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Smartphone Application Processors Update: Strategy Analytics

Posted in Device Platforms by Manas Ganguly on October 18, 2013

The global smartphone applications processor market continued to show strength and grew 44 percent year-on-year to reach $4.4 billion in Q2 2013, according to the Strategy Analytics. Qualcomm, Apple, MediaTek, Samsung and Spreadtrum captured the top-five revenue share spots in the smartphone processor market in Q2 2013. Qualcomm maintained its dominance in the smartphone applications processor market with 53 percent revenue share followed by Apple with 15 percent share and MediaTek with 11 percent share in Q2 2013.

Multi-core processors accounted for around 66 percent of all smartphone apps processor shipments in 1H 2013, up from 40 percent in 1H 2012. Quad-core smartphone applications processor shipments registered five-fold growth in 1H 2013 compared to 1H 2012, while single-core smartphone applications processor shipments declined by 14 percent in the same period. Qualcomm, Apple, Samsung, MediaTek and ST-Ericsson captured top-five volume share spots in the smartphone multi-core applications processor market in 1H 2013.

Low-cost suppliers MediaTek and Spreadtrum together captured over one-third volume share in the smartphone applications processor market in Q2 2013, thanks to the smartphone boom in emerging markets. MediaTek and Spreadtrum’s improving global footprint coupled with their maturing product portfolio could spell a threat to global players such as Qualcomm, Broadcom, NVIDIA and Intel.

Qualcomm maintained its dominance in the smartphone applications processor market helped by its LTE leadership. After a successful run with its Snapdragon 600 family of chips in the first half of 2013, Qualcomm is well-positioned to repeat it in the second half with its flagship Snapdragon 800 family of chips

Is MTK set to disrupt the India/SE Asia Tablet markets?

Posted in Industry updates by Manas Ganguly on June 2, 2013

Mediatek (MTK) is a Taiwaneese semi conductor maker with revenues worth $3.4bln in 2012. In the semiconductor industry, that number is a modest one, and MTK’s market share is only 1.1% of the global semiconductor sales (Source- iSuppli).


However, MTK has a few disruptions to its credit. Starting 2007 onwards, MTK’s chipsets engendered billions of low cost mobile devices at around half the price of the existing industry standards at that point of time. This provided a significant fillip the telecom industry as it lowered the cost of entry and initial cost of hardware acquisition for a first time buyer. It also was instrumental in replacement sales where in feature categories were available at lower price points thereby getting people to migrate from their existing handsets to a better feature set at a price equal or lower to the existing price of the handsets. It spawned companies such as Micromax, Lava and Karbonn.

In 2012, yet another Taiwanese chipset maker – Allwinner disrupted the tablet market by providing chipsets for WiFi enabled Tablets. This enabled a spate of low end tablets for the first time tablet buyer. Tablet category was till then defined by the likes of Apple and Samsung. Allwinner with Android truely liberated the category of tablets for the first time buyer. What resulted was a major market disruption where in the markets shifted from the majors to low cost- value oriented minors. At the last count, such tablets sold 2.2mln units – out of the 3mln tablet market in India.

In 2013, MTK now endeavours to disrupt the low end tablet space with low cost 3G chipsets – at a differential of $2-3 over the Allwinner WiFi chipsets. That would translate to Rs.150-200 difference in end consumer price for a 3G tablet over the WiFi tablet. One can expect that with the pricing gap squeezed to Rs.150/200, buyers of WiFi tablets could make the jump to the 3G tablets for the inherent advantage – Portability. There – thats the disruption that i am talking about. A Rs.5000-6000 3G tablet. Introduction of low-end 3G tablets and smart devices and the natural price decline curve – will shift demand, supporting uptake among new, less affluent customer segments

What could that do? The way i look at it – there are a few sectors in India that could immediately benefit from low cost 3G tablets – Education, Insurance, Healthcare, G2C payments, UIDAI based transactions and Financial Inclusion, Enterprise and Businesses. Slowly but surely, a lot of drivers are getting together to push the tipping point for tablets and smart devices.
1. Pricing Advantage (Will fuel 60% acquisitions)
2. Affordability in 3G Mobility
3. Business and Bring Your Own Device (BYOD) (Will fuel 4% adoption)
4. Platform maturity and Applications
5. Vernacular matures as a platform
6. Government push on Tablets as a segment to connect the unconnected- Election Year!

While initial estimates point at 6 mln units sales of tablets in India in 2013 – the number might have a groundswell driven by the numerous government programmes – and the MTK advantage would be key to deliver services remotely on these devices.

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