Interesting article on 3G market....
financialweb.com
Culling ahead in wireless-chip market
CMP Media Inc. - Friday, February 25, 2000
Feb. 25, 2000 (Electronic Buyers News - CMP via COMTEX) -- There is little doubt that growth in wireless communication will persist for the next 10 years as lower handset prices and communication charges stimulate penetration of new, price-sensitive market segments.
The transition to data services such as GPRS and EDGE will be gradual and appears unlikely to have a significant impact on either unit growth or average prices. Third-generation handsets will start to emerge for W-CDMA in Japan in 2001, followed by the cdma2000 standard in Korea and possibly the United States.
Overall 3G-handset sales could reach 10% of the total units in 2003 and 95% by 2009. The nature of the evolution path toward 3G handsets will drive many of the imminent acquisition and investment decisions for the handset, infrastructure, and semiconductor suppliers.
After strong 27% growth during the next two to three years, we expect the wireless-semiconductor market to follow the same path as PC semiconductors and approach trend-line growth of 15% beyond 2003. Semiconductor content per handset should increase from 39% of price in 1999 to 49% by 2003, while the dollar content will drop from $44 to $40 during the same time frame.
However, the growth rates of individual companies will differ significantly from the industry average. Positioning for the 3G transition, market-share shifts among handset OEMs and wider implementation of software-upgrade solutions will cause significant share shifts among semiconductor suppliers. The share shifts and profitability changes will be most pronounced in the baseband arena. Solutions based on Texas Instrument's DSP gain will share in W-CDMA, while Qualcomm retains more than 60% of cdma2000.
The culling of winners and losers will be determined by external factors. In particular, Texas Instruments would benefit significantly from further market-share consolidation and quick resolution of the W-CDMA licensing issues. Conversely, OEM-market fragmentation favors second-tier suppliers and Qualcomm.
The possibility of delayed W-CDMA adoption in Europe could help Qualcomm catch up in W-CDMA ASIC development and may increase the likelihood of "rogue" cdma2000 deployment in Europe. This would also help some of the new GSM entrants, such as Analog Devices Inc.
Handset, RF, and semiconductor sales are likely to have a slower but more stable growth relative to the baseband market. The share shifts in the RF and infrastructure semiconductor segments are driven by higher levels of integration, in part enabled by SiGe (silicon geranium) and tighter linkages between baseband and RF/IF functionality.
Infineon, Motorola, and Philips should retain leadership, with Analog Devices, STMicroelectronics, and Texas Instruments having the best opportunities to gain share. With the introduction of the highly integrated 3100 MSM chipset and associated RF components, Qualcomm is well positioned to capture an increasing percentage of the handset value-added market, especially among second-tier vendors. |
