Chipset makers turn to low-cost Chinese smartphones for boost

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Chipset manufacturers, faced with maturing markets and weaker economic conditions in the United States and Europe, are increasingly turning to low-cost smartphones in China to goose their sales.

Qualcomm (NASDAQ:QCOM), Broadcom and other silicon vendors are hoping to get into devices that sell for around $160. Even though such devices often generate lower margins, the increased sales could help fatten chipset makers' revenues.

"We're continuing to waterfall our technology down into the mass market tier," Rob Chandhook, president of Qualcomm Internet Services, told reporters at the Computex show this week, according to Reuters. The company said it will begin breaking down its Snapdragon S4 chipset into different market segments.

Broadcom is also banking on mass market smartphones to help it gain a larger foothold in the overall market. In February Broadcom unveiled a 1 GHz processor based on ARM Holdings architecture aimed at mass market smartphones running Android 4.0. Additionally, MediaTek, the fabless Taiwanese chipset maker better known for its massive presence in the 2G baseband market, unveiled a similar smartphones processor platform at around the same time.

Although the United States has been one of the world's hottest smartphone markets during the past few years, according to IDC it will likely be surpassed by China by the end of this year--although only by a hair.

"It's still a very good outlook for them because we think there is still a large pool of feature phone users who haven't had their first smartphones," IDC analyst T.Z. Chuang told Reuters. "These phones will be the first route for these people to upgrade."

For more:
- see this Reuters article
- see this The Verge article

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