Broadcom got out of the cellular baseband business in mid-2014 because it was losing $2 million per day staying in that market, which is dominated by Qualcomm, Intel, MediaTek and others, according to CEO Scott McGregor.
Even though Broadcom is exiting the cellular baseband market, CEO Scott McGregor thinks the company will have a secure place in high-end smartphones thanks to its Wi-Fi chipsets.
Ericsson is exiting the wireless-modem business and will most likely slash about 1,000 jobs as a result. The decision comes as pricing pressure builds in the stand-alone-modem business and more device makers choose to buy system-on-a-chip solutions with modems married to application processors, which Ericsson does not offer.
Broadcom said it will cut 2,500 jobs, about one-fifth of its total workforce, as part of a winding down of its cellular baseband chipset unit. The company made the announcement Tuesday in conjunction with its second-quarter earnings.
Ericsson is not giving up on the market for smartphone modems, but it will have a steep hill to climb to challenge industry leader Qualcomm.
Broadcom is exploring whether to sell off or wind down its cellular baseband business, an acknowledgement of the difficulties it has had in catching up in the LTE market and the dominance of rival Qualcomm in the baseband market.
Qualcomm and Apple competed fiercely for the top spots among chipset makers for smartphones and tablets in 2013, according to new reports from research firm Strategy Analytics. However, Qualcomm maintained its strong lead among baseband chip suppliers thanks to its dominant position in the LTE market, the research firm found.
LAS VEGAS--Qualcomm remains the market leader by far in the cellular baseband market, and in LTE chips in particular. However, its chipset rivals made clear this week at the 2014 Consumer Electronics Show that they are intent on using 2014 to close the gap on Qualcomm when it comes to LTE.
The first products with Nvidia's Tegra 4i chipset, which combines the company's application processor with an LTE modem, will be rolling into the market in the first half of next year, but likely will not be aimed at the U.S. market, according to CEO Jen-Hsun Huang.
Nvidia announced its first chipset integrating LTE modem technology and its Tegra application processor into a single piece of silicon, its first major attempt to catch up to the likes of Qualcomm in terms of providing integrated chips for smartphones.