USB defines the external interface (physical, electrical, various layers of signalling).
The PHY (physical interface circuitry) that presents USB interfaces also has to interface to the host computer. This is done using a UTMI interface
ULPI is a lower pin-count version of that internal interface. This is beneficial for smaller and lower-cost devices.
Announced on March 1, 2004, the ULPI specification provides a low-pin, low-cost, small form-factor transceiver interface for any USB application
ULPI was developed by a group of USB industry leaders to address the need for low-cost USB and OTG PHYs. Existing specifications including UTMI and UTMI+ were developed primarily for Macrocell (IP) development, and are not optimized for use as an external PHY. Using the existing UTMI+ specification as a starting point, the ULPI working group reduced the number of interface signals to 12 pins, with an optional implementation of 8 pins. The package size of PHY and Link IC’s are drastically reduced. This not only lowers the cost of Link and PHY IC’s, but also makes for a smaller PCB.