CCID Consulting: Trends of Chip Demands for New Mobile Phone Applications

CCID Consulting: Trends of Chip Demands for New Mobile Phone Applications

BEIJING, April 25 /Xinhua-PRNewswire/ -- With the slowdown of mobile phone sales and output worldwide, the development of mobile phone applications and the structural upgrading of the mobile phone itself now exert a growing impact on the mobile phone chip market. Taking mobile phone applications as the base, this article, written and researched by CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong, will focus on an analysis of its impact on the chip market and forecast probable trends in this area.

High performance and low cost are two parallel trends. Consumers now demand higher mobile phone functions, and the smart phone is gradually winning favors in the market. In 2006, smart phones accounted for 13% of the total mobile phone sales volume in China. But in 2005, the figure was only 5%. In the next few years, smart phones which integrate picture-taking, music, business-oriented capabilities, and games into one body will continue to develop fast. Chips with fast data processing speeds are the necessary hardware components for mobile phones to achieve the above functions. This is particularly true of baseband and application processor chips. In future developments, mobile phone application processors will pursue higher frequencies to integrate all kinds of handheld applications into mobile phones, making them just like CPUs.

Apart from high-end smart phones, mobile phone chipmakers, particularly mobile phone platform developers, paid the most attention to ultra low-cost mobile phones in 2006. TI and NXP both introduced solutions for ultra low-cost mobile phones. There are two main reasons for this. First, given the current mobile phone population, low prices can allow mobile phones to expand into new markets. These include the low-end market in China, and underdeveloped regions of Africa, India and the Middle East. In addition, in line with the trend of general chip technology integration, ultra low-cost mobile phones are the embodiment of mobile phone chip integration. Compared with high performance chips, low-end mobile phone chips are also developing along parallel paths of 'small size' and 'high performance'. The only difference is that one emphasizes integration first and performance later, while the other emphasizes the reverse order.

Multimedia application chips continue to grow, while wireless connections upgrade. As far as mobile phones are concerned, taking photos, playing music and having FM capabilities are no longer luxury functions. In recent years, the multimedia mobile phone has been a favorite in the mobile phone market. Driven by this market trend, major progress has been made in mobile phone chips with multimedia functions, such as image-sensing IC, image-signal processing, video processing, audio decoding, chord IC and FM tuner. In addition, some more advanced applications such as GPS, mobile phone TV and E- payment have also started to appear in mobile phones. Though the market is rather small at present, these applications will give rise to a fast-growing chip market.

Increased output of multimedia mobile phones also pushes the growth of wireless connection chips forward. In general situations, mobile phones with music and photo functions carry the wireless connection mode. Wireless connections are the main way to transmit photos or other files. Currently, the cost of the Bluetooth chips is falling, while Bluetooth earphones are spreading. Compared with infrared, Bluetooth offers the advantages of fast communication speed and short transmission distance. Bluetooth is now one of the main players for obtaining wireless connections in mobile phones. Bluetooth chips now account for over 60% of the wireless connection market. In the next few years, Wi-Fi chips will be a new application growth point in the wireless connection field. Wi-Fi will be widely used in notebook computers. As the technology matures and the size becomes smaller, Wi-Fi will start to migrate to handheld equipment. With the increase of wireless access points and the penetration of wireless LANs into households, building Wi-Fi chips into mobile phones will become a future trend.

3G applications have put forward higher requirements for chips. The commercial use of 3G in China is approaching. In the next few years, 3G applications will become a favorable factor for the growth of mobile phone chips. Compared with 2G mobile phones, 3G's advantage lies in that it raises the downlink to 384kbps from 128kbps. Multimedia is the best 3G application. The realization of 3G will first drive up the growth of the multimedia chip market. Besides, 3G applications will also push forward the upgrading of mobile phone base chips, in areas such as power management and storage. Because 3G users will use mobile phones to get network services over long hours, it will encourage chipmakers to adopt increasingly advanced power source management technology to meet the growing power consumption demand. Meanwhile, baseband and radio frequency chips will need to have lower and lower amounts of power consumption. Increased information volume and complicated operating systems have even increased the demand for storage space. For ROM, RAM and built-in or external storage cards, it will be easy to upgrade capacity when 3G applications become widespread. In addition, the diversity of 3G standards and the coexistence of 2G and 3G networks will provide market space for mobile phone chips that support multi-network applications.

About CCID Consulting

CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

Based on four major competitive areas of powerful data channels, industrial resources, intense knowledge and deep understanding of information technology, CCID Consulting provides customers with consulting, research and IT outsourcing services covering strategy planning, IT application, marketing strategy, human resources and information technology outsourcing. Our customers range from industrial users in IT, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks.

CCID Consulting is committed to becoming the No. 1 brand for strategy consulting, the No. 1 consultant for enterprise management and the No. 1 expert in market research. For more information, please visit our website at http://en.ccidconsulting.com/.

For more information, please contact:

Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
Tel: +86-10-8855-9080
Email: liuyan@ccidconsulting.com

Source: CCID Consulting Co., Ltd.

CONTACT: Cynthia Liu, Coordinating Manager of CCID Consulting Co., Ltd,
+86-10-8855-9080, or liuyan@ccidconsulting.com

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