NXP Semiconductors N.V. (NXPI) Earnings Call Transcript & Summary

Good morning. Thanks for joining. I'm Blayne Curtis, semiconductor analyst at Barclays. Very happy to be hosting NXP's teach-in on UWB. A very successful teach-in on [ BMS ] and radar, and I'm sure you'll find this one interesting as well. From the company, we have Rafael Sotomayor, who's EVP and GM of Connectivity and Security; we also have Jens Hinrichsen, who's the EVP and GM of Advanced Analog Group; we also have Jeff Palmer, who all you know, I'm sure, VP of Investor Relations. Before I turn it over to Jeff, just -- there should be a link that you can ask questions. I'm going to be moderating the fireside, so please shoot those to me. You can also just e-mail me directly or send me a Bloomberg as well, all of those works, and I'll try to fit them in to the questions that I was going to ask. But with that, I'll turn it over to you, Jeff.

Great. Thank you, Blayne, and good day to everyone on the call. I'd like to welcome you to the third installment of the NXP teach-in series. As Blayne mentioned, today, we will present an overview of the nascent but exciting ultra-wideband ranging market and what we view as NXP's unique opportunity. This call is being recorded with a replay along with the associated slides will be available on the NXP IR website within 24 hours. Please be aware today's call will include forward-looking statements that involve risks and uncertainties that could cause NXP's results to differ materially from management's current expectations. These risks and uncertainties include, but are not limited to, statements regarding the evolution of the ultra-wideband market, the sale of new and existing ultra-wideband products and our expectations for long-term revenue growth in the ultra-wideband market. For more information on forward-looking statements and a more complete description of these risks and uncertainties, please refer to the slide titled forward-looking statements in the associated slides as well as the risk factors listed in our SEC filings, copies of which are available on the NXP IR website. Please be reminded that NXP undertakes no obligation to revise or update publicly any forward-looking statement. And with that, I'm going to pass it over to Rafael.

Thank you, Jeff. Good morning, everyone. Welcome to our UWB session. My name is, like he said, is Rafael Sotomayor. I'm the GM of Connectivity and Security here at NXP. And we're going to spend the next 20 minutes explaining why we are so excited about UWB. And I hope by the end of the session, you're convinced on the merits, of the use cases of the merits of the technology, the speed of the technology adoption and the leadership position that NXP is taking and driving this ecosystem. So let's jump into it. UWB is not -- and the way you got to be thinking about it, UWB is not yet another wireless technology that is used to push bits back and forth of information. It doesn't compete with WiFi, it doesn't compete with Bluetooth, it's not trying to replace an incumbent technology. It solves a problem that is currently unsolved. And that problem is knowing the relative position of an object with enough accuracy to matter. And emphasis is on accuracy. Objects need that accuracy to make decisions, to take actions to react. Now once you have an accurate position information, then all sorts of interesting use cases become possible. Use cases today are not possible, right? Think about how our PC could react to the presence of an authorized user, to unlock and lock the computer. The TV can preprogram itself, right, once it senses you to your favorite channels. Music will follow you room to room. Or your door lock will let you in, right? All these use cases are use cases where objects are able to anticipate our actions. It's like -- and the reason we're excited about this use case is like the closest thing, from a technology perspective, that we can give objects to give them intuition. Now from a technology perspective itself, it's very well suited for this -- to this sensing use case. One, it has unmatched accuracy. And it has an unmatched accuracy and robustness in very difficult environments, environments where there are interference such walls, a lot of reflections, RF blockers. And what it means is that it's not only accurate, but it's accurate all the time, it's very resilient to the environment. And I want you to remember this because this is one of the key attributes when we compare UWB against other technologies that trying to do similar things in terms of range. Now for some reason, also, there is a misunderstanding that UWB is short range. And it is not, right? It provides a range that is more than sufficient for all the use cases that we're going to be talking today. Now another attribute that is a very strong attribute that we see is security, because it was built -- security was built within the technology from the beginning. Now like other technologies like Bluetooth or WiFi, UWB has encryption of data payload. But unlike other technologies, it adds RF security. And we are trying to get too geeky here, right? What this means is the preamble, which is the sequence of bits that is used to synchronize the transmission packet, that is encrypted with a unique key, which is different for every ranging measurement. Essentially, what it means is every measurement is protected with a unique crypto key. And then the last attribute here is it has low latency. Any mix of technology suitable for use cases where this is important, like gaming or augmented reality. So now when you put it all together, you see why the technology is so attractive. Why the technology is being adopted. We consider all these metrics key to make the technology viable for the use case. Now let's transition now from the technology attributes here to how these are driving the adoption. Now let's just put it in perspective here. When the automotive industry adopts a technology, it's usually very well vetted. It's not a one-off decision they're making. It's a decision that will be generational. And then for mobile, to add another RF and get another antenna, it's a big deal. And it will not happen unless it delivers a big value to the consumer. So what is happening today with UWB in many ways resembles what happened in the early days of Bluetooth here, circa, I'll say, 2002, and I'm showing a little bit my age here. Back then, when mobile and auto were the main drivers for that technology deployment. Now today, if you look at today what's happening with UWB, the killer application and the main reason for UWB deployment is mobile secure car access. It's a mobile secure car access. I mean if you look at it for me, this is deja vu, where I see, yet again, the value proposition of the technology, this early technology, to overcome that inertia of adopting a new technology with their very limited ecosystem. It happened back then with Bluetooth, and it happens -- it's happening today with UWB. Now UWB is already on its own right, a great access technology for automotive. It solves the relay attack problem we have, the man in the middle. It has all the great technical attributes that we discussed in the previous slide. But once UWB makes it on the phone, then you add a new dimension. UWB on the phone, and you can now digitize the key like we digitize credit cards and access cars in a mobile wallet today. And then the digital key is much more than what your keys are, right? It provides a new way for the owner to define access rules of the vehicle, right? Who can use the vehicle, when they can use it, where it can be operated? The vehicle is also able to authenticate through UWB, the user and locate the user and provide a unique experience for that user. So it's able to personalize the user experience for that user. So you can see now that the initial killer app that is driving UWB adoption is a mobile-driven secure car access. Now once it makes to the phone, it becomes a free resource. And it triggers adoption in IoT nodes and it generates new use cases. The way to think about it, you can actually track objects, as simple as that, finding your ear buds, your keys, finding your wife in a crowded supermarket, but objects can also track you, and they can customize a service or the user experience by just knowing that you're there. Objects can track other objects, right? Think about the room, but finding the charging station even if you moved it. Or a multi-speaker system can self-organize themselves into different configurations by detecting other speakers. We also have secure access beyond auto, buildings, homes. In Japan, we also have a customer looking at UWB for micro-payments. Now all these are use cases that our customers are currently evaluating. These are not use cases creating a lock key. Now when we look at the genesis of the technology, right, this is not necessarily a genesis, this is not a technology that came out of nowhere. When we started working on a solution for our mobile -- for a mobile-driven smart car access, and this is how we started. From the beginning, we did it with our partners. We did it with the support of industry leaders who had a vested interest and the co-creation of the solution. So we focus on developing a solution that was open, it was interoperable, that had a chance of wide industry support. We also started working on standardization, worked on IEEE and contribute a lot into enhancements to add improvements for ranging, which became the 802.15.4z that you see there in 2018. We cofounded the FiRa Consortium, FiRa stands for fine ranging, to drive the industry-wide interoperability of UWB applications. And we also work on the CCC, which is the Car Connectivity Consortium, to make sure that UWB was a key technology for the car access road map. So you can see that all these pieces need to come together in order to develop that ecosystem. While all this was happening, we also worked with our customers, with both mobile and automotive to make sure that we could launch products on time. And Samsung Galaxy Note 20 was the first product in the market with NXP UWB technology. You should expect more announcements in 2021 for both auto and mobile customers. And one thing to remember is we're at both sides of this use case, right, both in mobile and in auto. And we're making sure that this initial deployment, additional phase of UWB adopt deployment, which centers around mobile secure car access is successful. Now ubiquity is not a requirement for a healthy ecosystem, but develop -- but quickly creating an installed base of UWB devices is key. And the reason we're bullish is that we think that we will -- this will indeed happen quickly. Remember, we said mobile is the seeding platform, and this drives applications in auto, which eventually leads to adoption in IoT by access or control use cases. As more devices get deployed, it creates obviously virtual cycle that we have on ecosystem development. If you're looking at the cumulative adoption that you have curve here, that you have on the right, we estimate by the end of 2021, there will be UWB phones in the market for multiple Android OEMs. By then, you will have 2 generations of iOS devices in the market. And let's not forget, these mobile OEMs also play a big role in smartphone devices. And they are working on creating products, which will support UWB to interface and interact with their phones. And by 2022, we do anticipate this early launches of IoT will enable about 100 million of these devices in the market, ranging from tractors, fabs, door locks and many more. By second half of 2021 and throughout 2023, we also see UWB deployments in automotive. And you will see the first automotive models come to market. And this will -- and our opinion will affirm the technology. Again, it is important to understand that, while secure car access is the initial killer app, right, the design to revenue cycle, the differences that we have between mobile and auto are quite different. And it will result in what it would be perceived an adoption cycle is different from one another. And it will be phased over time. But this is the reason why you see the early deployments UWB happening on mobile. Now we talked about how important it is for the health of the ecosystem to create this installed base. And an answer to this challenge is TRIMENSION. TRIMENSION is the brand name for our UWB product family, that addresses these 3 verticals that we consider critical to trigger the development of the UWB ecosystem. Now we've done this before in terms of ecosystem development. We've done it with NFC, we did it with my MIFARE. The way we see it, this isn't about removing objections, it's about lowering the cost of adoption by being, in a way, a matchmaker. So with the TRIMENSION family, we created products with different technical attributes, they are fit for purpose. The mobile phone products are different than the auto products. And they're different than the IoT products. They all share a common IP. They all share a software infrastructure to ensure that all these 3 branches interoperate with one another. But this is one of the main reasons for some of our customers like Samsung has peace of mind that even in the early phases of the UWB deployment here with NXP, interoperability is not going to be an issue. We have publicly announced that Samsung is using our NXP UWB in their phones. We also have many Tier 1 automakers have announced their plans to use UWB technology in future car models, and they're working with NXP. We have ASSA ABLOY and HID also using NXP UWB products for their secure access, both in industrial and home. And by the way, this is just a few of the participants in the industry who are helping us using our products to drive the adoption of UWB. So what does this all mean from a business perspective? We expect the UWB SAM to reflect a pretty healthy growth rate over the next 3 years, about 40% CAGR. We expect the SAM to reach north of $800 million by 2023. And on the mobile side, it's a big part, obviously, of the market. IoT starts to become -- I think industrial starts to become material some time in 2022. Now because the way -- because of our understanding, how do we enable these in ecosystems across multiple end markets and multiple customers, we do anticipate our UWB revenue that will be in the range of $300 million to $400 million by 2023. We have this traction in the different -- the 3 segments that we talk about, industrial and IoT, mobile and automotive. And we have underpinned by a lot of these designs, especially in auto, underpinned by customer designs but by commitments. And that gives us confidence that the target is reasonable. We expect the first cars equipped with UWB to come in second half of 2021. Again, we talked about it. The killer app for UWB adoption is secure car access. And as most of you know, NXP is the leader in secure car access, over 20 years of experience. And obviously, we are the natural go-to partner -- go-to partner for all car OEMs customers to work with us to evolve the technology towards UWB. We talked about the auto industry supports UWB because, one, it solves a relay attack issue, this is a man in the middle can pick up the signal from the fob and get access to the vehicle, so UWB is very robust and has got very strong security attributes. It is as robust in terms of performance as passive keyless entry, so you're not giving anything up compared to the old technology. And it also improves over the location accuracy of solutions that today are using BLE. And on top of that, it's present on the phone. So the addition of UWB into the car access, the way you got to look at it, is it involves a deep system knowledge and application expertise. You have multiple UWB anchors on the car to ensure a precise location of that virtual key on the phone. You have BLE to ensure the data communication link in the pairing. You have a secure element that is needed to store the digital key. You have NFC as a backup. When the phone runs out of battery, NFC is in all the doorhandles. So the way you got to look at it in the auto, UWB even though it's a very critical piece, it's a critical piece in a bigger system. And NXP, based on the position that we have in this segment is in a unique position to offer a complete system, chipset, software, security outlets and deliver a fully validated system. At this point, we have close to $500 million of confirmed design wins across 9 OEMs, and we're engaged with another 10 Tier 1 customers to the approval concepts for their future -- I would say, future car access. And we are here, NXP is a true leader of providing the evolution of the secure car access to the next level you see in UWB. Now to conclude, and just trying to -- tying all this together. NXP is uniquely positioned to drive UWB leadership across the 3 main ecosystems that we talked about: mobile, auto and industrial and IoT. Our market position gives us unrivaled access to our customers, right? They themselves are leaders in their industry. And this access allows us to co-create use cases to develop deep solution expertise. We are able also to match the timing of our technical innovations in UWB with their market needs in terms of timing and the market needs in terms of deployment. We consider that this customer intimacy, it allows us to customer's road map for these 3 markets like no other company. And we believe this is the reason why this position will drive material revenue by 2023. Thank you. That concludes my presentation. I'll pass it to you, Jay -- or Blayne?

Thanks, Rafael. Yes, it's Blayne. I'll take over. The -- maybe just from a very high level, just on the technology. You mentioned distance in the very beginning of your presentation, UWB operates like 6, 8 gigahertz, so quite high versus some other technologies like WiFi or Bluetooth. I have heard some players in Bluetooth talk about this is a niche and smaller distance technology. Can you just kind of talk about why is -- the range of UWB, and is there any puts and takes in terms of operating at that frequency?

No. I mean this is not a concern. Actually, we had tested products with our customers where we're getting even longer ranges. Operates -- and so but the concern that saying there's no propagation -- there's not a good propagation of those ranges is just simply not correct. Transmit output power that we have and the fact that we are -- we are using 500 megahertz channels, actually, it allows us to actually not only get the range but get also the accuracy. So let's not forget it, just the range is maintaining the accuracy of the measurement over that range.

Got you. And then maybe just following on that in terms of positioning. You can use WiFi and Bluetooth. I think there's some location functionality. Can you maybe just describe the difference between the existing technologies and what this adds?

Yes. I think that the concept of having doing measurements based on time of flight that are not necessarily unique to UWB. But there are constraints with Bluetooth. There are constraints with WiFi with respect to the bandwidth they use, the channels they use and the accuracy. Just to begin with the current technologies don't even get -- not even close to the accuracy UWB delivers today. And that's the reason why the use case is not being exploited by the existing infrastructure. And the other problem is just -- it's just not -- it doesn't -- also doesn't give you the accuracy under normal daily life conditions, right? You don't know what the environment is going to be, and you can't have a product that gives you 2, 3, 4 meters of accuracy, or gives you 50 centimeters of accuracy under perfect conditions. You can't operate in a world where the accuracy varies depending on the environment. So it's not just that the accuracy is there, is the accuracy all the time. And that's the difference in UWB. And that's actually why the UWB is being adopted. That's the main reason, it's just the robustness of the accuracy of the measurement.

Got you. And then maybe just talk on the competitive landscape. Apple's got their own radio, Qorvo bought Decawave, a radio as well, I believe. And I think there's multiple components here beyond the UW radio, you have the security element, you have NFC capabilities, which is complementary, auto supply chains. Can you just walk us through that? And then as you look out, do you expect other players into the market as well?

Well, when there's a market, there's competition, right? So that's -- and competition is healthy in many ways. We feel very good about the position that we have. If you look at where we're coming from, we're coming in a position of strength with respect to our customers and where this position -- this technology being positioned. In auto, we're the leaders in car access. And this is where UWB is being deployed through the car access. And so UWB is in the auto side is part of a bigger system. So UWB goes above and beyond just being a UWB radio. In mobile, same goes, right? We start with the position of strength, which comes from the mobile wallet. UWB, we see the UWB as an extension of the mobile wallet. And so the way we look at it, it is -- is not just the UWB play. It's a system play, and UWB is part of that system. So we expect alternative options from our competition. But we feel good where we are, and we're coming and where we're going, we're driving, right? Being at the -- when the customers are spending time on you developing use cases, adopting new technology, at the end of the day, they have limited time to spend it with somebody else, right? And that's what it gives us confidence on where we are with our position in UWB.

And maybe you could just spend a little bit more time on security. You mentioned that the radio transmissions would be secured, I guess, that implies maybe some of the other radio technologies don't, and then just as you're communicating with more devices, you need more passwords stored. So I actually -- when you look at what Apple has, their radio, how do you think about the secure element as kind of an attach rate with UWB? Is this something that will take time? Or is it, the most, will deploy kind of both together right out of the gate, right at the start?

I think the way to look at security is in 2 ways, right? One is the security of the actual transmission and measurement, that of ranging operation that is happening, right? That is inherently secure, right? The fact that I'm able to read -- or not read, but sense, right? The position and the ranging position of an object of interest, and knowing that nobody else can read that position, it's an important attribute. That's the reason why every ranging measurement is encrypted with a unique key and a different key. So that's one aspect. And then you talk about the aspect of actually securing a credential, which in this case, you mentioned is the digital key of the car. The CCC already established how this digital key will be stored in the phone. And that is being stored in the secure element. And it's not just storage, but what execution of that -- the transaction that's happened between the mobile and the car is happening in secure element. So by enforcing a way, by establishing a high level of security, the CCC already established the use of secure element for the mobile secure car access. And so there's 2 ways to think it, one is a digital key, which is being stored and being executed in the secure element in mobile; and then we're talking about the security itself of reading, arranging location of an object. Both of them are incorporated in the system we talked about.

But maybe moving -- go ahead?

No, I was going to ask if that answered the question?

Yes. That's helpful. Maybe moving to autos. You mentioned in your presentation, BMW with Digital Key, you're starting to see Hyundai run commercials as well. I think UWB was an early partner. So I guess some questions here. The initial deployments, I think BMW is talking about all their models kind of starting now. And Hyundai, I think they mentioned at least a few models, it's NFC. So maybe can you just talk about in the auto channel, the difference between NFC and UWB? It seems like the initial deployments are NFC, and kind of how does UWB start to layer in?

Yes. I mean the way I look at it, right, is NFC -- well, the move to digitize the key has started. And so that's the way, start thinking about is that we're digitizing the key in the mobile phone. Today, the ability to use your mobile phone as a key is enabled with NFC. That NFC, is a system, but it's not a hands-free system, right? It requires gesture. It requires you to reach out to that handle and put your phone close to it. UWB is going to be an extension of that system, where you go from adjust your base action, right, where you're just accessing your phone to a complete hands-free user experience. Now you got to think about it, UWB is also beyond access, right? So can't think of UWB just as accessing your car, right? Because the moment you put UWB, yes, yes, it gives you hands-free car access, but also, it gives you a lot more. Because now the car senses where you are relative to the car, whether you're in the back, on the left, on the right. So the way you think about it, UWB, not only gives -- it's an extension to that access, right? But it just makes it hands-free, truly hands-free, but it gives a lot more than that. And so the systems today is just the beginning, and it is the foundation of -- from an infrastructure perspective what's coming with UWB. And it adds very well. It's not a replacement. UWB is just going to be added to that system.

Great. And maybe that follows into my next question. We watched the kind of trickle down of key fobs sort of it showing up at a very high-end model and then kind of work down over many, many years. This NFC, like I mentioned, at BMW, it's the whole lineup. Can you maybe just talk about how you expect UWB, the curve of adoption that you see over the next couple of years? Is it similar to key fobs? Or would it be kind of more like what BMW did across all models right out of the gate?

Well, I think in -- this one, I mean, listen, I have Jens here the GM of auto, and I think that he will give you a different very interesting perspective here. Jens, do you want to kind of give your perspective with respect to the adoption of the technology here?

Yes. Sure. Thank you, Rafael. Blayne, on how we see this, it's actually as you say. So BMW, I think they announced to use the Digital Key first in the 5 Series, right? And then I think Hyundai is announcing it to be used in the Sonata 2020 module. So this is not like we have seen in the very old days back on passive keyless entry introduction that it will be only in this top high-end model of a particular brand. We basically see this rolling out really quickly at the OEMs across all the platforms. So way faster than in passive keyless entry those days back. And actually, this pretty much every OEM at the moment working with us on getting attracted to ultra-wideband. So this is high-end OEMs, high-volume OEMs, everywhere on across the globe. In China, heavily, also even start-ups and the emerging OEMs. So I think it will also a trickle-down effect, like you said, but it will be very faster.

Excellent. In the slide deck, you showed a car with configuration, there was, I think, 4 UWB and then kind of 2 of Bluetooth and NFC and [indiscernible] ECU. Is that -- is there going to be a standardization in terms of how the OEMs choose to deploy? What is the -- the real question is what's the content per car? Will it vary by OEMs? Or will there be a standard kind of configuration that most apply?

So Rafael, if you don't mind, I'll keep on going also on this one here. So I -- basically, the standard on how the communication is done and how also the protocol is done and how the system works is basically defined in the CCC, right? However, at the end, every carmaker is having a bit of freedom on what kind of features and what kind of performance they implement into their particular cars, right? But basically, like also Rafael said, it's really a system based on multiple components, like there are usually 6 to 8 UWB anchors inside, and they are in charge of doing the precise localization of the key, and do also these add-on time-of-flight security protection. Furthermore then, Bluetooth will be there for data communication and pairing and polling. So that will be around usually 1 to 2 Bluetooth nodes. And then you will also see NFC as a backup system in case your phone is out of battery. You want to still get into the car for -- as a backup key for emergency reasons and get it started, right? And the other item is also you have the usually -- but it's not mandated, but usually, you find in the car a secure element for the digital key storage. And if -- this is really a sophisticated system to make the ranging very precise and very sophisticated. There's also a processor needed to do the ranging activity. So in total, this is kind of a complex system, and it depends really on OEM by OEM, how convenient, how precise and how sophisticated they want to do this. But that's usually pretty much it.

Maybe just one clarification. If you just think about this dozen or so chips, is there a way to think about what that equates to a total content number? I'm assuming it's a double-digit number without many chips, but and I know this is a question that makes Jeff uncomfortable, but is there any way to kind dial us in as to what an average content would be?

I think it's a good question, Blayne. And indeed, it is in that range, and seriously, it really varies. And in average, I would say, in average, it's probably in the area of $18 to $20 just for a pure ultra-wideband-based mobile phone access system.

Perfect. And then I got to ask the question. You buy a car today and you get a couple of key fobs, let's fast forward when this is standardized and everybody has in their handsets, what happens to your key fob business long term?

Yes. What we do see at the moment is for -- not nearly all of the OEMs engaging with us on implementing mobile phone car access based on ultra wideband and also other technologies. They basically implement this on top of the classic key system they are having, right? So usually, their car still comes with a key. Most of the cars these days with a passive keyless entry system. And on top of it, they have this feature that you can use the mobile phone digital key access system. So it's really complementary, and it will be -- it will continue that the car will be equipped with really both systems for quite a while. It's typical automotive. Also, if you want to resell the car, it still comes with the key, right? And you can basically -- you can move the car with the key on to the next owner. So that is basically established. In the very longer run, we expect that basically the classic systems will phase out, and it will be only 1 system. But it will be still many years basically both systems, plus there will be also still a certain percentage of cars having these classic keys only. So it will be an evolution, and it will be for a while. And good additional business, and it will continue on a high level. This is how I see it.

Excellent. And then just another on auto. I wanted to ask you on the software ecosystem. You have the CCC consortium. And then there's software ecosystems like, say, Apple CarPlay or car key. And I'm just kind of curious how you -- if you can kind of walk us through what entities are involved and your talking directly to the OEM, but in terms of kind of tracking the different pieces within this ecosystem, can you walk us through their semis? Is there a software layer in between? Who are the players there? And then ultimately, the OEM.

Yes. Well, that's a complex question. In the connected car consortium, there are I think more than 120 members, right? And these are car OEMs, mobile OEMs, but there are also really all kind of ecosystem partners, chip makers. So basically, everybody in the industry is really there, and that's a good thing. So everybody comes together and they align on the standard, right, on a way of working. So therefore, it's really driven out of the mutual interest of all the ecosystem players. And at the end, now on what we see here, is that -- and you see the announcements in the Internet and everywhere, so that there are digital key apps and features presented and launched by mobile OEMs, right? And all the big names, and you referred to a few of them, and then there are a lot of carmakers, pretty much every carmaker also launching and announcing digital key apps in various versions everywhere around. So at the end, and that's the beauty with the CCC, they really ensure that they follow 1 kind of standard and 1 kind of concept. And so that nearly every phone or every phone works with every car. And that's really the beauty on this kind of concept. On our side, also on the ecosystem, what we basically do here is we, of course, like Rafael has said, we provide the entire chipset, right? So all the components we have, we put the firmware on it to make the hardware really work. But then we're also really offering communication and ranging software and even end-to-end security software on top of our hardware levels, so that this is a ready-to-use system. And then the carmakers, basically, they establish their system application software. That's done by the typical Tier 1s or the OEMs. So these are all the players coming together, and the CCC ensures that the hardware and the software, it all works together and is all following certain rules. Hopefully, I could answer your question, Blayne.

It's a good answer to a complex problem. Maybe just finishing on auto, I'm curious, the door access is the killer app, I know there are some other applications, garage doors, payments, and such. I'm just kind of curious how you think about what the kind of the -- beyond door access, what are the next kind of killer app that you're seeing from this auto system?