Smith Barney Citigroup on WCDMA
A post by lastchoice on IHub's IDCC board:
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Posted by: lastchoice
Date:9/21/2004
Post #79892 of 79955
Asia Handset Tour:
Smith Barney Citigroup
NOK CDMA Chipsets - We asked Samsung about the likelihood of dual sourcing CDMA chipsets from the TI/NOK/STM trifecta, the only other solution available besides the Qualcomm chipset. Management said that they would still be paying royalties to Qualcomm with either chipset, and that the cost of the TI/NOK/STM solution is about $2 cheaper. However, the $2 BOM cost savings per handset is not worth the risk of any potential quality problems, nor is it worth the risk of potentially damaging Samsung's relationship with Qualcomm. In closing this issue, management said that they will not use the TI/NOK/STM solution anytime soon.
WCDMA Expectations: Samsung
Samsung expects WCDMA to total about 3% of market volume in 2004, or about 18-19 million units. For 2005 Samsung expects this should grow to 5-10% of market volume, or about 32-65 million units. This is a particularly wide range (no pun intended) for WCDMA unit growth next year, primarily because various carrier rollouts of WCDMA may or may not proceed according to plan.
Samsung is planning to be very aggressive in WCDMA next year by releasing 20 new WCDMA handset models, up from just three models currently. The company expects primary 3G application drivers to be Video on Demand (VoD) and short video clips of 20 seconds or less, filmed using the on-phone video camera. The company noted that VoD penetration rates in Korea are greater than 50%, compared to less than 1% in the rest of the world. While these application drivers seem uncompelling in our opinion, it is also generally understood that 3G phones have significantly more voice capacity. As such, increased voice capacity is likely to be a primary reason why carriers make the move to WCDMA or CDMA EX-DO.
WCDMA Expectations: LG
LG expects industry-wide WCDMA shipments to total 14
million units in 2004, growing to 40 million units in 2005, and to 90 million
units in 2006. The company estimates that it will ship about 3-4 million WCDMA
handsets in 2004 and about 6-8 million WCDMA handsets in 2005.
LG is currently using a Sony-Ericcson chipset in its WCDMA phones because Qualcomm was a little late in having availability of its WCDMA chips. However, LG plans on transitioning back to the use of Qualcomm chipsets for its 3G phones because LG and Qualcomm have a very, very close relationship. So even though Sony-Ericcson is providing a 3G chipset that works well, it is worth it to LG to move back to Qualcomm to preserve that supplier relationship.
While not citing a specific number, LG management said that it does pay a higher royalty percentage (of the total phone ASP) to Qualcomm on WCDMA than it does on CDMA. This is significant given the higher ASPs per phone on WCDMA versus CDMA. <<
- Eric - |
