Forecasts for mobile continue to demonstrate strength for the mobile industry in 2013, specifically for Tablet MPUs and Cellphone Application MPUs which IC Insights' latest report forecasts as leading the product categories that will "exceed the 6% growth rate forecast for the total IC market this year."
Demand strength broad and deep
According to the report, one of the broad market drivers for the forecasted mobile IC growth rests in Internet connectivity demand by consumers and enterprise professionals. Importantly, beyond the smart wireless device (SWD) demand are the important demand drivers from two sectors, once niche but now growing significantly; namely, demand for embedded applications in medical electronics and eHealth solutions, as well as the growing demand in automotive for "intelligent car systems."
Traditional SWD market demand is not abating though, despite discussions of approaching market saturation points for devices, particularly among early-adopters in mature economies. According to a recent IHS iSuppli report, the opportunities from increased 4G LTE adoption is set to drive RF component growth. The five-year compound annual growth rate (CAGR), from 2010 to 2016, for the combined commodity group of RF components that include power amplifiers, duplexers and switches is for 60% growth, from US $3.5 billion in 2010 to a forecasted US $5.6 billion by 2016. Importantly, as IHS iSuppli underscores, there will be both pros and cons to the component supplier market based on decisions by handset manufacturers:
With handsets moving further into an RF environment requiring support of multiple technologies and numerous frequency bands, handset manufacturers will have to decide if they wish to use discrete components—or pursue an integrated approach. The speed at which the LTE spectrum is standardized will also play an important role, as RF component manufacturers cannot effectively create integrated products until the current spectrum of possibilities are reduced.
Smartphones not set to wane yet
It is important to contextualize the oft-cited projection that smartphones are reaching saturation points. While certainly true for the mature markets, the global market forecast indicates continued growth with "smartphone share […] set to rise to 72 percent in 2016 as the devices become more affordable to the world at large," according to another recent iSuppli report. This report projects a year-over-year smartphone increase of 27% in 2013 rising to 834 million units over the 655 million units shipped in 2012; followed by a continued increase to 1.3 billion units by 2016. The reasons for this continued increase is the demand for increased, highly portable Internet access from any location, a feature central to smartphones.
Additional support for smartphone growth is also seen in the anticipated rise in demand for machine-to-machine (M2M) communication handled by SWDs. As a result of these forecasts, baseband chip manufacturers are, like the RF component sector, forecasted to see significant growth during 2013 and through 2016.