The LTE baseband landscape is evolving and the year 2014 saw improved activity in terms of competition, price tiers and market penetration. Qualcomm, the current LTE baseband incumbent, finally saw some LTE competition and is challenged by HiSilicon, Intel, MediaTek, Marvell, Samsung and others. Broadcom and Ericsson have already exited from the baseband market.

• MediaTek, a late entrant in the LTE baseband market, is poised to become the solid number two LTE baseband vendor in 2014, thanks to LTE ramp in 2H 2014. The company is currently using a stop-gap dual-chip LTE solution (LTE slim modem plus 3G AP) to compete in the LTE baseband market. MediaTek started shipping its LTE APs now, but 2014 shipments are expected to be dominated by slim modems. We expect MediaTek’s 2015 LTE shipments to be largely dominated by integrated APs.
• Intel continued its progress and scored multiple high-profile LTE designs at Samsung with the help of its XMM 7260 Category 6 LTE baseband solution.  Intel’s SoFIA 4G chips in 2015 could help further.
• HiSilicon made significant inroads in the LTE baseband market and is now shipping Kirin-branded LTE APs in volume. The company scored multiple LTE smartphone design-wins at its parent company Huawei.
• Marvell continues to benefit from the Chinese TD-LTE market. However, the competition is intensifying in the Chinese LTE market and Marvell’s share is expected to come under attack in 2H 2014. Marvell is expected to fight back with low-cost LTE APs in 2015.
• Samsung is trying to reinvigorate its Exynos AP chip growth with the help of LTE APs. The company made limited progress so far. Samsung’s in-house LTE slim modems and LTE APs are maturing and we expect Samsung Mobile to use in-house LTE modems in more flagship and mid-range models in 2015.
• Spreadtrum is currently a minor player in the LTE baseband market. But the company is expected to significantly improve its shipments with the help of 5-mode LTE slim modems and APs in 2015.
• Single-mode vendors such as Altair, GCT and Sequans are now focusing on non-handset markets.

Strategy Analytics estimates that Qualcomm’s LTE baseband volume share declined to less than 80 percent in Q3 2014 compared to 95 percent in Q3 2013, thanks to increased competition. Qualcomm still has a significant edge in terms of product roadmap and design-wins. The company has already announced its 5th generation LTE chip MDM9x45, which is expected to become available in 2015. We believe Qualcomm has a multi-year lead in LTE integrated APs for smartphones and tablets. However, 2015 is expected to see more LTE competition, thanks to improved vendor product portfolios with 64-bit LTE APs. In addition, low-cost LTE handsets in emerging markets are expected to intensify the price competition in LTE basebands.

Sravan Kundojjala (@SKundojjala)