Despite solid Q3 results reported by Spreadtrum, a technology analyst has lowered his rating for Spreadtrum to "hold" from "buy".
3. The rise of entry-level smartphones
smartphone market segment is emerging as “a strong catalyst” for large numbers
of China Mobile subscribers “to switch from their older 2.5G handsets
to TD-SCDMA smartphones for the next several years,” Li predicted.
4. What about EDGE smartphones?
Q3, Spreadtrum saw an increase in demand for its EDGE smartphone
chip set. But demand for EDGE smartphones is not necessarily in
China, observed Li. It “is coming from the overseas handset market
where 3G networks aren't yet fully deployed," adding, “Early EDGE smartphone demand is now shifting to low-cost TD-SCDMA.”
5. Open market strategy
Mobile is now instituting a new policy calling for an "open market," Li said. The operator expects handset distribution through open-market
channels to increase from a small number this year to 50 percent in 2013.
CEO believes “this will make low-end smartphones broadly available in
diverse retail channels where Chinese consumers buy mobile handsets.”
6. China Mobile’s LTE plan
is expecting a surge in Chinese consumer demand for LTE to hit in 2014. Commercial deployment of TD-SCDMA is expected to be hampered by limited network coverage. Spreadtrum
qualified a single-chip TD-LTE/TD-SCDMA
and EDGE modem with China Mobile earlier this year. That version doesn't support WCDMA.
In 2013, Spreadtrum hopes to launch a single-chip LTE modem supporting
TD-LTE, SCD-LTE, TD-SCDMA, WCDMA and EDGE. China Mobile
is requiring that all TD flavors be supported in LTE modems.
7. Spreadtrum beyond TD-SCDMA
Spreadtrum is believed to hold more than 50 percent of the TD-SCDMA
smartphone market. However, it faces challenges as it seeks to expand its global
market share. The keys to Spreadtrum’s next leap are the success of its
pending WCDMA products and broader acceptance of its smartphone
platform that includes an integrated modem/apps processor.
Li acknowledges that Spreadtrum's WCDMA products have yet to catch on. "We are
going to start the sampling in Q1  and I think Q2, no later than
Q3, I hope, we’re going to start shipping WCDMA smartphones.”
Baseband business is very competitive, hence margin pressure is bound to happen, this was the main reason TI shifted to this business. In TD, Marvell, Mediatek and Qualcomm are major competitors for Spreadtrum.