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Cellular Baseband Market Showed Healthy Growth in 1H 2010

by Sravan Kundojjala | Oct 07, 2010

Last week we published our cellular baseband market share estimates for 1H 2010. By our estimates, cellular baseband unit shipments grew 23 percent and revenues grew 15.5 percent from 1H 2009 to 1H 2010. The non-handset segment, which includes PC data cards, PNDs, netbooks, tablets wireless USB dongles and M2M, accounted for 12 percent of total baseband revenues in 1H 2010 and grew faster than the handset baseband market.

Here are some highlights of our cellular baseband market share estimates:

Qualcomm continued its revenue share lead with 39.6 percent share in 1H 2010. Qualcomm ranked number one in CDMA and W-CDMA baseband markets. We believe much of the Qualcomm's growth came from smartphones and non-handsets in 1H 2010.

MediaTek ranked number two in revenue share behind Qualcomm with 16.3 percent share in 1H 2010. Contrary to popular perception, MediaTek currently doesn't compete head-to-head with Qualcomm and only recently launched its first W-CDMA baseband. By our estimates MediaTek had less than 1 percent W-CDMA share in 1H 2010 but the company ranked number one in GSM/GPRS/EDGE (GGE) and TD-SCDMA baseband markets in revenue terms. MediaTek’s baseband shipments to grey handset OEMs showed signs of decline in 1H 2010 in the wake of government-led crackdowns in India and China.

ST-Ericsson finally showed signs of recovery in 1H 2010 after a difficult 2009 with its improved and rationalized product line up for GGE, TD-SCDMA, W-CDMA and LTE markets. However, the company has to shift its focus to its stagnant W-CDMA market share to compete against Qualcomm and Infineon.

Infineon continued to gain share in GGE and W-CDMA markets with the help of its top-tier handset OEM relationships. By our estimates Infineon is emerging as a strong competitor to Qualcomm in the non-handset market also with 9 percent unit shipment share in the non-handset segment of the W-CDMA market. Infineon is expected to improve its non-handset baseband share further once Intel completes its acquisition in 2011. Texas Instruments' exit from the baseband market creating opportunities for Infineon and Broadcom at Nokia.

Broadcom's baseband revenue grew 245 percent in 1H 2010 compared to same period the year before thanks to its design-wins at Nokia and Samsung. By our estimates W-CDMA revenues accounted for 17 percent of Broadcom's total baseband revenues in 1H 2010 and the company continued to improve its product-mix.

Spreadtrum, Marvell, Icera, and Via Telecom also made progress in 1H 2010. Renesas' baseband revenues were down slightly but the company is expected to emerge as strong player by 2012 with LTE chipset design-wins at Nokia.

Looking forward, we believe that the non-handset market and new radio technologies (HSPA+, LTE and TD-SCDMA) to create growth opportunities for baseband vendors.

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