Infineon - Valuation

Sunday, July 27, 2008

[Originally for Sramana Mitra's site]

Last month, we discussed in detail the various businesses of Infineon and also peeked into its strategy. We noted that Qimonda was the cause of most of its miseries. We also suggested acquisition and growth possibilities for the German company. Against this background, it is time for us to look at its valuation.

I value Infineon at $9.30 per share. This valuation accounts for the recent Qimonda write-offs as well as potential future losses due to the memory manufacturer. The two successive write-offs, totaling 1.411 billion euro, demonstrate Infineon’s firm commitment to leave the loss-making Qimonda behind as it creates a strategy for its future.A further upside of my valuation is the wireless communications segment. Given the competition and Infineon’s relative unpreparedness for the convergence movement, I have assumed a modest growth rate for Infineon’s communications segment. The situation can change if the company addresses the lack of connectivity solutions in its portfolio, either through long-term partnerships or acquisitions. With the company vigorously shaking off Qimonda, watch out for more activity on the wireless front.

The biggest downside is expense management. The analysis assumes that the company will execute on its promised cost-cutting measures. Its non-Qimonda operating margin of around 5% is far below the industry average. Thus, CEO Peter Bauer’s objective of reducing costs by around $300 million a year becomes a critical metric for the company’s success. It remains to be seen how successful the company will be in cutting 10% of its workforce in the face of Europe’s tough labor laws. If it continues to have low margins, Infineon’s valuation will drop to about $6 per share.

Infineon has its task cut out for it since the company has to strike a fair balance between its expenses and the need to embark on an aggressive strategy to grow its mobile wireless market share. It has the 3G iPhone now, but all bets are off for the mobile chipset supplier for next year’s refresh. It hopes to retain Apple with the newer 3G chip and reference designs it announced recently. But beyond that, Infineon may find the going tough on the baseband front. With Nokia and EMP looking away from TI in the recent years, STM and Broadcom seem poised to better exploit this situation. Infineon will have to embark on an aggressive all-inclusive platform development strategy. But this involves high development costs. With the current turmoil due to Qimonda and its string of poor quarterly results, the company will find it tough to justify such a strategy.

In summary, the $9.30 valuation assumes that Infineon will successfully get over Qimonda and execute on its expense management plans. This valuation has the potential to go up if the company overcomes competition to aggressively grow its wireless communications business. The stock is trading around $8 today after its recent quarterly results. I will perhaps not buy Infineon shares now. I would prefer to see the company deliver on its cost-cutting measures. But will I buy it at $7? Yes, since the upsides outweigh the downsides on this stock at that price.

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Posted by Vijay Nagarajan at 3:41 PM 0 comments  

Atheros to Broadcom

Saturday, July 26, 2008

Hello readers,

I have resigned as a Systems Engineer at Atheros this week after a very fulfilling year's stint. I will be joining Broadcom Corporation as a Product Manager early August. The move is a carefully thought out career decision to progress to strategy and business development roles in the wireless/semiconductor industries.

Atheros has been a great company to work for. As a company, it is very nimble and is great at execution. I view it as a 900 person start-up replete with very friendly people. I have special respect and appreciation for Don Breslin who is a great engineer and a wonderful manager. I will treasure the positive experiences at Atheros as I progress in my career.

Moving forward, I am getting into a role that I have been carefully chiseling towards. Broadcom, with its broad portfolio and its wide brand recognition offers me the right platform to make my transition from engineering. Besides, as I have written in the past, I believe that Broadcom, with its aggressive campaign in mobile wireless and its complete platform portfolio, is positioned to be a key player in the convergence devices movement if it plays its cards right. So, I am very excited about my role and look forward to being an active contributor to its future revenue and profit growth.

If you wish to discuss this move further with me, please feel free to contact me using the email form on this site.

An unfortunate side-effect of this move will be my inability to continue coverage of most, if not all, topics in the blog. I may, from time to time, post tutorials, FAQs and white papers on various wireless topics but will abstain from wireless/semiconductor stock analysis and commentary from August.

Given this situation, I am looking to find writers/analysts who can take over my blog and continue to build on its credibility and visibility. The sizable readership and subscribers base now comprises primarily of wireless industry executives, entrepreneurs, VCs and the Wall Street community. So, well-researched and credible content guarantees great visibility. Interested readers, please contact me using the email form in this site with your professional details and why you are interested in taking over my blog.

The blog has been a personal branding vehicle for me. For the moment, I have to take this hard step away from this blog that I have so passionately maintained over the past year and a half. I will, however, try to tie up some loose ends and also address some recent reader requests over the next week.

While I will focus my wireless market insights and analytical abilities towards Broadcom’s continued success, I am still undecided on how I can channelize my passion for writing and information sharing. I am contemplating another blog covering others topics of interest to me such as product management functions, financial analysis methods, blogging as a personal branding and developmental tool, and technology career choices. I welcome other ideas from my readers as well.

Finally, I wish to thank my readers who have been a motivating factor for me to produce well-researched content. It has been a fulfilling year and a half for me. Thanks again!

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Posted by Vijay Nagarajan at 9:28 PM 1 comments  

Inside the 3G iPhone - revisiting my predictions

Sunday, July 13, 2008

TechOnline published a very detailed teardown analysis of the 3G iPhone that can be accessed here. Their analysis went a step beyond iFixit's disassembly as they scrutinized 'under the hood' of the various iPhone components to identify them more accurately. Their extraordinary effort also lets me review my iPhone predictions that were summarized in my June 2008 post here.

Here is the photo of the iPhone 3G chipset as dissected by TechOnline -


Prediction #1: As this photo indicates, Infineon emerged the cellular chipset winner. The analysts are not sure if it is the PMB 8878 since they had no way of comparing the iPhone component with a known sample of the Infineon 3G baseband offering. They found that the baseband was a two-chip, single package solution. They further identified it as the 2G chip and a 3G accelerator.

For the moment, I have no reason to suspect that this is anything butthe PMB 8878. I don't believe that Infineon would have a chip customized for Apple. On the other hand, the company perhaps quickly cobbled together a 3G solution in the form of a two-chip PMB8878 to cater to the market needs (including those of Apple.) Given the long cellular product cycle and the tight iPhone schedules, this would have been the path of least risk as compared to spinning single chip solutions. For the record, Infineon recently announced smaller and more sophisticated 3G solutions with its own software stack. These latest chips (that are not in the iPhone) are likely the more thought out, and more optimal single chip UMTS solution.

The two-chip solution inside the iPhone 3G further brings back the question I have been asking for a while now. Does the 3G IP in Infineon partially or wholly belong to InterDigital? It could well be that the iPhone has many if not all elements of the SlimChip IP from InterDigital. Apple's license with InterDigital last year will then have deeper implications than the normal 3G license that the King of Prussia-based company seeks from handset vendors.

While the exact details will emerge in the coming days, my prediction #1, "Infineon will be at the heart of the iPhone. " has turned out to be true.

Prediction #2: "Samsung will perhaps continue to own this part. " Not much surprise here as the iFixit teardown revealed last Thursday. Prediction #2 was true too.

Prediction #3: Before we discuss WLAN and Bluetooth, here is a second picture from TechOnline -

So, as it turns out, Apple yet again went with Marvell for WLAN. Prediction #3, "For platform stability issues, I will bet on Marvell grabbing this socket again." was right.

Prediction #4: "If WLAN belongs to Marvell, CSR, which is in the current iPhone, will likely own the Bluetooth socket again." A look at the figure above will make it 4 on 4 so far.

Prediction #5: The 3G iPhone carries the Hammerhead II GPS solution co-developed by Infineon and Global Locate, the company that was bought by Broadcom last year. So, that makes my prediction #5 - "The next generation will have GPS and it will likely belong to Broadcom" - right too. I don't know the specifics of the licensing agreement between Global locate and Infineon. So, I will not be able to comment on whether BRCM will benefit from this component, if at all.

Prediction #6: The touchscreen controller belongs to Broadcom as well.

In summary, all six iPhone predictions I have recorded in this blog have come out to be true. As you can see, I based my prediction on most of these components on the rationale that Apple will not want to hamper the stability of the 3G iPhone by testing out new components in a short time span. As it turns out, most of Apple's component decisions were based on this very logic and is aptly pointed out by the TechOnline article.

[PS: For a more thorough look into the component dissection, please visit TechOnline's site]

[Disclosure: Long IDCC at the time of writing]

Disclaimer: All thoughts expressed by Vijay Nagarajan in his articles are his and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.

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Infineon cellular chipset in iPhone 3G

Thursday, July 10, 2008

iFixit has dissected the iPhone 3G here. It is a well done and well documented dissection that comes a full day early for iPhone geeks in the US. I do not wish to steal the thunder from the ifixit folks. So, while I will let you look up the rest from the iFixit site, I will touch upon one component that is very close to my heart.

I am hopefully not jumping the gun but here is what I read from the photos that iFixit has posted-

While the folks who did the dissection have so far identified the Infineon Smart3i chip, I think the photo of the chipset also indicates the Infineon 608 baseband. The chip with the part number 337s3394 is very likely the PMB8878, or XGOLD 608. This is further corroborated by the 608xx labeling on that chip and also a similar part from the last iPhone that was identified as the S-GOLD2 baseband processor.

This perhaps confirms something that I have been predicting for around a year now. Infineon's chipset is in the 3G iPhone and by extension, InterDigital's 3G protocol stack is also in!

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Posted by Vijay Nagarajan at 7:58 AM 4 comments  

InterDigital - Thoughts on the ITC staff report

Wednesday, July 9, 2008

The staff attorney assigned to the InterDigital-Samsung ITC dispute favored Samsung in his report. His position that there is no violation calls for rejecting InterDigital's proposal to ban disputed Samsung products in the US. InterDigital's stock took a 25% dip as the Street is now pessimistic about its prospects. As the drama unfolds, here is an attempt to even out public perception. Before you read on, however, please note that I am neither a legal expert nor a Wall Street analyst. So, take it for what it is, just an opinion.


Firstly, while the staff report is an unbiased third-party opinion on the case, it is still only one instrument for the Administrative Law Judge (ALJ) to decide. The judge is yet to hear both companies' positions. The staff report is not binding on the judge. There is precedence in the past where the ALJ has acted against the staff recommendation. So, while InterDigital has lost some positioning in this case now, the staff recommendation is certainly not the end of the road for this ITC dispute.

Secondly, contrary to what I alluded to in my last post, an unfavorable decision by the ALJ will only reject the call to ban Samsung phones in the US. Besides, one theory is that a 'no violation' decision may be the result of the staff attorney finding that this is a licensing dispute that has to be amicably resolved between the parties without warranting a ban.

Thirdly, and perhaps most importantly, InterDigital has many more things going for it beyond the ITC dispute. Most notably, the company has already licensed to Apple and RIMM, both of whom are battling it out in the smartphone market. It is also very likely to be a beneficiary of the 3G iPhone to be released shortly. Ironically enough, Samsung sources 3G chipsets for some of its designs from Infineon. These phones will hence use InterDigital's 3G protocol stack and, like the 3G iPhone, contribute per-unit royalties to the King of Prussia-based company. You can find more about InterDigital's products and strategies here and here.

Finally, for the curious minds who are wondering what will happen to InterDigital's valuation if the Samsung case goes against it, I will direct you to my February 2008 valuation post here. A nominal assumption on the total royalty money gave me a $75/share valuation then. You can look at the revenue impact of the royalty rate replete with graphs there.

In summary, I feel that the sell position taken by many investors is understandable. InterDigital is a volatile story stock and the ITC staff report did little to buttress investor confidence. On the other hand, a 25% drop seems unwarranted in the light of a) lack of enough information given that the case is still in its preliminary stages and b) many other developments to look forward to from InterDigital.

[PS: Thanks to all the readers who responded to my previous post]

[Disclosure: Long IDCC at the time of writing]

Disclaimer: All thoughts expressed by Vijay Nagarajan in his articles are his and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.

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Posted by Vijay Nagarajan at 3:30 PM 1 comments  

InterDigital - Samsung ITC case

Tuesday, July 8, 2008

If there is an award for bad blog-post timing, then I will perhaps be a front-runner this month! Just yesterday, I posted about Nokia and IDCC settling their UK disputes. I mentioned that it was a sign of more good news to come. Today, IDCC announced that the ITC staff in the Samsung case has favored Samsung. This has let to an astronomical 25% drop in IDCC's share price as people scampered to let go of their shares in anticipation of more bad news.

This is not a great development for IDCC. The downside is that if the ALJ upholds the staff's recommendation, then IDCC will lose any right to collect royalty from Samsung in the US. This will also likely percolate to its ITC case against Nokia creating a domino effect. This being said, the dispute still has a long way to go. Both parties are yet to make their respective cases.

For the moment, I am looking for more clarity in this matter. I would appreciate it if readers can provide any information that can be disseminated to educate others here. Please send me emails through the contact form. I would especially appreciate insights on the actual proceedings, court reports etc. that can go beyond what is being commonly reported.

More updates to follow as I come to know more!

[Long IDCC at the time of writing]

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Posted by Vijay Nagarajan at 10:28 AM 0 comments  

InterDigital - More good news on its way?

Monday, July 7, 2008

InterDigital, the King of Prussia-based wireless company, saw its shares jump by about 5% last week when the S&P and Nasdaq were down by around 2%. The reason for this optimism was the news that InterDigital and Nokia have agreed to end two legal proceedings in the UK.

In July 2005, Nokia asked a London High Court declare InterDigital's intellectual property as non-essential to UMTS (3G standard encompassing WCDMA and HSDPA). InterDigital, in turn, filed a suit against Nokia in December 2006. The companies recently decided to drop these lawsuits. The terms of the agreement are unknown. Besides, the companies continue to be at loggerheads in front of the ITC in the US. While this settlement does not reflect a sudden friendliness or alliance between the two warring companies, it is certainly a good sign for both parties.

For Nokia, it means lesser distractions from its focus of retaining and growing its mobile market share and its fight to match new niche players like Apple. For InterDigital, ending the UK disputes quickly was becoming important. Its legal disputes with tier-one handset vendors were dragging their feet pulling down the company's intrinsic value with them.

I see the amicable end to the UK disputes also as a sign of more good news to come. For both companies, this is a good data point for their ITC-related licensing negotiations. If the companies can agree on the ITC litigation as well (which I presume will revolve around the exact 'per-unit royalty' that InterDigital will then collect from Nokia's 3G phones), the wireless IP-house will widen its 3G footprint. It will also carry this momentum forward into the ITC litigation/negotiation discussions with Samsung for more favorable results.

Like I have said before, I don't doubt that IDCC has important 3G IP. It is more a question of when and how much the industry is willing to pay for it. Maybe we will know many of these answers over the next few months. Earlier coverage on InterDigital can be found here, here and here.

For me, like for many other InterDigital investors, this week will answer some other questions to bring more good news. This Friday, I will watch out for the many 3G iPhone teardowns that will follow its world-wide release. If my analysis is right, we will see InterDigital's 3G protocol stack inside the new iPhone. IDCC is guaranteed per-unit royalty from Infineon for each of its 3G chipset sold. I will let you guesstimate what it means to InterDigital's revenue for the next few quarters!

[Long IDCC at the time of writing]

[Disclaimer: All thoughts expressed by Vijay Nagarajan in his articles are his and do not necessarily reflect those of either Atheros Communications or TensorComm Inc.]


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Posted by Vijay Nagarajan at 9:00 PM 0 comments  

Smart Energy - Business Case

Why would the energy/utility companies implement Smart Energy? What sense does it make for them? Fair questions to ask! I will attempt an answer here.

Despite the ‘green’ benefits, the most important thing to make this concept fly is for it to make business sense to the utilities companies and the slew of start-ups that have created an elaborate value chain.

The first argument is the ability of these devices to delay capacity expenses for the utility company. What does this mean? The energy companies have already invested substantial money in the infrastructure. For them, as the number of users increase, it will help them until they hit maximum usage. Once the usage hits this point, there are only two ways to go. If it has more money, and if it makes economic sense, the company will roll out infrastructure to support the load increase. If not, the user is faced with power outage.

The smart energy systems present an alternate route for the utilities companies. If the usage is controlled to a point that the capacity is reached five years later rather than today, then it delays the additional roll-out thus saving these companies billions of dollars temporarily.

Of course, the additional roll-out of capacity is inevitable. So the utilities companies should analyze what, if any, are the additional economic benefits of such a system. While I am sure there are research studies with cost-benefit analysis, the usage models and the consumer participation levels are unclear. So, the energy companies are likely to roll out minimal monitor systems to experiment and add incremental features to get a sense of what the consumer wants and what he is willing to pay.

Secondly, once implemented widely, the industry can have a sustained revenue stream. One way to accomplish this is the Software as a service (SaaS) model. The utility company can charge a nominal monthly rate per household per month for the software monitor and control platform. The company, in turn, can share this revenue with the software platform provider. Alternately, the utility company can pay a one-time fee for the platform vendor and monetize the service by itself.

To conclude, Smart Energy can make very good economic sense to the companies involved if they can combine creativity, common sense and a basic understanding of consumer behavior.

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Posted by Vijay Nagarajan at 2:22 PM 0 comments  

Smart Energy - Convergence and consumer awareness

Saturday, July 5, 2008

In the two earlier parts of this series here and here, I had talked about various aspects of smart energy. In this part, I will look into smart energy and convergence devices and will touch a little bit on consumer awareness.

7. How about a more advanced use case?

That brings me to my favorite topic – convergence devices. It is very easy to foresee a remote application that will interface with the backend platform and help you control your electrical appliances through your convergence device. A very appropriate example is to have a smart energy iPhone Application, right?

Here is another use case. Suppose that your laptop or your mobile device has a zigbee radio and an energy management stack running. You could potentially set the application up such that when you step out of the house, your mobile device ‘loses contact’ with the gateway. The gateway then realizes your absence and sets the devices in your home in ‘hibernate’ or ‘absent’ mode. This may include a much lower thermostat setting, automatically turning off your humidifier or your ice-machine. Cool, eh?

8. What part should the consumer play? Will this be thrust on us?

Well, like I mentioned earlier, this is very much a part of the ‘green’ initiative. But its implementation will be successful and pervasive only when there is a win-win situation for the consumer and the utility company. While the utility company and the value chain will seek to monetize smart energy, they will have to ensure that the consumer will also benefit. The ideal situation will be for the industry to give back to the consumer rather than merely benefit from his/her philanthropic nature. So the consumer, in his part, should make sure that the utility company does not take him/her for a ride and that there is a value proposition for all parties.

Remember that ‘Smart Energy’ is not just another gimmick by the corporate world, but is for a noble cause. In my mind, it is also an awareness tool that demonstrates how you and I can contribute our little something to Mother Nature. It is to be seen how the entire chain will come together to define the value proposition to the consumer.

In the next part of this series, I will talk about why the utilities companies will want to implement smart energy.

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Posted by Vijay Nagarajan at 9:48 AM 1 comments  

Smart Energy - FAQ Part 2

Wednesday, July 2, 2008

I recently started this Frequently Asked Questions series on Smart Energy. Here is the second part of the series -

4. How does the energy company communicate with the user?

There are two main components that help the energy company achieve its objectives.

Smart energy gateway: This is typically connected to your broadband connection and serves as an access point for the energy companies to talk to you. In the future, we may have carriers providing zigbee-enabled gateways for the user to have a single device that provides broadband also communicates with your energy company.

In-house Display: This is essentially the smart-energy equivalent of a mobile phone. This wireless device can be a kitchen-top device or a device attached to your refrigerator. The gateway can communicate raw data to the device which can process and provide information for the consumer to assimilate. Examples of such information include peak hours, rates, usage, usage projections etc.

5. How are the devices controlled?

A rudimentary model would be to assume that once the information is provided, the user will use his discretion to manually turn off devices. A more advanced model would be to provide control features in the display either through buttons or touch-screens. The control information is the stimulus for the gateway to communicate with the intelligent or smart devices installed in your house.

6. That is in-house control. How about remote control?

This is where the usage model gets more interesting. The energy company may use the back-end platform it uses to communicate through the gateway to perform a multitude of other functions. The most logical thing to do is to provide a web interface through which the user can monitor the information passed on to the display. Additionally, he/she can also control the actions of the gateway. Hence you have a remote monitor and control mechanism in place.

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Posted by Vijay Nagarajan at 4:16 PM 0 comments  

Infineon - Future and Strategy

Tuesday, July 1, 2008

[Originally for Sramana Mitra's site]

Over the past two weeks, we have looked at Infineon’s financials and various business units. Before we proceed to its valuation, it will be useful to examine the company’s key strategic initiatives and growth possibilities if we exclude Qimonda from the picture.

Infineon states its strategic objectives clearly in its 2007 annual report. The company hopes to leverage its strength in energy efficiency and security to remain a semiconductor leader. It sees the growing need for mobility and communications as the drivers for its own growth. As the company is betting on mobile phones and broadband customer premises equipment markets, it recognizes the need to make strategic acquisitions to strengthen these segments.

The company also opts for a mixed manufacturing model. The German chipmaker wishes to retain control over process technologies for RF, power, embedded flash and others that it considers its traditional strengths. For standard CMOS processes, however, it will engage in long-term strategic partnerships with other companies while extensively using the services of silicon foundries.

I see a lot of positives in the company’s strategic plan. Its focus on strengths such as energy efficiency and its choice of an optimal manufacturing strategy are especially commendable. Given its portfolio, the mobile and the carrier markets are obvious growth drivers. Infineon, however, needs to take care as it is pitted against most other semiconductor leaders in these markets, including TI, Qualcomm, Broadcom and STM. Also, while it is certainly a leader in low-power technology and system integration, the competition is rapidly narrowing the gap given the increased thrust towards mobility and convergence.

It also appears that with Ziebart’s exit as CEO, Infineon’s strategy of making small but solid acquisitions may change. I am guessing that the company will now engage in larger M&A activities to gain scale, much along the lines of STM’s recent move to get NXP’s wireless business. The prime candidate being discussed is NXP. An Infineon-NXP merger would create an automobile and industrial semiconductor juggernaut.

With regards to wireless, Infineon’s acquisition of LSI’s mobility business was well motivated: LSI not only offered a sustained baseband program but also brought in substantial 3G IP from Agere to Infineon. Still, as I mentioned in the previous piece, Infineon lacks a full product portfolio to build a complete mobile platform.

This is where a merger with Freescale becomes a viable option. Freescale has its own baseband solutions for UMTS, EDGE and GSM/GPRS. More importantly, it not only has application processor capabilities, but it also delivered the industry’s first single-core modem architecture and has already embarked on long-term evolution (LTE) development. The complementary R&D that Freescale can add to Infineon’s low-power strength can, in my mind, create a powerful mobile wireless entity.

While these are good synergies, the two companies still do not have a complete connectivity portfolio between them. Infineon will probably need to follow a hybrid acquisition strategy, combining the merits of Ziebart’s philosophy while going for scale through Freescale and/or NXP. The company should perhaps go for small acquisitions or long-term strategic partnerships for connectivity solutions to secure and grow its mobile market share.

I also think that with its unique strengths in energy efficiency and low-power electronics, Infineon should look actively into Zigbee and smart energy systems as a diversification area. I believe that smart energy is a burgeoning industry and Infineon, among the semiconductor giants, is best positioned to exploit this growth.

In this post I have looked at various strategic directions and initiatives for Infineon. I have also put forth my vision for the company. With this thorough analysis behind us, we turn to the company’s valuation in the concluding part of this series.




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Posted by Vijay Nagarajan at 12:20 PM 2 comments  

Smart Energy - FAQ Part 1

I have so far in this blog talked extensively about the mobile wireless space. Mobile wireless is very near my heart since my engineering specialization is in this field. Of late, there is one other industry that has caught my attention – Energy management and smart energy. So, I have put together a FAQ for the ‘smart’ reader that I will publish over several parts.

1. What is energy management?

Energy management is the concept that allows residential and business consumers to monitor and control the way their electrical appliances are used. The control mechanism may be in-house or remote-platform based.

2. Why would we need to control electrical appliances?

There are several reasons we want to be able to do this. Firstly, as responsible citizens of this world, we ought to give Mother Earth the respect she duly deserves. As we strive to go ‘green’, we should collectively work towards energy efficiency. Where else to begin this but at your home? Like someone said, ‘Charity begins at your home.’

Secondly, the energy companies are perennially running out of capacity and we are hit by power outages. Not only is the population growing, but the per-capita consumption of energy is also increasing by the day. The power companies are trying to device a more efficient, graceful strategy. If they can have nominal electrical usage per household, then such outages can be avoided or at least reduced. One scheme that the power companies are toying with is the idea of differential rates during peak hours. If the energy company communicates peak hour information to the user, this will encourage him/her to turn off electrical appliances that are unnecessarily running during those times.

Thirdly, there is the luxury angle. How many of us would like to have our house temperature right when we step in after an exhaustive work day? Or would you not like the A/C or the heater to fall back to a nominal temperature when you are not around?

3. How is the intelligence built into electrical appliances?

The smartness can come from several short-range communication mechanisms. A good emerging example is the use of Zigbee which is a short-range radio communication standard being promoted for home networking. Once your thermostat is equipped with a zigbee radio, it can be controlled by a central device which will also be zigbee-enabled. Suppose you have set a timer in this central device to turn off you’re A/C at 8AM when you step out of the house, zigbee signals are sent out to the A/C at the right time to enable this automation.

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Posted by Vijay Nagarajan at 9:08 AM 0 comments