Revenues for core semiconductor components used in mobile handsets, including platform ICs and wireless connectivity ICs, are expected to reach almost $37 billion per annum in 2012. The market has seen strong growth from 2009 as the smartphone market has increased significantly, driving growth for many components, including applications processors and Wi-Fi ICs.
The cellular M2M market will rise from about 110 million cumulative connections globally in 2011 to roughly 453 million cumulative connections by 2017. Nevertheless, a key challenge for the industry remains the complexity of developing, deploying, and managing M2M applications over the cellular network.
ABI Research has determined that the cellular handset market shipped 353.5 million handsets in Q1 2012 which represents a -3.8% YoY and -16.5% sequential drop in shipments. The smartphone market delivered 142 million shipments in Q1 for a 38% YoY gain and a -8.1% sequential decline. Apple’s 35.1 million shipments were supported by APAC while Samsung’s 83.4 million displaced Nokia from the top position that it has held for over a decade.
The market for RFID transponders, readers, software, and services will generate $70.5 billion from 2012 to the end of 2017. The market was boosted by a growth of $900 million in 2011 and the market is expected to grow 20% YOY per annum. Government, retail, and transportation and logistics have been identified as the most valuable sectors, accounting for 60% of accumulated revenue over the next five years.
Global capital expenditure weakened in 4Q2011 for many mobile operators as they trimmed their budgets for the remainder of 2011. However confidence is returning in the first half of 2012 as operators start to switch over from LTE trial to commercial service in a number of markets. “Mobile capital expenditure is forecasted to grow 9% to US$111.1 billion in 2012, supported by renewed investment in radio access network (RAN) infrastructure and in-building wireless access,” says Jake Saunders, vice president of forecasting.
Wireless equipment vendors performed well in the fourth quarter of 2011. While finishing strong in the last quarter of every calendar year is typical for vendors in this market, Huawei exceeded expectations and overcame Nokia Siemens Networks (NSN) to grab second place in the market. As usual, Ericsson was the market leader, with approximately US$3.5 billion in wireless network equipment sales during 4Q2011.
Mobile device semiconductors were one of the few bright spots in a chipset market that stalled in 2011. Revenue from chipsets designed for mobile devices increased by more than 20 percent to $35 billion, while the total semiconductor market limped out of 2011 with just 2 percent year-on-year growth.
Global handset shipments will increase 29 percent from 1.7 billion in 2012 to 2.2 billion in 2016. The key driver of this growth will come from the smartphone segment, which is forecast to become larger than the ultra-low cost, low-cost, and feature phone segments combined by 2016. The total shipments of non-smartphones will grow 1.08 billion in 2012 to 1.09 billion in 2016 while smartphone shipments will grow from 643 million to 1.1 billion over the same period.
The M2M market is largely characterized by cellular module shipments and connections. China’s cellular connection revenue, which constitutes more than one-third of the Asia-Pacific’s (APAC) M2M market, is expected to grow from $642 million in 2011 to $2.76 billion in 2016.