LTE cellphones to reach 56 million in 2013

TEMPE, USA: Forward Concepts has announced the publication of its newest in-depth annual study of the worldwide cellphone market and virtually all of the chips that go into them.

The extensive (594-page) study, “Cellular Handset & Chip Markets '09,” gauges the performance of the top 53 handset vendors and ranks their 2008 market shares. The study provides dozens of detailed forecasts by technology and by global region through 2013 of handsets, subscribers and cellular handset chips of all types.

In addition, the report provides estimates of the market shares of cellphone vendors by air technology, including HSPA+ and LTE. Even ultra-low-cost cellphones are forecast by air interface. Importantly, the study estimates market shares of chip vendors for virtually every chip type and for every applicable air technology.

Market metrics are the central focus of the study, and some key findings are:
* Cellphone unit market growth continues slowing globally. The 2008 market was up 4.1 percent, but is forecast to decline by 4.4 percent in 2009 to 1.22 billion shipments. However, a healthier 12.8 percent growth is forecast for 2010.

* In spite of an overall decline this year, smartphone shipments are predicted to grow by 25 percent, feature phones by 2.5 percent and ultra-low-cost phones for developing countries will grow by 14.5 percent.

* The fast-growing smartphone market is driving introduction of peripherals that support Wi-Fi, Bluetooth, GPS, and FM radio on a single chip.

* HSPA+ is emerging in 2009, and will begin to displace WCDMA and HSDPA. LTE will begin in 2010, first as data cards and dongles. The forecast calls for LTE handsets to reach 56 million units in 2013 for a compound growth rate of 262 percent.

* Although the cellphone digital mobile TV market is growing, free-to-air analog mobile TV will dominate the 78-million receiver unit market in 2009, accounting for over half of the world market -- driven by the demand in China, Southeast Asia and Eastern Europe.

* The ever-present LCD display will soon have to make room for newer displays, like OLED, ePaper, Qualcomm's Mirasol, and Liquavista. The market for these new "post-LCD" displays is growing fast -- to over $3 billion in 2013.

* MEMS constitute another fast-growing component family in the cellphone market, expanding from basic accelerometers, to filters, gyroscopes, RF switches and microphones, reaching over $1.6 billion in 2013.

* Application processor competition is heating up as the demand for increasing video and Internet functionality grows with 3G's higher data rates. There is a clear trend of bundling application processors with digital basebands, either on a single die or in a multichip package. The resulting "Communication Processors" are becoming popular, and could ultimately hurt companies which specialize in only one of those components.

According to the principal author, Carter L. Horney: "The cellphone continues to be the physical and market magnet that is pulling in the functionality of digital cameras, PDAs, MP3 players, GPS navigators, Bluetooth, Wi-Fi, AM/FM Radio, mobile TV, cordless phones, smart cards and even fingerprint sensors, and the cellphone is quickly becoming the dominant market for each and all of these functions.

"Our report covers all of these cellphone component markets, and companies making stand-alone versions of such products would be well-advised to understand how their market will be impacted by cellphones."

Will Strauss, Forward Concepts’ president and editor of the report, said: “Qualcomm and continues to dominate the cellphone chip market, but ST-Ericsson is expected to displace Texas Instruments for the number-two spot in 2009. Infineon is not far behind and with recent new financing, their future appears brighter now.

"With new peripherals and features being continually added, there opportunities for smaller vendors to target new chip types to get their piece of the market. This valuable resource provides the key information needed for new business plans. We are confident that this study provides the most comprehensive coverage of cellphone and cellphone chip markets available."

Market changes in DSP silicon warrants new analysis

TEMPE, ARIZONA: Forward Concepts, the premier market research firm tracking silicon for digital signal processing (DSP), has published a new in-depth market study guiding clients through the market changes that have recently occurred, providing guidance as to where the worldwide market for DSP-centric silicon is the fastest growing.

“DSP Silicon Strategies ‘09” is the most comprehensive market report on DSP silicon, and the author considers DSP as the driving technology for the entire semiconductor industry.

Will Strauss, President of Forward Concepts and the author of the report, points out that DSP technology is required for all digital wireless -- from basic personal navigation devices (PNDs) to advanced 4G cellular, and all digital multimedia, from lowly MP3 players to rich-content personal media players and HDTV receivers.

Strauss said: “Many components that were once reported as “DSP chips” are no longer. Rather, they are reported as systems on chip (SoC) in categories like ASICs or ASSPs, even by traditional DSP chip vendors like Texas Instruments and Analog Devices.”

The report points out that off-the-shelf or “discrete DSP chips” are only a small part of the DSP silicon universe. Specifically, discrete DSP chips now constitute only 11 percent of the $27 billion 2008 worldwide market for DSP silicon.

The report readily acknowledges that 2009 will be a “down” year for most DSP silicon market segments, but long-range, the report points out that DSP is the technology that is driving the entire semiconductor market.

Strauss added: "Because of the drop in DSP shipments this year, five-year CAGR figures can be misleading, so we really should eye the market growth from the depths of 2009, rather than from 2008.”

He cites, for example, the worldwide DSP silicon market is forecast to grow at a 9.4 percent rate over the next five years -- from 2008 through 2013 to the $43 billion level. However, measuring from 2009, the four-year growth rate is forecast at a more respectable 12.1 percent CAGR. Of course, some segments, like wireless and consumer electronics will grow at a much higher rate.

The report is said to be the only market study providing worldwide electronic equipment production forecasts (by region and by application market) and both IC and DSP content for each year from 2008 through 2013.

The in-depth 230-page study profiles the DSP market stance of 46 companies and includes 87 Figures, 51 Tables, plus extensive Appendix of Abbreviations & Acronyms for DSP, Communications & Multimedia.

IC shipments likely to grow 3.8pc in 2008

The latest wireless/DSP bulletin from Forward Concepts has highlighted an improved shipments of DSP and RISC chips for cell phones as well as DSP shipments for wireless infrastructure.

I had the privilege of interacting directly with Will Strauss, President & Principal Analyst, Forward Concepts, author of this particular bulletin.

On being quizzed about the improvement in shipments of DSP and RISC chips for cell phones, Strauss indicated that new cellular subscribers in China and India are continuing to grow, even as Europe and the US are reaching saturation.

"Since most people here have cell phones, the market is mostly driven by the replacement devices. In the US, handsets are also subsidized by the carriers under a subscription plan that ties the subscriber to a handset for two years," he says.

An interesting point in the wireless/DSP bulletin is the fact that although DSP shipments for wireless infrastructure were down 14 percent in May compared to April, it was still 30 percent higher than May of 2007. What are the reasons for this peculiar trend?

Citing that the reasons were not yet clear, Strauss adds that in infrastructure, more so than for cellphones, the quarterly shipments are all that really matter. Forward Concepts hopes to have better calibration when June shipments are reported at the end of July.

Going forward, how are DSPs likely to perform? Well, it is to be noted that DSP chips, as devices with that specific nomenclature, are now becoming a decreasing percentage of the DSP silicon market. That's because DSPs as cores are becoming just part of SoCs in everything multimedia, in VoIP, in cell phones, etc., adds Strauss.

Similarly, RISCs, like DSPs, are simply part of the SoCs, and often in lock step with DSP. That's because every cell phone chip has at least one DSP core and one RISC core inside.

Another point noticeable in the bulletin is that automotive, wired communications and storage (disk drive controllers) sectors have seen a slowdown.

On this, Strauss clarifies that the automotive market has seen a drastic slowdown because of high fuel prices. Telecom companies have been slow to invest in infrastructure as wireless is taking over their traditional wireline market.

As for the disk drive controllers, their prices are akin to those of DRAM memory, subject to big swings in selling prices, lowering revenue even when production is strong.

Mobile Internet devices or MIDs are devices people are looking forward to. It is hoped they would bring some cheer to the IC market. This remains to be seen as the MID market doesn't begin until late in Q3 2008.

Finally, the key question: what's the industry outlook likely to be for the rest of the year? Strauss says: "The semiconductor industry is also subject to world economic changes. The outlook is for minimal world economic growth in 2008, mostly because of high oil prices and the weak US dollar. We are forecasting only 3.8 percent revenue growth in worldwide IC shipments for 2008, down from its traditional annual growth rate of about 7 percent."

Collision course ahead?
On another note, the IC Insights reported that current spending plans by IC manufacturers worldwide will lower total semiconductor capital expenditures by 18 percent to $49.7 billion in 2008 from $60.3 billion in 2007, according to new data collected by IC Insights.

A growing number of large IC firms are now outsourcing more products to foundries. Also, major pure-play wafer foundries are aiming to increase their profitability by controlling capital spending. As such, IC Insights believes that the IC industry continues on a "collision course" with respect to supply, demand, and average selling prices or ASPs!