Despite the relative disappointment of the mobile WiMAX equipment market, which generated $1.22 billion in 2009 (a year-over-year increase of only 15 percent), the chipset market exploded in the second half of the year to reach a total of 5 million units shipped in 2009. According to the first issue of the 4GgearTM Quarterly Report from Maravedis, this shipment represents a remarkable 332 percent year-over-year increase and should translate into accelerated device shipments in the first half of 2010.
Beceem announced 1 million units shipped per quarter starting in the third quarter of 2009, reaching an estimated total of 2.5 million mobile chipsets. Beceem is leading the mobile WiMAX chipset market with almost a 50 percent market share. Maravedis also found that Tier 1 chipset vendors captured most of the growth, with the top three mobile WiMAX chipset manufacturers including Beceem, Sequans and GCT accounting for almost 90 percent of the total 802.16e market.
Several factors have impacted the WiMAX chipset manufacturer landscape in 2009, with scale being one of the most critical criteria. Remaining players appear to have the funding to survive through 2010, however consolidation will occur going forward and that may precipitate mergers/acquisitions before funding runs dry.
One technical trend we have observed in 2009 was the sampling of more integrated chipsets--RFIC and base-band functions merged, or base-band and NPU subsystem integration, or even WiMAX and WiFi MAC and PHY designed on the same die. All of these choices lead to the same goal: reducing overall cost of the chipset and platform to meet the pressure on WiMAX device price.
Finally, we found that 802.16e owns the lion's share of overall worldwide chipset shipments as described in the figure below.
In terms of strategy, we have seen a shift toward LTE technology; Beceem, Sequans, Altair, Comsys and Wavesat have announced LTE chipsets. Some have been demoed (Altair, Comsys and Wavesat's units) and others will follow in the second quarter of 2010 (Sequans) and the fourth quarter of 2010 (Beceem).
Surprisingly, there are already many players in the LTE base-band chipset landscape: incumbent manufacturers (Qualcomm, ST-Ericsson and Nokia), new entrants who position themselves as technology drivers (LG Electronics and Samsung Electronics), and newcomers who leverage their OFDM expertise (Altair, Beceem, Comsys, Sequans and Wavesat).
However, Maravedis estimates that early LTE chipset suppliers may not be the long-term winners in the dual-mode 3G/4G chipset market. We believe that few among the WiMAX chipset newcomers are currently seeking to be acquired in the near term. Furthermore, diversified product entrants such as LG Electronics and Samsung Electronics have no evident long term LTE chipset roadmap. Maravedis also believes that the development of the LTE modem itself is not the most complex aspect of the global LTE picture. Interoperability, seamless hand over, architecture expertise and management of the different bands across the world may be the most challenging obstacles facing LTE chipset suppliers.
This first issue of the 4GgearTM Quarterly Report confirms that both WiMAX and LTE are converging upon 4G service capabilities. LTE's primary market, incumbent 3G operators, will be unlikely to significantly deploy LTE sooner than early 2012. While LTE appears to have the decisive volume advantage, the lag between 3G evolution and the next generation mobile network will greatly benefit HSPA deployments and improve WiMAX's growth in the near term.
4GgearTM is an ongoing research and analysis service focusing on technology and business trends among the leading equipment vendors for LTE, WiMAX and selected proprietary systems.
Pascal Deriot is a senior analyst and partner for WiMAX and LTE Equipment at Maravedis, and has over 20 years of multidisciplinary experience in the mobile handset business, including semiconductors, cellular phones and wireless technologies. Maravedis is a premier global provider of market intelligence and advisory services focusing on 4G and broadband wireless technologies, regulation and markets, including LTE, WiMAX, femtocells, chipsets, radio access network, core network and backhaul. Learn more at www.maravedis-bwa.com