Nine Microsoft Strategic Partnerships
Its like were all put in the same bucket and were all tarred with the same brush. Its nuts. Theyre going to kill stock options, so finally the east coast companies can get even. This is not about the old economy vs. the new economy. Its about the US losing its position to countries that are still hungry. Microsoft gets it, and thats why were happy to have nine programs with them. Nine Programs? What are they? Well I have this paper here that lists all of them.OK, what can I talk about? One of them is ultrawideband at .13 micron using just 350,000 gates. Ultrawideband doesnt need RF, you already have the speed and you just crank out pulses. Another thing were doing is smart displays with Microsoft. Smart displays are like a webpad grown up and a webpad shrunk down. If you use a PC in your home, it works great., but you need to run Windows Media Center. Version 1.5 of smart displays uses 802.11b, but there is some trouble with video. Editors Note: Even with National shedding the Geode business, the company still plans on working with Microsoft on Smart Displays, along with the other partnerships. Version 1.5, due in June but demonstrated this week at CeBit,, will let you simultaneously use the smart display and your PC. In addition, another box due this spring will turn an old monitor into a "smart display" too. But those smart displays are too expensive. Whats going to bring the price down? We have to be able to get the glass for less than 100 bucks. Thats happening now. $495 is the target price for this product. Our version of the reference platform is all our silicon and we just continue to forward integrate. Also, nothing gets the price down like getting the volume up. What else? Were just scratching the surface with SPOT, soon well end up with a low cost FM radio that can go into everything and anything. Extrapolate from ultrawideband at 10ghz, where anything beyond .13 micron we get for free, we could easily have ½ dozen 10 gig radios where we could pass around data just among ourselves. Why did Microsoft come to National: National is pointed in the same direction as Microsoft. Look at Geode for example. When we first showed the web pad in 1998, Bill Gates made three trips down to silicon valley to see it. (Editors note: shortly after this interview, National ended the Geode project.) Whats your outlook for 2003: I see us on an upswing again. I predicted that the recovery would be in full steam June 21st 2003 at 2:15 in the afternoon. Every quarter Craig Barrett gets away with predicting that the recovery is two quarters away, and I wanted to be specific. But we actually did some thinking about this, we went back into history plotted and plotted out the business cycles. We looked at it, and its just a sign wave, an envelope of minimum and maximum, with the width of the wave showing the time in boom vs. the time in recession. We came up with an equation and plugged in the real numbers in. Some of the peaks were off by 2%, some by 5%, But then the guy who did it used a neural net to smooth it out, and it looked incredibly accurate. Then we cranked out the formula, and plotted the medium of the sinusoidal wave heading back up. It ended up being the end of the second quarter. So I picked June 21st because its my anniversary. I figured if I picked June 21st, ill always remember my anniversary. When I announced it, the reaction was funny. Half of the people took me as dead serious, the other half said it was obviously tongue in cheek. But its not that far off from what others are thinking. When we get back in full swing, we see the same amplitude as we had during the dot com boom, during 2004. The peak is further outGet back in full swing, same amplitude of dot com boom in 2004, on the way up. The peak is further out, but Im not going to tell you where it is. Today were seeing a volume pickup, but you never know. The lead times are so much smaller. The customers dont have to give us any visibility, because the semiconductor industry has excess capacity. But the industry needs these periods, because all of a sudden you can get very complex technology for free. The price comes down, and brand new ideas incubate. Thats because you can get what was previously high performance at a high cost, and now its high performance at a low cost. Where will National be in five years? In five to ten years we expect sight and sound an information to be integrated together into a single chip. Well be a major player in UltraWideband too. Beyond that well see radios that dynamically reconfigure themselves to look for the lowest cost, highest performance connection to the internet backbone depending on what you need and where you are. Well continue to work with Samsung on the display technologies. Well continue to be drawn into the consumer market. Consumer electronics is such a big show. Theres a huge blurring of the line between consumer and commercial. Is that laptop a commercial product or a consumer one? Will you do an "Intel Inside" campaign? We did this AOL Phillips set-top box, and one of our aggressive young marketers said, "if we give you a discount, can we get a National Inside on the box." I put an end to that were not doing a Nascar, were doing a set-top box. Do you see a killer app on the way? Check this out (Brian pulls out what looks like a large yellow Tylenol caplet). This is a camera that does an endoscopy. It records 2 frames a second from launch pad to splashdown, and it completely replaces existing technology. Inside here is an imaging device, a radio, and a white LED driver. It shoots pictures for 24 hours. The pill costs $450, same price as flexible one, but much, much more comfortable. At National, the more we can suck everything onto one chip, the more we can do, more cheaply.
(As Brian reaches into his bag, his PR person tells him that some of them are still secret).