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Qualcomm Still No. 1 in App Processors, Basebands

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Qualcomm (Nasdaq: QCOM  ) continued to dominate the smartphone application processor and cellular baseband markets in the first quarter, according to research firm Strategy Analytics. However, on application processors, the research outfit noted that NVIDIA (Nasdaq: NVDA  ) broke into the top tier in terms of revenue share.

According to Strategy Analytics, global smartphone application processors revenue skyrocketed 108 percent year-over-year growth in the first quarter to reach $1.68 billion. Qualcomm, Texas Instruments, Samsung, Marvell and NVIDIA rounded out the top five chipset vendors in the market in the first quarter.

Qualcomm's total revenue in the first quarter clocked in at $3.88 billion, up 46 percent from its $2.66 billion from the year-ago period. The company does not break revenue out by segment, but Strategy Analytics estimated that the company's Snapdragon processors accounted for 22 percent of Qualcomm's total smartphone processor shipments in the first quarter and helped the company to maintain its average selling prices.

"2011 is proving to be a highly competitive year for applications processor vendors as smartphone OEMs are opening up their supply chains to multiple vendors. In addition, the smartphone market continues to fragment into multiple tiers, favoring those vendors with broad processor portfolios," said Strategy Analytics analyst Stuart Robinson. "Strategy Analytics continues to believe that these dynamics will influence applications processor rankings in the next few quarters."

In-Stat analyst Jim McGregor said Qualcomm needs to continue to release newer and better chipsets to stay ahead of the competition. "They need to be on par or faster than the competition," he said.

Texas Instruments, which counts Nokia (NYSE: NOK  ) as one of its largest customers, reduced its expectations for its second quarter due to Nokia's own reduced guidance. "They are obviously facing more competition now than they have in the past, but that hasn't stopped them getting designs," McGregor said of TI. "Like everyone else, they have to be competitive."

McGregor added that he thinks NVIDIA will rise in the rankings this year even though it has only a handful of smartphone design wins shipping in volume right now. He also said that NVIDIA's recent purchase of wireless chipmaker Icera signaled that NVIDIA wants to have an integrated application processor and baseband solution. "People in the handset market are taking them seriously," he said.

Meanwhile, Strategy Analytics said the cellular baseband market grew 20 percent in the first quarter to reach $3.5 billion. Qualcomm, bolstered by strong presence in CDMA, W-CDMA and LTE, led the way, and Broadcom, Intel and Spreadtrum continued to do well, the research firm said. Strategy Analytics said that MediaTek and ST-Ericsson both showed negative revenue growth in the first quarter.

This article originally published here. Get your wireless industry briefing here.

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The Motley Fool owns shares of QUALCOMM. Motley Fool newsletter services have recommended. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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