As the amount of data moving over wireless networks grows, so does the demand for the chips that generate and process that data. Strategy Analytics estimates that sales of smartphone applications processors surged to $2.2 billion in the third quarter, up 30% from the second quarter and up 59% from the year ago quarter. The market for smartphone applications processors is now about a fifth the size of the market for desktop processors, which was $10.7 billion in the third quarter, according to IDC, up 12.2% from the second quarter.
Qualcomm (Nasdaq: QCOM) now has almost 50% of the smartphone applications processor market, said Sravan Kundojjala, senior analyst at Strategy Analytics. “Qualcomm has become the company to beat in the mobile chip market and is moving far ahead of most of its competitors,” he said. Qualcomm has succeeded in the fast-growing market for stand-alone applications processors with its Snapdragon chipsets, used in millions of smartphones including Nokia’s new Windows 7.5 phones (the Lumia 800 and 710).
Strategy Analytics says Samsung ranked No. 2 in the overall market for smartphone applications processors and No. 1 in the market for stand-alone smartphone applications processors. Samsung has a ready market for its chips in the Samsung Galaxy handsets. Texas Instruments (NYSE: TXN) was No. 3, followed by Marvell (Nasdaq: MRVL) and BroadCom (Nasdaq: BRCM), which replaces Nvidia in the No. 5 spot. “We continue to believe that BroadCom has the potential to be a strong competitor to Qualcomm in the long-term, given the company’s integration capabilities, cellular IP strength and strong emphasis on wireless markets,” says Stuart Robinson, director of Strategy Analytics Handset Components Technology service.
Prices of smartphone applications processors trended upward in the third quarter, according to the report, thanks to strong growth in dual-core processor shipments.
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