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Shipment Value of Key Computing Chips is Estimated to Grow Over US$10 Billion by 2019: MIC
November 06, 2015

Mobile handheld device market in the developing world, especially Asia Pacific, has brought about changes in the worldwide market and industry. The market has evolved towards a more pyramid-shaped structure, with Apple and Samsung sitting comfortably in the high-end segment at top and others swarming in the value line segment at the bottom. After squeezing out Sony and HTC in the global market, Huawei, ZTE, Xiaomi and other Chinese brands are now competing head-to-head with regional vendors in the midrange and value line segments.

"There is a substantial difference between the key components adopted by products in different market segments," says Sagitta Pan, senior industry analyst with MIC (Market Intelligence & Consulting Institute). "As far as the value line segment is concerned, the costs of key computing chips (application processors and baseband processors) total around US$12, or 15% of the overall hardware costs. Common solutions include MediaTek's MT675x, Spreadtrum's SC682x, and Huawei's Kirin 940 series. Based on value line smartphone shipments, shipment value of key computing chips is estimated to top US$5.0 billion in 2015 and will grow over US$10 billion by 2019."

Smartphone Cost Structure by Segment

Estimated Costs (US$)

Value Line

Midrange

High-end

Key Computing Chips (AP+BB)

$11~12

$12~40

$40~50

Memory Chips (NAND+DRAM)

$15~17

$17~25

$25~30

Other Chips

$5~6

$6~25

$25~35

Display Module (LCD + Touch Control Module)

$18~20

$20~60

$60~75

Camera Module

$5

$5~15

$15~20

Other Components

$8~10

$10~25

$25~30

Overall Component Costs

$60~70

$70~190

$190~250

Assembly & Manufacturing Costs

$5~7

$6~10

$8~12

Licensing Fees & Profits

$60~70

$70~250

$250~350

Retail Price

$130~150

$150~450

$450~600

Source: MIC, October 2015

Affected by the distinctive development trends of high-end and value line products, the adoption of ICs also has gone on different paths: system integrators such as Apple, Samsung, and Huawei have sought vertical integration to produce in-house designed chips; local branded vendors have shifted from Qualcomm's solutions to MediaTek's or Spreadtrum's, thereby intensifying competition of value line products.

To see more about this report, please visit: Challenges and Opportunities for Mobile Device Application IC Vendors in Emerging Markets

For future receipt of press releases, or more information about MIC research findings, please contact MIC Public Relations.

About MIC

Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry.https://mic.iii.org.tw/english