Mobile phone applications processors power today's smartphone apps and increasingly phones are promoted as packing "1GHz processors" or even "dual-cores".
Last week we published our smartphone applications processor market share data and by our estimates global applications processor revenue reached $1.84 billion in 1H 2010, up 60 percent over the same period the prior year, primarily thanks to the growth in smartphones. The increase in the smartphone market is real and it has been reflected in silicon vendors' revenues and shipments as many players are re-positioning themselves to tap into this growth. The battle between the baseband-integrated applications processor vendors and stand-alone applications processor vendors continues to fragment the market.
Here are some top-level insights from our quarterly smartphone applications processor market share tracker for 1H 2010:
• In just three years, the market for stand-alone apps processors has shrunk from around 72 percent of the total apps processor market to just 32 percent in unit terms in 1H 2010.
• Qualcomm led the overall smartphone applications processor market with 35 percent revenue share, thanks to its early-mover advantage in the Android ecosystem. Qualcomm's integrated applications processors, which combine advanced air interface technology and applications processing capability, are increasingly gaining acceptance in the smartphone market. Qualcomm's smartphone applications processor unit shipment share increased from just 3 percent in 2007 to 19 percent in 1H 2010.
• Texas Instruments (TI) led the market in unit terms with the help of its legacy Nokia relationship. TI ranked number two in the stand-alone applications processor category with 24 percent revenue share. We believe much of the TI's future growth depends on the traction for its OMAP4 series applications processors and it may prove difficult for the company if it fails to line up big customers for its OMAP4 series processors in 2011.
• Samsung's relationships with Apple and Samsung helped the company to reach number one in stand-alone category and number three overall in the smartphone apps processor market in revenue terms. Samsung is set to continue its momentum into 2011 with the help of Apple and Samsung.
• Marvell ranked number four in both revenue terms and unit shipment terms on the strength of its relationship with RIM. Marvell's ARMADA 618 / 628 high-performance processors are expected to be adopted by RIM for its smartphone and tablet products in 2011.
• Qualcomm, Texas Instruments, Samsung, Marvell, Renesas and ST-Ericsson together accounted for 98 percent of total smartphone applications processor unit shipments in 1H 2010.
Looking forward, we expect new players such as NVIDIA, Intel, Broadcom and MediaTek to attack the high-growth smartphone market with focused efforts in 2011. We also expect the stand-alone applications processor vendors to fight back with high-performance dual-core processors in 2011 which could potentially increase their value share in 2011.
- Sravan Kundojjala