Apple (s aapl), with the introduction of the iPhone, upended the world of user experience with the device’s multitouch technologies. To be sure, Apple’s iPhone wasn’t the first to use touch technologies, but it put them to such good use that it’s since become de riguer to use touch in cellphones and other connected devices.
I’ve been fascinated by the touch revolution and have often wondered who will win from this big shift. The answer came to me this morning via Ashok Kumar, an analyst with Northeast Securities. In a research note, titled Cypress Semiconductor in Pole Position for the Next-Generation Touchscreens, Kumar writes:
Our checks indicate that Cypress has captured bulk of the new design wins for multi touch capacitive smart phones. The differentiating attributes include higher level of functionality, attractive cost, lower power consumption and a tightly integrated software stack. Based on current design activity, we expect Cypress to displace Synaptics and become the dominant supplier of touch screen chip solutions in 2010.
I was especially intrigued because Cypress (s cy) is among the chip companies I’ve barely thought about since I stopped actively covering the space some seven years ago. So before heading out to Le Web here in Paris, I called Kumar to learn more.
He explained to me that Cypress had just introduced a new class of chips called Trutouch, which are going to help accelerate the shift from the module-based design approach to touchscreens made popular by Synaptics to a more chip-centric design approach. What differentiates Cypress is the software, which has allowed the company to sign up pretty much all the major cell phone makers as potential customers. The software inside Cypress’ chips makes the touchscreens more sensitive and provides more tactile feedback, and would turn most phones into good touch devices with higher functionality. For instance, Samsung is going to use these chips in its Omnia line-up of phones, while LG is looking to incorporate them in its Arena and Chocolate phones. Nokia (s NOK) is another likely customer, perhaps by the summer of 2010. Even Palm (s palm) and RIM (s rimm) are using Cypress’s products. As Kumar’s wrote in his note:
Samsung and LG are expected to shift their high end smart phone touch screen chip designs to Cypress based solutions. We also expect Cypress to increase its footprint at Nokia and Motorola at the expense of Synaptics and Atmel respectively.
That would leave Apple as a holdout. But since Apple uses Broadcom (s bcrm) chips that run its own proprietary software (which remains unmatched), Cypress doesn’t have much of a chance with the Counts of Cupertino. Bottom line: Touch might revive Cypress’ fortunes, but in the end the big winners are going to be consumers, who will get phones with higher touch capabilities. Of course, I’m already wondering what Apple will do next in order to stay miles ahead of its competitors and further the touch paradigm.
Image of LG Chocolate courtesy of Verizon