Yankee Group Report Examines the Creation of StarCore LLC and the Challenges Facing Incumbents in This Estimated $5.5 Billion Market

Business Wire, August 12, 2002

Business/Technology Editors

BOSTON--(BUSINESS WIRE)--Aug. 12, 2002

Can Motorola, Agere, and Infineon Offer a Better DSP Core?

On June 18, Motorola and Agere Systems announced the incorporation of StarCore LLC with Germany's Infineon Technologies AG. Originally established by Lucent Microelectronics and Motorola in 1998 as a joint DSP design center, StarCore will now focus on standardizing and proliferating DSP core technology via an "open" licensing business model.

The Yankee Group believes the consolidated effort of the three principals represents a challenge to dominant Texas Instruments (TI) as well as Analog Devices in the estimated $5.5 billion market for programmable DSP cores, which are used in consumer electronics, wireless devices such as 2.5/3G handsets, and cellular network infrastructure. According to John Jackson, Wireless/Mobile Technologies analyst and Report author, "Most importantly, the alliance signifies an acknowledgement by Motorola and Agere principally, that neither is capable of independently appropriating market share from TI. With market factors evolving, however, the joint competencies of StarCore's three principals, effectively harnessed and supported under this innovative business model, hold considerable promise for programmable DSP design and standardization."

The July 2002 Report, "Target TI: Can Motorola, Agere, and Infineon Offer a Better DSP Core?," examines the strategic motivations for each participant in establishing StarCore LLC. The Yankee Group illustrates the execution challenges and examines the potential impact of the alliance on the DSP core market, specifically as it relates to 2.5G/3G handsets and networks. We also note the increasing trend toward outsourcing as traditional component manufacturers move toward more intellectual property-based business models.

NOTE TO EDITORS

For an interview contact, John Jackson at jjackson@yankeegroup.com.

THE YANKEE GROUP (www.yankeegroup.com)

The Yankee Group is a global leader in technology research and consulting. Our customers, which include technology vendors and users, benefit from our accurate, reliable, and trusted research, consulting, and personalized one-to-one client interaction covering communications and IT products and services. Now in our fourth decade, the company is headquartered in Boston and maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.