Freescale and Nokia ???
Good afternoon Slacker,
<< Freescale danced around it, but I think it is safe to say that they have won business with Nokia. It looks like Freescale is a player again. Quite a blow to everybody else that was hoping to get the 2nd source business at Nokia. >>
I think so too, but I'm not yet positive. When I saw the announcement of the MXC-300-xx based Symbian S60 platform last year I assumed that Nokia was looking for a 2nd silicon source for their S60 software platform licensees ( ). Intel was originally supposed to be that 2nd source. I did not expect Nokia to be using them as a 2nd S60 source despite numerous rumors (and Nokia's own comments) that Nokia was seeking a 2nd source for 3G components.
Assuming that the private Nokia-Tuning website based in Germany is accurate in identifying the single CPU ARM11 based modem/apps processor clocked at 369 MHz as the Freescale MXC-300-xx Freescale (which I'm not yet ready to do, and urge others not to) then Freescale has some significant design wins from Nokia, and they could be supplying other Nokia S60 licensees in the future.
The following seven announced Nokia S60 models with a variety of form factors, all of which should be shipping by end of quarter will (according to Forum Nokia specs) use a single CPU clocked at 369 MHz and its possible, but unconfirmed other than by one source we've found that it is the MXC-300-xx, but it could also be misidentified by our single public source ...
Nokia 5700 WCDMA 2100
Nokia 6110 WCDMA/HSDPA 2100
Nokia 6120 WCDMA/HSDPA 850/2100
Nokia 6290 WCDMA 2100 Available Now
Nokia N76 WCDMA 2100 Available Now
Nokia N77 WCDMA 2100
In the recent earnings CC Nokia had a Q2 Highlights slide featuring the models that would significantly contribute to sales (and profit) in Q2. Two of the models above were featured -- the 6110 GPS Navigator, and the Nokia 5700.
If Freescale garnered these design wins, they are very much in play. Its possible that their recent acquisition has reduced analyst coverage and allowed them to fly somewhat under the radar as regards building a key Nokia supplier relationship.
The same diligent Lehman Brothers team that follows Nokia follows TI, and they have, over the last year mentioned several times that they anticipated a 2nd source for Nokia 3G baseband. You've probably seen their recent reasonably comprehensive TI in 2007 update. They mention (and attempt to quantify) TI losing some Nokia business to Infineon on the low end EMP losing some business to STMicro, while they expect TI to siphon significant Moto EDGE and UMTS business from Freescale. No mention anywhere about Freescale grabbing meaningful Nokia business that siphons both baseband and OMAP processors while Nokia grows their smartphone business.
Piper Jaffray published a very decent overview of the Wireless IC market in February (link provided prior by NakedSingularity) with no mention of Freescale as a processor supplier to Nokia. They did supply estimated share for the major WCDMA baseband suppliers showing significant share shift since 2004, going forward ...
2004A 2005A 2006E 2007E 2008E
===== ===== ===== ===== =====
TI 31.3% 47.7% 51.0% 45.3% 40.7%
Qualcomm 11.9% 13.3% 19.6% 24.3% 29.1%
Freescale 21.2% 13.2% 9.1% 13.3% 16.6%
Matsushita 7.1% 6.5% 5.6% 4.3% 3.1%
NEC 13.6% 5.9% 4.1% 3.4% 2.7%
Renesas 0.0% 5.1% 4.9% 4.7% 4.5%
Fujitsu 0.0% 3.6% 3.0% 2.4% 1.8%
Others 15.0% 4.7% 2.5% 2.3% 1.3%
While I wish I had a 2nd or 3rd set of estimates, for comparison, these look reasonable. With most of the top tier handset makers actively seeking second (or even 3rd source in the Motorola case, and perhaps the Samsung case) estimating beyond 2007 is rather difficult.
On the Freescale CC in response to a question asking who their fastest growing baseband customers were they responded by naming RIM and I've paraphrased that below ...
RIM is our fastest growing customer. One we can name. There are others I can't name. You'll need to do your homework on the web ...
One interesting comment made was in relation to an unarmed Freescale baseband competitor (obviously QUALCOMM). I'm paraphrasing again ...
Motorola is their only opportunity to grow because they are never going to work in Nokia.
Paraphrasing some more ...
As for breaking into Nokia, we would welcome the opportunity.
They were very emphatic about the fact that they expected to grow the wireless business sequentially in Q2, and if they are shipping ICs for any or all of the seven Nokia models listed above, they certainly should even with flat to down Motorola business.
I had hoped that Sandeep Chennakeshu would participate in the CC.
Despite the useful information it contains, I caution anyone reading this post to not take the www.nokia-tuning.net site at face value yet in regard to the new Nokia single chip processor, but attempting to identify to verify the manufacturer definitively is a worthwhile exercise.
Shifting gears somewhat, and slightly off topic ...
For those of us that hold QCOM as well as NOK and TXN (perhaps I'm the only one here) it was gratifying for all to have the market respond well to all three's CQ1 Earnings. It sets a positive sector tone, and I think QUALCOMM's estimate of 2007 UMTS (WCDMA) sell-in remains conservative. I expect it will be upped sometime in the next 3 months. Hopefully their CDMA estimate which depicts tiny 2007 growth will be upped as well.
QUALCOMM had an excellent quarter. Certainly better than TI's although TI showed nice margins and cash flow. I couldn't find much to pick on in my 1st review of QUALCOMM's financials (other than a few things you picked up on elsewhere) and I enjoyed their CC. PJ did a very nice job. Keitel and Jha always do. I didn't miss Steve Altman at all. In my estimation and while I greatly respect what he's done in architecting QUALCOMM's licensing strategy and building the huge licensed base, I think he talks too much, talks to loosely and too transparently when he implies certain things, and telegraphs too much. Despite my initial positive reaction to his appointment as President, my personal jury is out on him, and my personal estimation of PJ and Lou Lupin is growing. I thought Lou Lupin did a fine job fielding questions on IPR issues.
Best,
- Eric - |
