Since last year, these trends have continued to gain momentum and have magnified in their importance. The continued convergence of these trends is creating demand for new applications that often combine multiple technologies and require expertise in multiple markets. We believe Freescale is uniquely positioned to address this growing demand by leveraging our leadership positions in automotive, networking and RF communications.

The Net effect
The proliferation of social networking and user-generated content combined with the impact of broadband and constant connectivity is creating new social communities and new business and consumer behaviors around the world. In the recent years, the growing availability of high-speed Internet access and search technology usergenerated content has become one of the dominant forms of global media. User-generated video and video-sharing sites are among the fastest growing social networking categories. Total worldwide revenue for usergenerated content is expected to exceed $4 billion by 2012.

Increasing pressure on margins and declining prices for mobile voice services are making network operators seek a host of value-added, non-voice services from text messaging to email to mobile TV and gaming. In 2007, non-voice services were just under 19 percent of worldwide mobile services revenue and some analysts predict this figure will grow to over 25 percent by 2012. Research has shown that mobile TV is the number one non-voice service that users want on their phone.

The challenge facing operators is that large video packets slow other voice and data traffic on existing 3G networks. LTE, or Long-Term Evolution, will enable high-speed data rates over cellular networks that rival current fixed wireless and wired standards, opening up a new world of possibilities in the cellular market. With LTE, consumers will be able to access all types of multimedia services and applications, but with true mobility. LTE offers data transfer rates that are 50 times greater than the currently deployed 3G networks.

As of today, Freescale is the only semiconductor company to publicly demonstrate working LTE technology in both handset and network platforms. We expect to be in field trials with cellular infrastructure providers in early 2009, and field deployment shortly thereafter in selected markets.

We believe that the ability to offer these compelling multimedia services over fast networks will have profound effects on our daily lives and the way we do business. The increasing performance demands for user-generated multimedia content will continue to put pressure on network resources worldwide.

Earlier this year, we announced our new QorIQ (Core-IQ) multicore platform to address this new era in networking. Our QorIQ communications platform brings to market multicore technology that takes system performance, power efficiency and programmability to a new level. And as we enter this new era of networking, we will continue to leverage our long heritage in embedded processing.

Freescale pioneered the communications processor market when we created the first PowerQUICC processor. Along the way, Freescale has shipped 250 million communications processor units and expanded our portfolio to integrate security, QUICC Engine technology, and dual Power Architecture cores. We are leveraging many of our existing as well as new innovations in our QorIQ communications platforms.

Our goal is to harness superior performance, power-efficiency and programmability to empower your applications and to enable you to easily migrate to multicore, when and where you need it. So far, programming of multicore processors has been the biggest hurdle to market adoption. From the outset, we understood that multicore implementation is not just about great hardware, it has to focus on the software and the developer’s experience.

To help in this effort, last month we completed our acquisition of Intoto, a leading provider of software platform products for multicore networking and communications applications.

We also have worked closely with our ecosystem partners so that developers can fully utilize the cores and resources, as well as debug the complex on-chip interactions. You can see our new, powerful multicore debug tools, software, operating system and networking stack deployment in the Tech Lab here today.

Health and safety
The global population is aging. For the first time in history, people age 65 and over will outnumber children under the age of five. Life expectancy is increasing, and new economic challenges are emerging. Current methods of housing and caring for the senior members of our society will not scale. We will need to find new solutions, and those solutions will be based on semiconductor technology.