Wireless Net Fueling Java VM Boom

Electronic News, August 20, 2001 by Max Baron

THE JAVA VIRTUAL MACHINE (VM) MARKET will get a boost over the next few years from the rapidly developing palm-top computer and digital cellular telephone industries. Java VMs translate Java code so that it can be executed on the instruction-set architecture (ISA) of any microprocessor and can be implemented via software only, hardware only, or a combination of the two. Hardware-based Java VMs are particularly well suited to applications in small form-factors that are designed to limit battery drain such as wireless handheld devices used to access the Internet.

Rapid growth in wireless Internet services will help push the Java VM market, composed of extensions, software interpreters and accelerators, to more than 720 million units annually in 2005, up from about 35 million units in 2000. The market will grow, on average, about 84 percent annually during that period.

No microprocessor architecture supporting Java has been successful in generating significant volume despite Java's popularity among Web developers. That's one reason Java VMs are becoming more prevalent in mobile communication and computing appliances.

Deployment of wireless, 3G high-speed bandwidth will jumpstart wireless Internet services, and Java VMs will be used to support the devices used to access them. This market acceleration should begin in 2002 when some large telecom providers step up their 3G deployment efforts.

Currently, Java VM software interpreters lead the market by far with an expected 97 percent share in 2001. By 2005, however, this segment will decline to just 30 percent as Java ISA extensions vault to the lead. Although the accelerator segment will be the smallest of the three, it will grow the fastest -- an average of 230 percent annually from 2000 to 2005.

Makers of hardware-based Java accelerators claim their products perform 5 to 10 times faster than software-only Java VMs. These products make far fewer demands on the host microprocessor than software VMs. This makes them ideal for mobile products that typically use low-power processors that don't match the performance of desktop PC processors. Most revenues from accelerators are likely to come from licensing fees. These fees are fetching an average of $350,000 per license in 2001.

Internet-accessing mobile devices will be by far the most dynamic market for Java VMs. The ARM architecture is the preferred microprocessor core for mobile devices. Intel Corp.'s XScale and Motorola Inc.'s recent purchase of an architectural license from ARM Ltd. are critical in ARM's dominance of the mobile territory.

Over the next five years, Java VM intellectual property (IP) revenues are unlikely to support more than a few providers. To survive, providers will have to apply the principles of accelerators to other key Internet functions such as imaging, video and audio. These functions will become more important to mobile Internet users with the advent of 3G services.

Leading IP owners and semiconductor and ASIC companies are likely to land most of the large-volume Java VM accelerator business from major OEMs. Smaller and less-established companies have a better chance of making a splash in low-and medium-volume markets. Large-volume opportunities will motivate leading IP companies to extend their own ISAs.

In today's slumping technology sector, it's hard to call anything a sure bet. But users' increasing desire for anytime, anywhere access to the Internet via mobile communications devices makes Java VMs a strong play.

Max Baron is principal analyst for Cahners In-Stat/MDR's Digital Engine Service based in San Jose.