Outlook Series | Worldwide Cellular Broadband Chipset Shipments CAGR 35% Through 2014

Worldwide Cellular Broadband Chipset Shipments CAGR 35% Through 2014

January 11, 2010

Cellular chipsets are the semiconductor engines that enable every mobile phone to connect to one another, so consequently, the stunning growth in mobile phones to over 1.1 billion last year has provided an equally stunning rise in the cellular chipset market. Increasingly, a greater percentage of cellular chipsets are being used in non-mobile phone applications, such as mobile computing (notebooks, netbooks), industrial/machine-to-machine (M2M), automotive, health/medical, and consumer devices (eReaders, MIDs, gaming devices). While the portion of worldwide cellular chipsets used for these applications is currently small compared with the more than one billion unit mobile phone market, IDC forecasts significant growth in these cellular broadband applications through 2014.

"Cellular broadband chipsets can provide the all-important data connectivity to other devices, especially to the Internet, that consumers are increasingly demanding as they migrate from fixed/wired devices to mobile/handheld devices," said Flint Pulskamp, Wireless Semiconductor analyst at IDC. "There is strong appeal for real-time data connectivity and access not only in traditional computing devices like notebooks, but also in a number of emerging markets such as medical/health monitoring, industrial/M2M, as well as a growing array of consumer products such as eReaders."

Key IDC findings from this market outlook include:

Worldwide cellular chipsets will grow at a 9.3% compound annual growth rate (CAGR) on a unit basis from 2009 to 2014. While cellular broadband applications made up less than 7% of this unit volume in 2009, this market will grow at a 35% CAGR to account for over 16% of total chipsets by 2013, far outpacing the growth in the mobile phone market.

While most cellular broadband chipsets have been consumed by industrial/M2M applications prior to 2008, portable PCs and mininotebooks (also known as netbooks) will drive a majority of the segment growth going forward, followed by a variety of other consumer, health/medical, and automotive applications.

Strong growth in cellular broadband, primarily driven by portable PCs, mininotebooks, and mobile Internet devices (MIDs)/smartbooks will help accelerate the migration of this segment from 2G and 2.5G technologies to 3.5G and 4G technologies over the next several years. The rollout of LTE will greatly encourage this migration starting in 2011.

The growth in cellular broadband applications will also drive growth for the design, manufacture, and certification of subsystem modules and will benefit leaders in this area such as Huawei, Sierra Wireless, Cinterion, ZTE, Option, and Novatel.

A very few cellular chipset suppliers dominate the cellular broadband space today, and most are also leaders in the mobile phone space. A vast majority of the segment share is controlled by Qualcomm, ST-Ericsson, Infineon, and Icera, which all stand to benefit by the continued growth in this business.