According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, in the third quarter of 2009, due to the global mobile phone shipment rebound, strong October holiday sales in the Chinese market, and advanced shipments for major branded vendors anticipating the year-end holiday demand, the supply of components such as PA and flash memory was strained. However, as Taiwanese manufacturers had stocked up on components in the second quarter and major clients Motorola, Sony Ericsson, and Nokia reduced their orders in the third quarter, Taiwanese manufacturers' demand for feature phone application ICs subsided, too. Consequently, Taiwanese feature phone baseband processor market volume reached 9.6 million units in the third quarter of 2009, dropping 28.3% sequentially and 53.6% year-on-year.
Among Taiwanese feature phone manufacturers' major clients, LG saw the most significant shipment growth in the third quarter. Taiwanese feature phone manufacturers' shipment volume share for LG rose from around 10% in the second quarter to over 20% in the third, thereby driving up MediaTek's and Infineon's shares in the baseband processor market. With TI exiting from the value-line mobile phone IC market, it is expected that MediaTek, Infineon, and even Spreadtrum will take over TI's original market share.
According to MIC Industry Analyst Joyce Chen, "of the five major branded mobile phone vendors, LG and Motorola have adopted MediaTek's chipsets, and LG is expected to mainly use MediaTek's and Infineon's chipsets in its value-line product line while Motorola is expected to collaborate with Spreadtrum and MediaTek. Sony Ericsson is expected to stick to the ST-Ericsson platform, and Nokia plans to use the Qualcomm platform." Ms. Chen added, "with Motorola, originally a major client of Taiwanese 2G mobile phone manufacturers, about to switch to a different platform and Taiwanese manufacturers still unfamiliar with the new platform, it is expected that Taiwanese manufacturers will have a hard time securing the orders. In the third quarter, nevertheless, with LG increasing orders for 2G mobile phones, both MediaTek and Infineon saw growing demand for their chipsets."
Meanwhile, in the Taiwanese feature phone PA market, Skyworks continued to top other solution providers with a share of over 80% in the third quarter. Due to Nokia's lackluster performance in CDMA model shipment, Anadigics saw its market share drop. RFMD also saw its market share slide in the third quarter as Vodafone cut back on its orders.
Taiwanese mobile phone manufacturers' major clients Motorola, Sony Ericsson, Nokia, and LG are making changing in their outsourcing strategies in the period 2009-2010. "Overall, these vendors are expected to increasingly release orders for value-line models to Chinese manufacturers, which have cost advantages. Taiwanese manufacturers are expected to have a better chance of landing orders for value-line and mid-range 3G feature phones in the future", said Ms. Chen.
Looking at the third-quarter Taiwanese feature phone baseband processor market share by system technology, it can be seen that the share of CDMA1x 2000 EV-DO/UMTS models grew to 2.4%, mainly boosted by the shipments of 3G models by Okwap, Qisda, and FIH/CMCS. In the EDGE segment, in addition to the existing orders from Motorola and Sony Ericsson, Nokia also began releasing orders for EDGE models in the second half of 2009. It is projected that, with Nokia continuing to release orders for EDGE, UMTS, and CDMA1x 2000 EV-DO models, Taiwanese contract manufacturers will see significant changes in their 2G and 3G product lineups and demand for 3G chipsets will see further growth as well.
More information can be found in the following MIC report: The Taiwanese Feature Phone Application IC Market, 4Q 2009
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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
About ITIS
The Industry and Technology Intelligence Services (ITIS) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.