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MWC 2016: Mobile Processor Highlights

by Sravan Kundojjala | 2月 26, 2016

Mobile World Congress (MWC) in Barcelona this week provided glimpses of chipset vendors’ upcoming innovations, products and strategies. Strategy Analytics’ component analyst team attended the event and here are some highlights from the show from a chipset perspective. These announcements came in the midst of significant declines in baseband and apps processor revenues in 2015.

FinFET technology becoming mainstream faster than expected: Qualcomm (Snapdragon 625), Samsung LSI (Exynos 7870), MediaTek (Helio P20) and Spreadtrum (SC9860) all announced mid-range FinFET (14 nm / 16 nm) products at the show. FinFET transistor technology, first appeared in commercial smartphone  devices in early 2015, now rapidly moving to address mid-range devices. We thought FinFET would be expensive for mid-range chips for the first 18-24 months but these announcements suggest vendors are trying to bring their scale advantage to proliferate the market with low-cost, power efficient and feature packed chips even in mid-range. This is a good news for TSMC, Samsung LSI, Global Foundries and Intel.

LTE features: Strategy Analytics estimates over 1 billion LTE basebands were shipped in 2015 and the battle now shifted LTE feature set as entry level LTE chip prices continue to fall rapidly. Companies such as Qualcomm are investing in LTE-Advanced Pro (gigabit class LTE), LTE-Direct, LTE-U (LTE Unlicensed), LAA (LTE Assisted Access), LTE-Broadcast, NB-IoT and others to differentiate themselves and to get ahead of the competition. We think it would take considerable R&D investments for chip companies to acquire this expertise and to match Qualcomm. We believe success in these areas could translate well into 5G success for baseband companies.

Cellular IoT and 5G: Cellular connectivity in IoT applications was a hot topic at the show and many people agree that it is going to happen. Qualcomm, Intel, MediaTek, Sequans, Altair / Sony are equipped well to take advantage of cellular connectivity take off in IoT devices. We have seen IoT-specific LTE modem announcements from many of these companies, especially Intel. Baseband DSP IP supplier, CEVA, also announced its Dragonfly reference design platform to address cellular connectivity in IoT devices. We believe CEVA’s licensees including Spreadtrum, Intel, Samsung LSI and Leadcore could benefit from this new platform. Qualcomm, Intel and MediaTek announced their 5G efforts at the show. As 5G technology is expected to bring many industries together by servicing broader needs including power efficient low data rates. Intel, specifically, appeared determined not to miss the 5G wave as the company was late to the LTE market. MediaTek, on the other hand, announced partnerships with infrastructure vendors and network operators to expand beyond emerging markets and to take advantage of upcoming 5G wave.

Non-phone revenues: Mobile-centric companies are now searching for new avenues of revenue growth to extend their existing technology and scale in the wake of saturating or declining trend in recent times in their core mobile revenues. Qualcomm’s chip division QCT, for example, is trying to increase its semiconductor dollar content with new offerings such as finger print sensor technology and enhanced RF portfolio. Also, QCT indicated it would go for mergers and acquisitions to expand into new areas such as autos, IoT, wearables, networking, data centers and healthcare.

Competitive dynamics: After a difficult year, Qualcomm with its new Snapdragon 820 flagship chip and significantly refreshed mid-range portfolio is well positioned to rebound strongly in 2016. Strategy Analytics predicts a better year for Qualcomm in terms of shipments and revenues in 2016 compared to 2015. Spreadtrum, Samsung LSI and HiSilicon are likely to maintain their momentum in 2016, while MediaTek is likely to feel margin pressure in its growing 4G business. However, with improved product mix (more contribution from Helio lineup) in the second half, the company could offset that to some extent. Intel, on the other hand, is still waiting for a hero LTE baseband design-win to justify its modem R&D investments. The company appears to have a fair chance to win a slot in the upcoming speculated low-end iPhone. While this could provide much needed boost to Intel’s mobile business, Intel still needs to do work on signing up high volume customers for its Atom X3 integrated products.

Overall, the mobile chipset industry continues to be dynamic and MWC 2016 announcements provided glimpses of upcoming technologies and industry direction. We will be doing a deep dive on CES / MWC 2016 component announcements (processors, RF, memory, battery, display, camera and others) in our upcoming webinars on 8th March. You can register for these webinars here (1st  webinar and 2nd webinar).

Sravan Kundojjala (@SKundojjala)

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