Nomura has recently released a massive infographic on tablet components (via Tech Trader Daily), and it contains a treasure trove of information on the various component suppliers (and investable opportunities) within. The analysts estimate 2012 market shares for crucial ingredients, as well as other fun facts about where the market may be heading.
Let's dig in and break down what it means for investors, but more importantly look at the big winners.
NVIDIA
While there's a trend toward increased integration among mobile device manufacturers, particularly on the processor front, NVIDIA (NVDA +3.04%) came out on top among third-party chip makers. Apple (AAPL +0.33%) and Samsung comprise 75% of total processor units since the two utilize in-house chips. Apple gobbled up most of the processor market, but only because the iPad uses its A-chips that aren't available to other vendors.
Beyond Apple and Samsung, NVIDIA was the top processor provider.
|
Applications Processor Provider |
2012 Market Share Estimate |
|---|---|
|
Apple |
60% |
|
Samsung |
15% |
|
NVIDIA |
13% |
|
Texas Instruments (TXN 1.08%) |
8% |
|
Qualcomm (QCOM 0.86%) |
4% |
Source: Nomura.
NVIDIA found its Tegra chips in big wins like Google's (GOOG 1.67%) Nexus 7 and Microsoft's (MSFT +1.50%) Surface RT, while TI powers Amazon.com's (AMZN 0.73%) Kindle Fire lineup. Qualcomm didn't score any high-profile tablet wins in 2012, but its Snapdragons power some Windows 8 tablets.
Qualcomm
What Qualcomm lacks in processor wins, it makes up for in other areas. The mobile chip giant flexes its muscles when it comes to areas like baseband processors, where it still boasts considerable advantages.
|
Component |
2012 Market Share Estimate |
|---|---|
|
Power management integrated circuit |
30% to 35% |
|
Baseband and transceivers |
70% |
|
GPS |
55% |
Source: Nomura.
Intel (INTC 0.11%) was a distant second in the baseband market with just 15% market share.
Broadcom
Wi-Fi combo chips are dominated by Broadcom (NASDAQ: BRCM), similar to the smartphone market. But the company also has a strong position in the touchscreen microcontroller market.
|
Component |
2012 Market Share Estimate |
|---|---|
|
Touch controller |
60% |
|
Wi-Fi combo chip |
70% to 75% |
|
GPS |
35% |
Source: Nomura.
Broadcom also emerged as a tablet winner in 2012.
OmniVision
The majority of the image sensor market went to OmniVision Technologies (NASDAQ: OVTI), which took home 50% to 55% of the market. Second up was Samsung with 15% to 20%, as the South Korean conglomerate likes to use its own backside-illuminated sensors in its tablets. Sony (SNE 1.58%) came in third with 10% to 15% of the market.
Nomura even estimates that OmniVision's sales have the second-highest exposure to tablets among component vendors, with an estimated 19% of sales last year coming from the form factor.
Cirrus Logic
The audio codec sector went mostly to Cirrus Logic (CRUS +1.35%), garnering between 50% and 55% market share. Wolfson Micro and STMicroelectronics (STM 0.39%) trailed by a large margin. Cirrus Logic has long been a favorite Apple component play, and its tablet share in 2012 shows why.
The iPad advantage
Since the iPad defines the tablet category and represents the majority of unit sales, any supplier that can score spots in Apple's device has an immediate advantage and is effectively guaranteed plenty of volume. That fact inevitable skews some of these market share figures in favor of iPad suppliers.
You can tell immediately from looking at the application processor figures, since Apple was 60% of the market even though it doesn't sell its A5X or A6X processors to anyone else. However, you can also see that pan out in other component areas.
OmniVision has been spurned from iPhone image sensor wins for the past two years, but its consolation prize was that it scored the image sensor spot in iPads, even if Apple is using slightly older sensors in its tablets. Broadcom provides numerous touchscreen microcontrollers in iPads that drive the larger display as well as the Wi-Fi combo chip. Cirrus Logic has long been Apple's go-to vendor for audio codecs. That's why you'll notice these three companies took home the lion's share of each respective component market: because they were enjoying their iPad advantage.
