The advent of LTE Advanced networks and the further introduction of 64-bit chips and semiconductor process technology improvements are all expected to drive the global smartphone applications processor market to $30 billion in revenue in 2018, according to a new forecast from research firm Strategy Analytics.
The firm, which rarely publicly releases forecasts, expects the smartphone apps processor market to have a 10.8 percent compound annual growth rate in revenues from 2013 to 2018. Strategy Analytics forecasts that stand-alone applications processor penetration in smartphones will drop to 28 percent in 2018 from 38 percent in 2012. That will be largely due to the likes of Qualcomm (NASDAQ:QCOM), MediaTek, Spreadtrum, Broadcom and Marvell, the research firm said. Such vendors generally integrate their apps processors with modems. Further, firm said that multi-core smartphone applications processors are expected to be in virtually all smartphones in 2018, up from around 50 percent in 2012.
"Strategy Analytics forecasts that the 64-bit chip penetration in smartphone applications processors will rise from 3 percent in 2013 to approximately 75 percent in 2018," Strategy Analytics analyst Sravan Kundojjala said in a statement. "Apple (NASDAQ:AAPL), Intel, Qualcomm and Samsung among others will drive this growth. Strategy Analytics believes that 64-bit chip adoption will be somewhat slower than multi-core chip adoption in smartphones as the required software ecosystem transition is likely to take time."
Some of these trends were on display Monday when Qualcomm announced its new high-end chips, the Snapdragon 810 and 808 processors, which are 64-bit enabled, LTE-equipped chipsets. They both use Qualcomm's Category 6 LTE Advanced multimode modem, which supports 3x20 MHz carrier aggregation, enabling speeds of up to 300 Mbps. The chips are anticipated to begin sampling in the second half of 2014 and expected to be available in commercial devices by the first half of 2015.
However, Intel is likely going to continue to make inroads in smartphones, according to Strategy Analytics analyst Stuart Robinson. He noted in a statement that Strategy Analytics forecasts smartphone chips based on designs from ARM Holdings will drop to 83 percent in 2018 from almost 100 percent in 2012. This will be largely due to "concerted efforts by Intel in smartphones combined with the company's lead in 14-nm and beyond process technologies. Strategy Analytics believes that upcoming 3 /4G integrated products from Intel could lift the company's smartphone applications processor share in the near-term."
Meanwhile, the firm thinks the tablet applications processor market is set to grow to $7.2 billion in 2018, and register CAGR revenue growth of 14.6 percent from 2013 to 2018. The firm noted that the barrier to entry is "quite low" in tablet applications processors compared to smartphone applications processors, and that it predicts a modest average selling price growth through 2018, despite the introduction of 64-bit chips. Additionally, the high concentration of low-cost tablet chip vendors in will result in a price war that is expected to have a significant impact on ASPs, the firm said.
- see these two Strategy Analytics releases
Qualcomm makes a statement with 64-bit, octa-core chip
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