I read that article (I usually pretty much ignore most things published on SA). The author’s point was pretty much that once your at 1080p resolution, you’re at the end of the line for video (the author more or less asserted that no one really needs or benefits from 4K video). So with this upper end on resolution being the limit of what you can deliver, it’s only a short while for AMBA competition to put a lot of price pressure on them and therefore earnings will crumble.
A similar question was put to Fermi Wang, AMBA CEO during the conference call. In part here’s his response:
Right. So, yes, you’re right. Of course in the past, we continue to pushing the envelope on the performance based on the resolution and frame rate. I think that suppose there is other angles you need to look at. For example there’s a huge transition from H.264 compression to HEVC, HEVC provides 50% compression efficiency improvement, but our estimation the [indiscernible] size and on the importer side is five times more complicated.
So after that if you want to continue improved performance based on HEVC and higher frame rates, high-resolution really create another barrier to entry especially if you want to maintain the power number as a reasonable numbers of our portable cameras customer can fit HEVC say full HD camera into the same form factor. So there are multiple angles that we are addressing right now.
In addition to that many features that we talk about has new topic on cameras. We talk about high dynamic range, which is twice higher performance, which is compared to low dynamic range and high dynamic range solution. We talk about low light performance, we talk about video analytics in fact video analytics in my opinion going to get bigger and bigger in fact.
We did quick as we mentioned about the performance required to implement all of the video analytics feature that we need to implement in next few years the number is a mind-boggling. So I think there’s many other ways in addition to just a frame rate and the resolution that we can continue to push the performance and so that we can continue to introduce higher end products in the future.
I won’t pretend that I understand everything he said in detail, but in a nutshell, there are a host of factors beyond resolution that contribute to AMBA’s competitive advantage. Compression, power consumption, low-light performance, dynamic range, video analytics, physical weight and size - probably more things he didn’t even mention at the spur of the moment.
I’m not selling - I’ll be buying more as soon as I can raise some cash.