Is This Why An AV3 Maybe A Non Starter ?

I seen this on another forum and it may interest some of you I have copied and pasted if that's against the rules then I apologise just now I thought it was well written and an interesting point:

Hi Guys,

This is an interesting subject and whilst I feel a little maligned at some other comments I'll try and give a neutral response.

A modern AV processor is an incredibly complicated unit. It needs to handle switching of audio and video in both the analogue and digital domains. It needs to provide powerful DSP to decode and process these signals. It also needs to convert digital signals back to analogue and apply volume control.

On top of this many companies complicate things even further by attempting to build vdeo processing in to their products.

In the past it was possible for smaller companies to offer products in this sector because they could do analogue very well, there were very limited digital requirements and royalties for features like Dolby Pro Logic were managable. In the digital area it is important to remember that SPDIF is an almost 30 year old technology now so it is a long time since there was a lot of complicated development in this area. There were no fancy auto setup options or other complications.

This situation pretty much lasted up until about 4 or 5 years ago. I have a Pioneer 2011 receiver in my home that I purchased in 2004. This unit supports DD, DTS, has a number of decoding/dsp options, rudimentary auto setup and analogue only video switching with no video processing. Although for all that, the unit plays back DTS tracks 7dB lower in the left front channel than the right and I never saw that in any review at the time...

The change coincided with the appearance of HDMI. Suddenly the whole comfortable paradigm of producing these devices changed and you had this combined audio and video interface with a horrible protection scheme. Suddenly the digital design element became orders of magnitude more complex and since that really defined your device - more important.

As we all know, the first HDMI devices were grossly unreliable. HDCP caused no end of problems but the interfaces were rampant with bugs in the audio and video. I am certain that a number of companies at that time took one look at decided not to touch it until the problems were all sorted. Mutliple HDMI revs later we still have a ton of problems with HDCP but at least the gross errors seem to be pretty well worked out.

On top of this you were faced with another problem if you unwisely decided to do video processing at this time. A number of companies started to use the HQV Realta chip in their devices. This massively expensive part promises awesome performance but working with it was a nightmare beyond belief. Even buying this in on an Silicon Optix platform did not isolate at all from the software development requirement. The API for this piece was massive and impregnable and support was supplied by only a small team who ultimately relied on one Russian genius to explain the intricacies of how it worked. One of the companies we worked with tried using Realta to make a dedicated VP device. Even with a large team of PHD level engineers working only on the video side for 20 months they couldn't get performance to match what the device is capable of and programming difficulty was the single root cause. One of the biggest differences between Realta and Reon is that Reon actually has a decent interface for the engineers!

The final nail in the cofin for small companies was the emergence of sophisticated auto setup routines like YPAO, MCACC or third party solutions like Audyssey.

A small company can't afford the level of investment and long term research to develop such a system themselves but building in a unit like Audyssey requires ever more powerful DSPs to be employed and a per unit license fee that must be paid.

So you arrive at the situation we are at now, the development complexity is several orders of magnitude beyond where we were even 5 years ago. This brings commensurate increase in non recurring engineering costs especially in digital design, software development and product testing. Finally your design now includes a huge amount of SMT devices, multi layer circuit boards and more all of which wraps up to a massively complex build that means you have to start using contract manufacturers who never match the quality promises they give in the bid stage.

All of this comes at a time of economic uncertainty and falling retail prices driven by the aggressive developments from the far eastern companies.

So you have a huge risk in you NRE costs, falling margins, reliance on third party manufacturing and the voracious appetite of Joe public for new badges on the front panel regardless on sound performance improvements.

In the face of this it is pretty hard to see why any responsible CFO would sanction the development of an HD ready AV processor. We have already seen one venerable British company risk it all on HDMI devices and they are now on their knees with no obvious escape route.

The rest have looked at other areas where those NRE and licensing costs are much less and profit margins have not been eroded. That means relatively high end music systems and is a trend that can be seen easily by looking at their product lines.

Just my thoughts of course.
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Neil Davidson
Genesis Technologies