As a tech/semiconductor investor, trying to separate fact from fiction can sometimes feel like a full time job all on its own. In the cellular modem arena, there's absolutely no doubt that Qualcomm (NASDAQ: QCOM ) is far and away the technology and sales leader. However, since this market is incredibly lucrative, it's only natural that competition is working its hardest to try to gain meaningful share in this market. With that in mind, there are a whole slew of companies claiming that they're going to be "the" second source to Qualcomm (since Qualcomm has been shipping multimode data and voice LTE for years). Will the real No. 2 player please stand up?
It's complicated – really!
Broadcom (UNKNOWN: BRCM.DL ) , Marvell (NASDAQ: MRVL ) , and Intel (NASDAQ: INTC ) all claim that they're well positioned to be the No. 2 player and that each is "far ahead" of the competition. Clearly the alarm bells should be sounding off to any investor interested in this space as these companies can't all be right – can they?
It's actually extremely complicated. Intel, today, is shipping its XMM 7160 multimode data and voice LTE solution. It's a discrete part intended for the high end, but it doesn't support many key features such as LTE-Advanced or the TDD mode. Put bluntly, this means that Intel's currently shipping part is still well behind what Qualcomm has integrated today in its MSM8974, and it would be completely useless in, say, China. The company, however, claims that its LTE-Advanced, category 6 modem (called the XMM 7260) complete with TDD-LTE and FDD-LTE, as well as TD-SCDMA support, is on track to ship in first half of 2014.
Broadcom, on the other hand, recently acquired the Renesas Mobile assets, which bought the company a carrier-qualified, ready-to-go apps processor and LTE modem with support for TDD-LTE, FDD-LTE, and TD-SCDMA. While the apps processor really isn't anything to write home about (a dual core Cortex A9 is going to look pretty dated), the modem technology looks compelling although this is a category 4 (150Mbps) modem, while Qualcomm's MDM9x35 and Intel's XMM 7260 will be category 6 (300Mbps).
Finally, we have Marvell, which continues to execute very well on its 3G solutions. On its recent call, it indicated that it was shipping its LTE solutions in Asia today and was undergoing carrier qualification in the US (data is done, voice coming shortly). The company expects to ramp its LTE revenues rather aggressively during 2014.
So, who's the real contender?
It seems to me that, despite protestations that one of these companies will have a "leg up" on the other non-Qualcomm players, the rest of the market will come in at roughly the same time. Intel will probably have the highest end discrete modem solution of the contenders (but will lack a highly integrated part until later), and Broadcom/Marvell will probably prove to be the much more potent players at the low end (along with, of course, the likes of MediaTek and Spreadtrum in Asia).
However, as far as having a "complete" suite of cellular solutions from the lowest end, highly integrated parts to feature-rich, highly integrated high end parts, there still isn't a "one-stop-shop" competitor to Qualcomm. Intel seems to be the best positioned to eventually become Qualcomm's equal when it comes to mobile apps processors and modems, but it will be important to see how quickly Intel can close the gap on all vectors of technology. The other players can aggressively attack the low and perhaps mid-range, but they don't seem too interested in attacking the high end (as developing the custom IP required to play there is very expensive).
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