to providing consumer value, ease of use, servicing the mass population, not just the early adopters, providing useful products below $50 and continually listening to consumers. The hard part of developing the digital economy has begun. It is not clear that technical industries really get this. Many speak of the PC era coming back again. Forget this. That time has passed. PCs have become an essential commodity but it will not be the engine that drives the digital economy. The next bow wave of innovation will be much smaller than the one just ended. However, it will be an era where the Internet, consumer appliances and digital services blossom like we never envisioned before.

0200.3   3D

***ATI Ships FIRE GL 8800 Workstation Graphics Boards

(January 2)

ATI Technologies, a provider of graphics, video and multimedia solutions, has announced that its mid-range 3D workstation graphics board, the FIRE GL 8800, is shipping, with initial allotments going to Hewlett-Packard (HP) for inclusion in upcoming technical workstations.

The FIRE GL 8800 affords users a choice of software drivers for workstation operating system environments - Windows 2000/Windows NT and Linux with fully hardware-accelerated OpenGL capabilities. Standard features include 128MB of DDR memory and optimized Workstation OpenGL performance, DVD video playback as well as support for 3D resolutions (32-bit color) up to 2048 X 1536 pixels, digital flat panel and various configurations of multiple displays. The FIRE GL 8800 uses a 165 MHz integrated TMDS transmitter to support DVI up to 1600 X 1200 pixels resolution.

0200.4 Semiconductor

***iSuppli Forecasts Tough Times for Standard Logic Components

(January 2)

The latest projections from the iSuppli Market Intelligence Service indicate that the market for standard logic will experience its worst decline in history during 2001. Revenues for these small devices, commonly used in virtually every electronic system, will decrease 46 percent to just $1.6 billion from a high of $3 billion just last year. Recovery for this type of component will also lag the rest of the electronics industry, with revenues increasing to just over $2.3 billion by 2005.

According to the company’s report A FUTURE FOR STANDARD LOGIC COMPONENTS?, buyers should be on the look-out for designs that include TTL devices, as suppliers will be paring their offerings in this area and not pursuing development of new families of these parts. They should encourage engineering teams to switch to CMOS equivalents to avoid end-of-life problems that might impact continuity of supply.

This 50-page iSuppli Market Intelligence report takes a look at all standard logic segments, including CMOS, BiCMOS, ECL and TTL devices. It includes analyses of the entire supply chain for standard logic and profiles suppliers and their product introductions.

Find additional information about standard logic:

***Matrix Semiconductor Introduces 3D Semiconductor Products

(December 4)

Matrix Semiconductor recently disclosed technology for building semiconductor products in three dimensions. The company claims that by building semiconductor products in three dimensions, the technology makes the best use of a semiconductor wafer's area and achieves up to a tenfold cost reduction compared with existing technologies. By building "up" as well as "out," Matrix believes it can increase the number of bits per silicon wafer and design chips for high-volume production at the lowest cost.

In addition, Matrix claims to achieve these benefits using the standard materials, equipment, and processes already present and understood in semiconductor manufacturing foundries. Matrix and its technical team have been granted two U.S. patents covering the inventions around 3-D semiconductor design and production, and have filed over 60 additional applications.

The first product based on Matrix's technology will be Matrix 3-D Memory, a semiconductor memory developed for use as a "consumable," much like traditional camera film or audiotape. The initial markets for this first product will include archival storage for portable electronic devices such as digital cameras, digital audio players, portable games, PDAs and cell phones. The technology also demonstrates promise as a medium for pre-recorded content, such as music, electronic books, games, digital maps, and reference guides. Memory cards based on Matrix 3-D Memory will be write-once, available in standard flash card form factors, and interchangeable with standard flash cards.

Find additional information about 3D semiconductor technology:

0200.5 Displays

***DisplaySearch Report Indicates Worldwide LCD Monitor Shipments Rise 45% Q/Q and 143% in Q3'01

(December 21)

DisplaySearch, a FPD market research and consulting company, revealed in its latest Quarterly Desktop Monitor Shipment and Forecast Report that Q3'01 worldwide LCD monitor shipments increased at a record quarter-over-quarter (Q/Q) growth rate of 45% with year-over-year (Y/Y) growth at 143%, resulting in record high unit shipments of 4.13 million units, 4% higher than expectations.

Contributing to the quarter were record 21% Q/Q reductions in average selling prices (ASPs), resulting in price points that caused shipments to exceed expectations in North America, Europe and the rest of the world (ROW), while Japan declined more than anticipated. By size, growth exceeded expectations at 15", 15.3" - 16" and 17", and fell below expectations at all other sizes.

Due to price erosion, LCD monitor revenues grew slower than unit shipments at 15% Q/Q and 39% Y/Y to $2.725 billion. While LCD monitor shipments soared, CRT monitor shipments fell 12% Q/Q and 21% Y/Y to 19.1 million units. CRT monitor revenues fell 14% Q/Q and 22% Y/Y to $5.2 billion. As a result, LCD monitor penetration of the desktop monitor market jumped to 18% on a unit basis and 34% on a revenue basis.

While LCD monitor ASPs fell 21% Q/Q in Q3'01, leading to 45% Q/Q growth, ASPs are expected to decline an additional 12% in Q4'01, resulting in 48% Q/Q and 214% Y/Y growth to 6.1 million units worldwide. With CRT monitors expected to decline an additional 5% in Q4'01, LCD monitor penetration could reach 25% on a unit basis and 42% on a revenue basis.

Regionally, Europe and North America overtook Japan to become the leading regions for LCD monitor shipments in Q3'01, as predicted last quarter. While Japan's share of the LCD monitor market fell from 36% to 22%, North America's and Europe's shares rose from 27% each in Q2'01, to 31% and 32% respectively, in Q3'01. In Q4'01, Europe is expected to lead with a 32.5% to 32.4% advantage while Japan's share is expected to fall further to 21.8%. The impact of September 11th could be seen by the surge in 18" LCD monitor shipments in North America, which jumped 71% Q/Q due to replacement demand from the New York financial community.

LCD monitor suppliers focused on North America and Europe tended to rise in the supplier rankings in Q3'01, while those focused primarily on Japan declined. Samsung jumped from #3 to #1 on 85% Q/Q and 212% Y/Y unit growth, boosting its share from 7.0% to 8.9%. It was #1 in the 15" LCD monitor market, which accounted for 78% of the total market, with a 9.5% share and was #2 at 17", which accounted for a 12% share. Samsung remained #1 in Europe, #2 in ROW and rose from #5 to #4 in North America. More than 40% of its shipments went to Europe in Q3'01.

After one quarter at #1 on a unit basis, NEC-Mitsubishi fell to #2 on 27% Q/Q and 81% Y/Y unit growth, causing its share to fall from 8.6% to 7.5%. NEC-Mitsubishi remained #1 on a revenue basis with a 9.7% share and was #1 in North America for the first time this year, overtaking Dell. More than half of NEC-Mitsubishi's shipments went to North America in Q3'01. By size, it was #1 at 18", #2 at 15" and >20" and #4 at 17".

Dell rose from #4 to #3 on a unit basis in Q3'01 on 41% Q/Q and 225% Y/Y unit growth, with its unit share falling from 6.7% to 6.6%. By size, it remained #1 at 17" with a 20% share and rose from #6 to #3 at 15". Dell widened its advantage as a bundled supplier with a 21.5% share vs. 17% for the next closest supplier. The company fell to #2 in North America and from #4 to #6 in Europe. 60% of its shipments went to North America.

Fujitsu fell to #4 in Q3'01 on a 4% Q/Q decline and 39% Y/Y increase. Its market share fell from 7.2% in Q2'01 to 4.8% in Q3'01. The company remained #2 in Japan and rose from #6 to #5 in Europe. By size, Fujitsu fell from #2 to #4 at 15" and from #2 to #8 at 17".

Sony remained #5 worldwide on 2% Q/Q and 79% Y/Y growth. By region, it remained #3 in Japan, rose from #6 to #5 in North America and fell out of the top ten in Europe. By size, Sony fell from #3 to #7 at 15", rose from #5 to #3 in the 15.3" - 16" segment and jumped from #3 to #2 at 18.1".

NEC Corporation, which led the LCD monitor market for most of 1999 and 2000, fell out of the top ten to #14 in Q3'01 due to the softness in the Japanese market and lack of presence in North America and Europe. NEC remained #1 in Japan, however, with a 12% share.

In addition to revealing LCD monitor shipments by region by size in units and revenues, the report also reveals LCD monitor shipments by interface type, viewing angle technology, resolution, video input, channel and application, and forecasts this information forward on a rolling 8-quarter basis. By interface type, both analog-only and dual interface shipments gained share in Q3'01, with analog-only shipments rising 61% Q/Q to a 68% share, up from 61%, and dual interface shipments rising 59% Q/Q to a 20% share, up from 18%. Digital-only LCD monitor shipments fell 16% due to weakness in Japan, causing its share to fall from 21% to 12%.

This report also reveals LCD monitor shipments by LCD monitor OEMs, TFT LCD suppliers and controller IC suppliers. In the case of LCD monitor OEMs, Samsung remained dominant with a 14.2% share, up from 13%, on 56% Q/Q growth. Samsung's share remained more than twice as high as the #2 player. The company remained the top OEM at 15" with a 13.2% share and the top OEM at 17" with a 30.1% share. LG Electronics rose from #6 to #2 on 94% growth to a 6.7% share, while Acer Communications and Multimedia (ACM) enjoyed the fastest Q/Q growth of any of the top ten OEMs at 99%, boosting its market share from 4.8% to 6.7% and causing its ranking to rise from #7 to #3.

By region, Taiwan OEMs led with a 59% share, up from 48%, on 73% Q/Q growth.  Korean OEMs passed Japan for the first time, as predicted, on 55% growth and a 23% share, up from 21%.

In the case of controller IC suppliers, Genesis Microchip remained dominant in Q3'01 with a 58% market share, up from 47%. No other supplier had more than a 10% share. Sage, which Genesis will acquire in early 2002, had an 8.8% share, followed by SmartASIC at 8.2%. The controller IC market rose 37% Q/Q in Q3'01 on a revenue basis to $55 million and is expected to rise 24% Q/Q in Q4'01 to $68 million.

DisplaySearch's 300-page Quarterly Desktop Monitor Shipment and Forecast Report is available in English and Japanese in printed and electronic format.

0200.6 Financials

***Venture Capital Backed Companies Raise $35 Billion in 2001

(December 21)

VentureWire, a news source for the venture capital community, has released its year-end results for venture capital investing. Private U.S.-based companies raised $35.3 billion in 2001 in more than 3,000 financings.

This year is the third most active year on record for venture capital investment. In 2000, private companies raised $94.3 billion in 6,420 financings. In 1999, 3,507 deals raised $38.9 billion. These figures are based on daily investment totals recorded by VentureWire as well as additional research.

Information sciences companies, working in fields such as enterprise software, optical networking, and semiconductors, raised the bulk of the funding in 2001: $29.3 billion. That is down from last year's figure: $83.4 billion.

Life sciences investment was more stable. Biotech, medical devices, healthcare, and related technology companies raised $4.8 billion in 2001. That is down from $6.5 billion in 2000, though much of the decline came in the e-health sector. Investment in biotechnology and medical devices startups actually increased over last year.

These results are part of VentureWire's year-end venture capital research. Full details will be released in January.


Copyright 2001 The WAVE Report

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