Where am I going with all of this? Machine-to-machine (M2M) data transfer/connectivity. Important is Apple's expansion of the on-board, wireless and cellular chipsets from the original WiFi, Bluetooth, to now include WiFi + 4G capabilities for selected carriers through the Long Term Evolution (LTE) standard, especially. Why is this so important? There has, for a number of years now, been quite a bit of back-and-forth over standards for improved and increased cellular data transmission, with no final agreement yet made and roll-outs of solutions still quite varied.
What we do know and see is that the staggering increase of both smartphone users and the data traffic they create is on the rise. It is not just that smartphone and smart wireless device (SWD) growth continues to dominate the industry and keep us well into positive territory. Mobile data, the product of these SWD users, is a very important present and future growth driver for the semiconductor and electronics industry as a whole; one that has a pervasive reach both horizontally (throughout our industry's sectors) as well as vertically (across multiple business sectors, e.g., health, logistics, financial services, etc.) for products, components, and services. As the 1March 2012 Credit Suisse report detailing takeaways from Mobile World Congress (MWC), not only were over 40 smartphone devices launched at MWC, there was a notable increase in multi-core processors with added LTE chipsets, a mobile communication standard. According to Credit Suisse, "On the LTE side, Qualcomm noted that they expect LTE to be around 1/3 of its chipset volumes exiting FY2012." (ibid., p.5)
Why is LTE an important point for M2M? Well, as the same Credit Suisse report points out, expectations from handset OEMs as well as analysts are that we will see the following growth:
- "5x as many smartphone users in 2016.
- Total data traffic on mobile networks globally to be 10x higher by 2016.
- 74% of time spent by smartphone users is on non-voice related services."
Use patterns for smartphone, and the broad SWD community, are high on mobile data transfer (upload, download, M2M communication & services, etc.) and the present challenge is in how to not only meet current bandwidth demands, but be able to handle the expected volumes to come. The solution comes in alternative transmission options, such as 4G carried over LTE.
Apple's new iPad importantly features an LTE chipset as part of its wireless component design and dual-core A5X SoC processor. Putting LTE in front during Wednesday's presentation of the new iPad, also puts LTE in front of the ongoing discussion over mobile data solutions and standards. Apple's choice will certainly further push LTE into the forecasted double-digit expansion that iSuppli sees for 4G LTE in 2012:
"Factory revenue for the mobile communications market in 2012 is projected to reach $398.0 billion, up 17 percent from $340.8 billion last year. […]
Within the space, mobile 4G handsets this year will account for just $21.7 billion of total mobile market revenue, but its growth in 2012 represents an astonishing 372 percent increase from 2011 revenue of $4.6 billion. […]
Led by principal player Apple Inc. with its market crushing iPad device, the tablet space in 2012 is forecast to produce $61.0 billion in revenue, up a remarkable 71 percent from $35.7 billion last year, based on 2012 production of 129.1 million tablet units, up from 64.7 million units."
The opportunities for significant growth from mobile data transmission and devices continue to be strong, and the path forward to 4G just received an important push from Apple. Understanding the ramifications of mobility and mobile data on the semiconductor and electronics industry is the topic of this year's Special Series in Smith's MarketWatch Quarterly (free subscription available), and a detailed discussion of LTE and of complex chipsets supporting such capabilities will be found later this month in the upcoming MarketWatch Quarterly.