Addressing Challenges In Developing CE Solutions With PC Technology

1. Addressing Challenges In Developing CE Solutions With PC Technology Rod FleckAMD FellowDigital Multi-Media Solutions Group

2. Agenda • Summarize some current CE solutions • Convergence of set-top boxes • Improving CE device capabilities with PCs in home network • Leveraging PC capabilities in CE solutions • Concepts for better CE solutions

3. Traditional Digital Home Theater In A Box Solutions • Easy to use – reliable • Good sound/video • Works right of the box • Easy to connect to other CE devices • Looks great – fits in home • Small – quiet • Fairly low cost ($199-$999)

4. Home Theater In A BoxSuccesses • Very strong growth in most markets • 4.7 million units in 2004 in US alone • Easy to sell as add-on to HD-TV • 40% are repeat sales • Meet many people’s needs for amplifier, DVD, AM/FM radio • Good for living room and ideal for bedrooms • Good way for dealers to up-sell DVD capability

5. Home Theater In A BoxWeaknesses • Still need a number of other boxes • Set-top box, DVR, game machine, VCR • Issues for single remote, ease of set-up • Most devices can not connect to other ethernet based devices • Most do not support hi-definition video • Quality (audio/video) varies wildly across many vendors/models • Many formats of video are not supported • No way to add capability

6. Set-top Box Convergence • Set-top boxes are incorporating DVD and DVD authoring capability • Set-tops are incorporating photo slide-shows and music playback solutions • TiVo provides access to TV content from PCs and remote control of recording • Many have access to most premium content

7. Fantastic Growth In Markets 2. Strong growth of DVR HHs 1. Rapid growth of HDTVs WW CAGR (%) = 72% 50 30% 300 WW Total 25% 45 250 25% 40 19% 200 35 20% Units in Millions 30 150 13% 15% Households (millions) % of households 25 100 20 10% 7% 15 50 27.7 3.2 20.9 10 5% DVR Households 3% 0 13.7 5 2000 2001 2002 2003 2004 FCST 2005 FCST 2006 FCST 2007 FCST 2008 FCST 2009 FCST 7.0 DVR Percent of Household 0 0% Source: Orange Book 2003 2004 2005 2006 2007 3. High theater-in-a-box interest 4. Advanced set-top-box growth Source: IMS Research CAGR (%) = 32% World-wide US Only Source: CEA

8. Potential Convergences HD-TVCompanion? Set-top Boxes MCE PC Theater-in-a-Box

9. Supporting Two Approaches To Improving CE Solutions • Leverage MCE extender (or Extender-like) technologies to expand the capabilities of traditional CE media portals • Enable CE features/capabilities ontoPC infrastructure (CE outside/PC inside)

10. Distributing Content Throughout The Home And On The Go Bring media and access mome media on the go Share media and web access Share TV programs with your PCs Manage pictures,music, videos

11. Leverage OpenStandards And Software • AMD LIVE! takes advantage of technologieslike UPNP, DLNA, WMC, Microsoft Extender technologies, etc. • Software stacks on target devices are smalland leverage low-cost nature of set-top and theater-in-a-box solutions • Primary required support includes • Some form of IP connectivity (802.3, 802.11, Powerline, etc.) • Embedded 100 MIPS core and 2D graphics

12. Bringing PC Technology Into CE Media Solutions

13. Trends Creating Opportunity PC Costs / Commoditization CE Complexity HW/SW HD-Def Content / TV Average per US Household: $1500

14. Example 2005 AMD Designs First Generation (2005) AMD Reference Design • Dealt with heat/noise • CE-style/user interface • Integrated AV connectivity • Easy modification of case, I/O, drives, CPUs, etc.

15. Windows MCE Successes • Wide access to most media types/formats • Easy to connect cameras, camcorders, and portable media players • Easy to share and backup media • 10’ experience is intuitive • HD picture quality is good • Spotlights offer new media to 10’ users • HD-Audio is far improved to AC-97 • Great for TV and PC with one display • Easy access to casual gaming

16. Windows MCE Challenges • Other devices are required in most cases • Digital interfaces preserve quality • Standard connector plugs missing in many cases • Home connectivity is still poor for video • Many devices are too big, too hot, and lack CE interfaces and style • Full premium content fair use not yet available • Protected content outputs are rare • Devices are too expensive in many cases

17. Some Good News On Horizon • Windows Vista Premium offers richer entertainment experience • More 10’ interface based web content • OCUR or OCUR-like devices should allow digital access to premium content • Larger amount of internet based content from music to movies to long-tail content • Optical platform will support both HD-DVD and Blu-Ray

18. Can We Do Better – YES? • Lower cost – higher chip level integration and higher volume • Smaller designs – mITX or similar motherboards, leverage laptop drives, smaller power supplies • Lower noise – lower speed fans, lower power processor, more efficient video processing • Better front-end costs – higher integrated multi-standard and embedded CA solutions • CE industrial design – better front-panel user interface and better style • Full HD-support – move beyond today’s HD MPEG2 to upcoming H.264 in TV standards and multiple codecs for HD-DVD or Blu-ray

19. Introducing EnergyEfficient AMD Processors • Energy efficient AMD desktop processors • Can help OEMs design small form factor (SFF) PCs thattake up less space and are more aesthetic, giving them the opportunity to provide differentiated and competitive solutions to their customers • Can reduce the noise and heat emitted from systems to extend the longevity of their PCs while offering consumer and business users a quieter, more pleasant experience in their offices or living rooms • When combined with AMD’s award-winning Cool‘n’Quiet™ technology, can enhance system energy efficiency

20. AMD Energy Efficient ProcessorsDelivering improved performance-per-watt • Reducing energy costs • Energy efficient AMD desktop processors provide greater performance-per-watt over AMD’s standard power desktop processors to reduce commercial and consumers’ energy bills • 65W AMD Athlon™ 64 X2 dual-core processors provide up to 37%greater performance-per-watt than standard power (89W) processors • 35W AMD Athlon™ 64 X2 dual-core processors provide up to 154%greater performance-per-watt than standard power(89W) processors • Enabling small form factors • Energy efficient AMD processors enable OEMs and the channeloffer small, sleek, aesthetically pleasing entertainment PCs and commercial slim-line and blade PCs • Consumer and enterprise demand quiet and cool PCs • By using less electricity, energy efficient AMD desktop processors can lead to lower energy consumption, contributing to an improved global environment

21. Can we Improve on Audio/ Video Quality? – Yes • Newer generation graphics processors are including higher quality TV, color accuracy, MPEG decoding, etc. • Full digital outputs are becoming common • Full 1080P support is available

22. Big Challenges Ahead • PC based solutions will always havecost disadvantages compared to single purpose CE solutions • Single function devices will always take less effort to be more reliable • Complete multi-function CE devices must have solutions that include many CE devices in rack, but still be easy to use

23. Need To Offer Two SW Options • Windows Vista Premium – for thosewho want to load their own applications, games, etc. • Embedded XP/Windows Vista – for those who want a more stable/externally supported solution • Device updated by CE manufacturer or service operator (cable, sat, or telco) only • Still leverage PC applications base, commodity HW, and infrastructure

24. Better Device Control • Leverage alternative remote controls • Cell/cordless/VoIP phones, game panels • Interface to laptops or PDAs for search/control/set-up • Better front panel control • Easily find audio music, radio, IP-radio without TV • Allows users to easily select next media while enjoying present content on TV • Allow one room to control other rooms • Control music, lighting, security, etc., from any room • Integrate speech as an option

25. Embrace CE Community • Leverage what many do best • Highest quality audio/video • Video aisle sales channel • Multi-room support • Subsidized device via service opportunities • Learn from CE success • Interface to as many devices as possible • Leverage higher quality home networks • QOS driven (like MoCA or Powerline)

26. Calls To Action • Microsoft • Investigate Embedded OS with 10’ MCE/Diamond features • Chipset and processor companies • Decrease cost/power consumption while improving user interface/audio/video quality • CE vendors • Embrace whole home connectivity with truly open standards • Service providers • Leverage PC environment for more personalized content/ads • Front-end providers • Integrate OCUR (or equivalent) with demod into single chips • Motherboard vendors • Support full range of A/V plugs and HDCP content protection • Home network providers • Provide true QOS for multiple A/V streams within home

27. Summary • CE based home entertainment solutions can easily be extended with middleware allowing access to PC for media and heavy-lifting • PC technology can be effectively integratedinto next generation CE box solutions, but • Software is critical to bringing new functions and services • Audio/video quality should be as good or better • Ease of use and cost are critical to success

28. From Creation … … To Consumption Create at the speed at inspiration Smarter Digital Entertainment