Barcelona hotels for MWC 2010: Once bitten, twice shy

You may recall that hotels were generally available even at the last minute for the Mobile World Congress in Barcelona this past February. Most of those readily available rooms were the result of last-minute cancellations due to a severe drop in Q4/08 wireless business. After being bitten by the sudden shortfall in paying guests, hotels are ensuring that there will be few cancellations this coming February. That's because many of the Barcelona hotels are now requiring nonrefundable advance payments for the full weekís stay. So choose wisely.

Qualcomm announces sampling of first Long Term Evolution (LTE) multi-mode modem chipsets

Qualcomm has announced that it is sampling the industry's first chipsets for dual-carrier HSPA+ and multi-mode 3G/LTE. Its MDM8220 chipset made it first to the gate in the Dual-carrier High-Speed Packet Access Plus (DC-HSPA+) support race, while  the MDM9200 and MDM9600 chipsets are the industry's first multi-mode 3G/LTE solutions. The significance of this is that Qualcomm is positioned to retain its Number 1 cellular chip vendor status for several more years as the industry moves from 3G to HSPA+ and LTE. ST-Ericsson now claims the Number 2 cellular chip vendor slot and MediaTek is the pretender for the Number 3 slot...as TIís Nokia business begins to tail off.

MediaTek bulks up

According to iSuppli, Taiwan-based MediaTek Inc. is likely to post the best performance among the world's 20 largest chipmakers with an expected increase of 21.7 percent. The fabless chipmaker with its line of mobile handset baseband chips capitalized on the strong growth of China's white-box handset market. As we have explained in prior newsletters, MediaTek supplies almost complete chipset solutions to its OEM customers, including its own baseband and RF transceiver chips but also supporting chips from other vendors (e.g., Skyworksí PA chips). This makes it very easy for unsophisticated white-box handset vendors to, in essence, wrap plastic around the chipset and add their individual brand labels.

On November 20th, MediaTek and Qualcomm announced that they have entered into a broad arrangement under each companyís patent portfolios, including CDMA and WCDMA essential patents, with respect to all integrated circuit products, including CDMA and WCDMA products. Keeping with tradition, the exact details of who gets what and for what are obscured through secrecy clauses in all Qualcomm agreements. Of course, MediaTek handset customers still have to take out licenses directly with Qualcomm for any CDMA or WCDMA products whether they include MediaTek chips or not.

The arrangement lowers the barrier of entry into the worldwide 3G handset market for China-based handset companies, and will likely limit the further development of the gray handset market in China. No doubt, first-tier handset companies will welcome the lower-priced chipsets for their entry-level offerings. And major cellular operators will welcome the resulting lower-priced handsets for their basic 3G customers. And, of course, MediaTekís revenues are sure to get a boost, too.

MediaTek has also announced that it will be in volume production of monolithic GSM/GPRS chips (MT6253) this month. The company is aiming to produce 100 million of these chips in 2010. Placing RF transceivers on the same die with (RF-generating) baseband chips is not an easy task. This could be a direct threat to Infineonís market dominance in the single-chip GSM/GPRS market (but Infineon also has monolithic GSM/GPRS/EDGE chips).

MediaTek has also announced adoption of Extended Depth of Field (EDoF)-enabled CMOS image sensors for its 3G handset IC chip sets, offering a cheaper solution than traditional auto-focus techniques.

Although MediaTek is the currently the king of low-end cell phone chip solutions, we see clear evidence of the company's steady climb up the food chain and increasing revenues, soon securing that Number 3 cell phone chip vendor spot.

Sequans lands 4G investment

Sequans Communications SA, the leader in WiMAX chipsets, has announced that Alcatel-Lucent and Motorola Ventures led a round of financing to foster the company's LTE development program. With this new round of financing, the French company said it intends to accelerate its LTE development timeline and to add resources to its LTE teams. Georges Karam, CEO of Sequans Communications once told me, ìWe view WiMAX as ëtraining wheelsí for LTE.î  Sequans expects to demonstrate its first LTE samples in early 2010 in support of pre-commercial operator trials, so it looks like the training wheels will soon be coming off.

Shameless plugs

Our newest market study, ìUltra Mobile Device & Chip Market Opportunitiesî lays out the dynamics of the emerging market for Netbooks and Mobile Internet Devices (MIDs) and forecasts both devices and the many chips that enable them through 2014. The chip dynamics coverage begins with Intelís Atom (and its progeny) and ARM (mostly Cortex A8/A9) chips from several vendors (Qualcomm, Texas Instruments, Freescale, Nvidia, etc.), but also goes into the 3G/LTE chips required for mobile Internet connectivity. The 311-page study provides detailed forecasts of Netbooks and MIDs versus Notebooks and Smartphones (from which they are taking market shares) and the chips that enable them. It profiles the key players and includes 22 figures and 79 tables plus appendix. Details are available at: www.fwdconcepts.com/NetSmart.

LTE chips are emphasized in Forward Concepts' new ìCellular Handset & Chip Market ¥09î study. This totally revised expanded annual market study is an in-depth (594-page) analysis of the top 53 handset makers and provides 2008 market sizes and vendor market shares by air interface. The study also forecasts handset shipments and subscribers by air interface and global region through 2013. And virtually all cell phone integrated circuits and 2008 vendor market shares for each are covered. Chips are also forecast by type through 2013. We believe that this is the most extensive cellular handset and chip study available. Details are at: www.fwdconcepts.com/cell9

As always, I invite your comments.

Will Strauss
President & Principal Analyst
Forward Concepts
wis@fwdconcepts.com