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Mobile phone market study finds 3G up, older technologies down
Apr. 11, 2005

Forward Concepts has released an in-depth study of the worldwide market for cellphones, and the chips that go into them. The 560-page report forecasts handsets, chips, device manufacturers, and service operators, and notes that Texas Instruments remains the dominant supplier of cellular chips but is experiencing growing competition from Freescale.

The report finds that 2004 cellphone shipments reached 715 million units, including inexpensive PHS/PAS (Personal HandyPhone Service / Personal Access System) units in China. 2005 sales are expected to increase by only 4.5 percent to 746 million units as demand for older technologies drops, offsetting strong gains by newer technologies. Forward expects TDMA shipments to drop 30 percent this year and even GSM should see a 23 percent decline.

On the other hand, cellphones supporting newer high-bandwidth technologies are expected to see sharply higher shipments. The report anticipates the following sales increases in newer technology cellphones:
  • EDGE -- up 51 percent to 60 million units
  • WCDMA -- up 165 percent to 45 million units
  • CDMA2000 1xEV-DO terminals -- up 65 percent to 16 million units
  • PHS -- up 24 percent to 77 million units
The 2G PHS is being rapidly displaced in Japan by newer technologies but is gaining ground in China, Taiwan, India and other countries owing to its low cost.

TI top processor supplier, Freescale gaining ground

According to the report's principal author, Carter L. Horney, Texas Instruments remained "the number-one cellular chip provider, overall, and also the number-one provider of baseband chips for both 2G and 3G/UMTS cellular. And, with their OMAP2 application processor, they have quickly become number one in that market segment as well."

But Horney warns that TI's position could be threatened by Qualcomm, which still dominates the CDMA market and has a large number of design-ins for its UMTS baseband chips. "Freescale Semiconductor had a very good year in 2004 and is also gaining ground in the cellular chip market," says Horney.

"The cellular handset has become the physical and market magnet that is pulling in the functionality of digital cameras, PDAs, MP3 players, GPS navigation, Bluetooth, and even Wi-Fi, and is quickly becoming the dominant market for each and all of these functions and more," said Will Strauss, president of Forward Concepts.

The report, "Global Cellular Handset & Chip Markets" is priced at $3,750 in hard copy form.



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