Smartphones and tablet computers are the most popular mobile devices today, outselling personal media players (PMPs), e-book readers, personal navigation devices (PNDs), and other single-function devices. All of these mobile devices require an advanced processor that supports a sophisticated user interface and various applications.
These mobile processors, like the devices they serve, are evolving rapidly. To enable faster web browsing and better performance for the latest mobile games, almost all of the newest processors support two or more CPUs. Within the next year, some high-end processors will support peak speeds over 2.0GHz, allowing the next generation of mobile devices to encroach on the performance level of low-end PCs. Most mobile processors can display and record high-definition (HD) video; some can handle 3D video content as well. To support console-like games, they include powerful 3D-graphics accelerators (GPUs) that consume a growing share of the semiconductor real estate.
We divide mobile processors into two types. Standalone application processors serve as the main CPU in a mobile device, running the operating system and application software; they accelerate multimedia tasks and connect to displays and cameras. Integrated smartphone processors combine the application processor and cellular baseband on a single chip.
We estimate that 551 million processors shipped into smartphones in 2011, the second straight year that the market has grown more than 60%. We expect shipments to climb to 732 million processors in 2012 as smartphones account for 37% of all handset shipments. The smartphone market is on track to exceed one billion units per year by 2015.
More than half of all smartphones used an integrated processor in 2011, and we expect this share to increase again in 2013 and beyond. Integrated processors reduce system cost and are more appropriate for low-end and midrange smartphones, segments that are growing rapidly.
Excluding these integrated processors and in-house designs from Apple and others, shipments of third-party standalone application processor (AP) chips totaled 248 million in 2011. Increasing shipments of non-Apple tablets will help push AP shipments to 310 million units in 2012. Because of higher volumes in smartphones, along with a rising average selling price (ASP) as tablets displace low-cost e-readers, total application-processor revenue grew by 79% in 2011, exceeding $2.0 billion.
Qualcomm is the leading vendor of mobile processors, powering more smartphones (30% in 2011) than any other processor supplier. We expect Qualcomm to gain another 2% market share in 2012. The company has benefited from the trend toward integration, and its Snapdragon family appears in smartphones such as the HTC One S, LG Optimus LTE2, and Samsung Galaxy S III. Qualcomm’s Krait CPU allows the company to differentiate itself from processor vendors relying on standard CPU cores from ARM.
Texas Instruments (TI) has been a dominant supplier of application processors, but the company’s market share dropped to 8% in 2011. Its OMAP processors appeared in popular phones such as the Palm Pre and Motorola Droid, and its OMAP4 earned high-profile wins in tablets such as the Amazon Kindle Fire and the Barnes & Noble Nook. With OMAP5 processors targeting a speed of 2.0GHz, we expect TI to have an early performance lead over other vendors (such as Samsung) that rely on ARM’s Cortex-A15 CPUs running at a lower clock rate.
Nvidia gained notoriety and many high-end design wins by being first to market with a dual-core application processor, Tegra 2. The company was also able to achieve an early-mover advantage with its quad-core Tegra 3. Nvidia’s Tegra 3 gained a number of design wins, including smartphones such as the HTC One X and tablets such as the Google Nexus 7. Nvidia does not offer integrated smartphone processors, but that will change as Tegra incorporates baseband technology from its Icera acquisition.
Samsung has rapidly expanded its processor business through use in its own phones and tablets. Its Exynos products deliver leading graphics performance, and the Exynos 5250 will be one of the first Cortex-A15 processors to reach the market. With its third-generation Atom processor (Medfield), Intel has finally broken into the smartphone market, winning designs at Motorola and ZTE. The company’s more powerful Cedar Trail processor targets Windows 8 tablets.
Broadcom has established a low-end presence with its BCM21553 processor and plans to expand its product lineup later this year. MediaTek is also gaining ground at the low end with products like the MT6577. Marvell’s TD-SCDMA products have gained significant share at China Mobile, but its UMTS products are not competitive in performance and data rates. Struggling financially, ST-Ericsson has retrenched its mobile-processor business to focus only on mainstream smartphones with its U8500 family. Freescale is addressing e-readers and other niche markets with its new i.MX6 processors.
The application-processor market has become crowded with new entrants from the baseband and multimedia markets. Although an application processor can be easily assembled by licensing an ARM CPU and some multimedia accelerators, vendors are differentiating on the basis of CPU performance, GPU performance, video capabilities, solution size, power efficiency, and software support. This report examines the announced products using these metrics to determine the best choices for each type of mobile device.