Dolby tries to create big sound for smaller devices; tablets and smartphones
As mobile technology continues to develop at a fast pace, with consumers expecting their cell phones to have more functions, Dolby Laboratories (NYSE: DLB) is working on a number of new products in order to outfit mobile devices like tablets and cell phones with audio technology previously only found in movie theaters.
At the 2011 Mobile World Conference, held in Barcelona in February, Dolby showcased the latest handsets that support surround sound technology, most notably the new Nokia E7 mobile phone. With an audio output that integrates Dolby Digital Plus surround sound, the Nokia E7 will be marketed to audiophiles who not only use their phones to stream content and listen to music, but desire a level of audio quality not generally found in mobile phones.
Speaking at the conference, Andreas Spechtler, Regional Vice President at Dolby, said, “We are delighted that the industry is embracing the opportunity to provide mobile users with a premium HD experience. We have made significant progress in helping manufacturers and operators change the way that people feel about their entertainment on the go, as they demand a rich, high-definition audio experience without compromise.”
Partnerships extend beyond Nokia to LG, HTC, Acer, Fujitsu and ZTE. By developing audio technology for a large number of cell phones and tablets, Dolby is stepping into its competitors’ territory, namely Sony Corp., which focuses on products outside of just audio technology. Sony televisions and cell phones are equipped with Sony sound. With the upcoming release of the Sony Ericsson Xperia phone, which also functions like a hand-held Playstation, as well as a slew of other Sony mobile devices, like hotly anticipated S1 Playstation tablet, Dolby is attempting to keep pace by making its mobile technology widespread.
Spending nearly 10 percent of its total revenue of research and development – or $89.5 million – for the fiscal year 2010 that ended Sept. 30, Dolby is not allocating more money towards development than it has in the past. However, while technology is still being developed for cinema sound and home entertainment systems, a significant portion of these research and development funds is now going towards developing audio for mobile products even beyond surround sound audio outputs.
Kerry Rice, an analyst at Wedbush Securities, said, “It is absolutely worthwhile for Dolby to expand into the mobile market, especially when you just think about the number of tablets and smartphones around. The first thing to consider is the sheer unit volume – this is a huge market. Additionally, the popularity of the tablet is because it is primarily a media consumption device, and that is exactly where Dolby fits in.”
Dolby has been gradually introducing technology geared towards mobile products over the last few years. Dolby Pulse, which produces higher quality audio over limited bit rates, and Dolby Mobile, which enables surround sound quality audio in phones and tablets, have both been integrated into many mobile devices in the past two years. Dolby Axon, technology that enables surround sound and clear voice commands regardless of the environment, has been implemented in PCs and online gaming consoles, but it is currently being developed for mobile devices as well.
At this year’s Mobile World Conference, Dolby unveiled an updated Dolby Mobile, which is a post-processing technology, meaning that regardless of how original content was mixed and produced, the audio will be elevated to Dolby quality. The ZTE Light Tab, ZTE’s newest tablet, is the first to be equipped with the new Dolby Voice, technology that allows for clearly recognized voice commands regardless of the user’s surrounding environment. It will be priced around $500, equivalent to other tablets on the market.
However, in a world of iPads and the occasional Galaxy Tab or Xoom, Dolby’s foray into mobile audio technology may or may not significantly impact its competitors.
Rice said, “I think all of Dolby’s competitors are gunning for this market. Dolby has the best brand recognition, though, and if Dolby can get a majority of that market quickly, it can effectively lock out their competitors.”
Rice pointed out, “There are currently only a couple of tablets with Dolby technology today, with several dozen to hit the market in 2011. It’s still early in the game so we’ll have to see about the winners and losers, but Dolby has the opportunity to be a dominant player in the tablet and mobile market.”
Regardless of Dolby’s potential competitive edge, industry experts say, the introduction of multiple mobile audio technologies mean that high-definition audio will soon become a standard in the mobile industry.