Intel Tops in Struggling Comms Market
By Alex Romanelli, Electronic News Online -- 5/22/2002 3:42:00 PM
A new report from Gartner Dataquest concerning the communications space pushes Intel Corp. ahead of the pack, as it ranks second in worldwide sales of communications devices, and ranks first for sales of semiconductors for communications applications.
The overall communications systems (wired and wireless) end-user market for semiconductors and optical components shrank by 38 percent in 2001. A combination of demand-side issues and an oversupply of components in the market at the beginning of 2001 led to the market decline, Dataquest said. The worldwide economic slowdown decreased spending for IT products and decreased capital spending by telecommunications carriers all had an effect. Nearly every product market contracted by 30 percent or more, the research company said, with only the only exceptions being Bluetooth and network processors.
Intel climbed into the second spot behind Agere Systems Inc. largely thanks to revenues derived from sales of flash memory and because it gained share in the LAN adapter market. Although Intel’s communications revenue fell 22 percent to $2.7 billion, the decrease was relatively small enough to push it from fourth to second place. Agere topped the table with sales of $2.8 billion. Texas Instruments Inc. was third with 5.1 percent market share, compared to Agere’s 5.8 percent and Intel’s 5.7 percent. TI reported communications revenues of $2.4 billion, a 33.1 percent decrease from 2000. Motorola Inc. came in fourth, having swapped positions at the table with Intel.
When the semiconductor sales figures alone are examined, ignoring sales from optical components, Intel tops Dataquest’s chart and again swapped positions with Motorola, which is relegated to No. 3 on the table. Intel derives the majority of its communications revenues from semiconductors, with only $10 million coming from optical components in 2001. Intel saw its revenues from communications semiconductors shrink by 22.3 percent from 2000 to $2.7 billion in 2001. TI held onto the No. 2 spot, with a 33.1 percent drop in communications semiconductors revenues to $2.4 billion. Motorola saw a massive 45.2 percent decline, with Dataquest recording a 5.5 percent market share on $2.2 billion in 2001 revenues.
TI contracted in line with the market, but Motorola lost market share by faring worse across the board. Agere lost market share in 2001, primarily because of its exposure to optical networking, the hardest-hit market. STMicroelectronics performed better than the market, particularly in the wireless sector. In the optical components market, Alcatel Optronics managed some small growth partly because the European telecommunications market began its decline later than the North American market. Internal sales to its parent company, Alcatel SA, also offset declines in external sales in North America. Qualcomm Inc. fared better than most, growing 14.6 percent in overall communications revenues to $1.4 billion, ranking No. 11.
Dataquest expects revenues from communications semiconductors to be roughly even with 2001. The cellular market and LAN market began to show signs of recovery last year and are expected to perform relatively well in 2002. Companies in these areas are likely to gain market share this year, Dataquest said. Carrier capital spending is not expected to increase until 2003, which will continue to have an adverse effect in 2002 on those communications component makers serving the carriers. Certain companies might see sequential quarterly growth because of the end of the inventory overhang, Dataquest said, but market growth will be limited by lower sales of end equipment. |
