Forward Concepts Wireless/DSP Newsletter 6/18/2012

 Smartphones are Good Business…at Least for Apple & Samsung

 

Headline-grabbing Nokia is still struggling with massive layoffs looming.  Poor RIM is trying to find its way back.  Sony is clawing back from their Sony-Ericsson misadventure, HTC recently had its stock downgraded by analysts and Motorola's been bought by Google.  Meanwhile ABI says that Samsung and Apple garner 90% of smartphone profits.  It's a tough business.

 

LTE presents the best avenue for long-term smartphone revenue growth.  The main cellular carriers promoting LTE are Verizon Wireless, AT&T and Sprint in the US market, Rogers in Canada, SK Telecom, KT and LG+ in South Korea and NTT DoCoMo in Japan.  LTE mobile broadband services are also available in seven countries in Western Europe.

 

Global demand for LTE smartphones in 2012 is estimated to grow by 275 percent to 26 to 28 million units. Qualcomm's short supply of LTE chips is believed to somewhat throttle this growth and is said to be because of insufficient 28nm foundry capacities and the shortage of LTE chips will not be eased until the fourth quarter of 2012. Samsung, LGE and Motorola are able to supply single-mode LTE basebands used on some LTE smartphones (and tablets), but they have to employ separate 3G modems for fallback.

 

Samsung was the largest vendor of LTE smartphones (albeit employing single-mode LTE modems) in the first quarter of 2012 with a global market share of 59%, followed by Motorola Mobility with 13%, LG with 10.8% and HTC 9.5%. While Android dominates the LTE smartphone segment, Nokia, HTC, and Samsung have launched LTE Windows 7 Mobile Phone models, and Apple and RIM are expected to release comparable models running on their own platforms in the second half of 2012.  Apple, of course has yet to ship an LTE phone, so that's why the iPhone 5 is still the "apple of your eye." (Pun intended)

 

Global LTE Smartphone Shipments in Q1/12 vs. all of 2011

 

LTE Smartphone

Vendor

Total 2011

Shipments

2011

Market

Share

1Q12

Shipments

1Q12

Market

Share

Samsung

3.33

48.1%

3.28

58.9%

Motorola

0.95

13.7%

0.71

12.8%

LG

0.59

8.5%

0.60

10.8%

HTC

1.92

27.8%

0.53

9.5%

Pantech

0.11

1.6%

0.15

2.7%

Fujitsu/Toshiba

0.02

0.3%

0.1

2.4%

NEC

0.00

0.0%

0.1

1.8%

Nokia

0.00

0.0%

0.1

1.1%

Total (M units)

6.92

100%

5.6

100%

 

The most likely new suppliers of multimode LTE baseband chips to alleviate the shortage are Broadcom, Nvidia/Icera, Renesas Mobile and ST-Ericsson.  However, with the time required for those vendors to sample 28nm basebands, have terminal vendors select their products, integrate them into new devices and secure regulatory approvals, 2013 will be the earliest that any of them will be shipping in volume.  And until then Qualcommwill continue to have an almost exclusive run of the multimode LTE market.

 

Overall Semiconductor Market in the Doldrums Now

 

Although there are signs of healthier growth in the cellular business, my colleague and industry veteran Bill Jewell of Semiconductor Intelligence (www.semiconductorintelligence.com) forecasts only 2% overall semiconductor growth this year.  That seems optimistic when compared with the WSTS May forecast of 0.4% growth. So where's the joy?

 

Freescale Gets new CEO

 

Gregg Lowe, formerly Sr.VP of Texas Instruments' Analog Division, is taking over the CEO spot at Freescale Semiconductor.  I met Gregg shortly after TI purchased Burr-Brown in Tucson.  It was convenient for him drop by my office in Phoenix since he had to change planes here anyway to get back to Dallas.  Since then, Gregg has done a masterful job of moving TI into the world's dominant provider of analog and mixed-signal semiconductors.  But, he's not just an analog guy, since he had earlier run TI's microcontroller division.    Gregg takes over from Rich Beyer who has done a very good job of running Freescale, but has decided to retire (probably tiring of being a slave to the investment bankers).  Rich is too young to go off and "smell the flowers," so I wish him well in his next endeavor.  And I'm confident that Gregg will be an asset to Freescale, since it's hard to imagine a more qualified person to take over its leadership.

 

U-blox buys Last Independent LTE Stack House

 

U.K.-based 4MWireless may have been the last company standing in the cellular LTE software stack business (at least for layer 2 and above). Although the transaction occurred in mid-April, little has been in the press about the u-blox purchase. Intel bought up its only direct rival, Egypt-based SysdSoft, about 18 months ago. However, RadiSys and Aricent are offering Layer 2/3 LTE stacks and support for picocells.

 

China Mobile Moving Headlong into C-RAN Acceptance

 

Since China can see that fiber optics gets laid just about anywhere without having to worry about niceties like acquiring "right of way" to run through neighborhoods and people's yards. That gives China Mobile a leg up on Western carriers on implementing Cloud RAN (Radio Access Network).  That's since only fiber can carry high-speed signals from the antenna transceiver to the Cloud computing center, which necessarily has to provide the baseband processing for each antenna.

 

All C-language code will be executed on the X86 processors and the same processors can also act as cloud servers, too.  So, the required baseband DSP doesn't have to be C-code friendly.

 

Intel has announced a joint venture with Huawei to build an interoperability test lab for the deployment of LTE TDD networks. Not only is LTE-TDD favored for cellular in China, it is also the likely successor to WiMAX, a technology that Intel once bet heavily on (to little avail) for the U.S. market. 

 

DSP Group Jumps into Cellphones

 

Long know as the market leader in DECT and cordless phone chips and an early provider of telephone answering devices, DSPG has introduced the DBM11 Noise-Elimination SoC for Mobile Devices. The DBM11 brings together the company's strong voice processing capabilities with technologies acquired from BoneTone Communications

 

This enters a cellphone noise-cancellation chip market currently dominated by Audience, Inc. which has shipped over 100 million chips, including 50 million or more in 2011 alone.  Their cellular phone customers include Samsung (Focus, Captivate, Double time, Note, Nexus One), HTC (Pro2, Titan, Tilt2, Vivid, Surround), LGESharp (FxPlus, Prime) and Pantech. They are also in the Sony Tablet S and HTC Jetstream, among others. Moreover, it appears that the company has also licensed its audio co-processing IP to Apple for the iPhone 4GS and iPhone 5 products.

 

DSPG claims that the new product has already been designed-in by several global device makers and products incorporating the DBM11 are expected to launch in Q1/2013.

 

Shameless Plug

 

We just published a report on thecellular peripheral chip market.  This report is based on our study of Bluetooth, Wi-Fi, Mobile TV, NFC, Touch Controllers, Image Sensors, GPS, FM/AM, HDMI, MEMS, etc. The new study Cellular Handset & TabletPeripheral Chip Trends '12,” is a follow-on to our companion study “Cellular Handset & Tablet Core Chip Trends '12.” published earlier. Together, the two studies cover virtually all cellular terminal chips, their vendors and detailed markets.

 

The growth in sensors has been phenominal as gyro revenues have exceed accelerometers for the first time.  Accelerometers are now at the 100% penetration level in Smartphones and tablets. In 2011, Gyros became the second largest MEMS market after silicon accustical microphones. By 2016, MEMS devices are predicted to be the largest peripheral segment, surpassing touch controllers, image sensors and the combination WLAN (Wi-Fi, BT, FM & GPS) chips.

 

The study profiles virtually all chip vendors and estimates their 2011 market shares and forecasts individual chip types in units, average selling price and revenue through 2016.  Details are at www.fwdconcepts.com/peripherals .