Clearly, cell phones have become the single largest market for processor silicon, with 2003 shipments north of 450 million units. And everyone is well-acquainted with the fact that the DSP baseband is the heart of every cell phone. But cell phones are also the largest market for RISC cores.
Usually on the same die as the DSP, RISC cores handle the human interfaces of keypad and screen as well as protocols, number storage, PDA and increasing DSP functionality. So-called application processors are being added for multimedia functions like JPEG codecs for still cameras, MPEG-4 codecs for video and MP3/WMA audio.
There are a number of other IC markets that many analysts seem to track only as extensions to their present market venues, including 802.11a/b/g wireless LANs, global-positioning systems and Bluetooth.
Few realize it, but the cell phone is, or will soon become, the largest market for any of these products. For example, driven by vehicle navigation systems, the GPS chip market grew steadily from a million or so annual units in the mid-'90s to the 11 million-unit level by 2002; a very respectable 40 percent compound annual growth rate. But in 2002, GPS chips began noticeably appearing in cell phones, and the cell phone portion of the unit GPS market for 2003 has now passed all other applications combined. This market will reach almost 200 million units in 2007 vs. some 40 million for the other market segments.
The lesson is that the rapid "hockey stick" market jump occurs when a product piggybacks onto cell phones, and one would be wise to understand which chips (and applications) will eventually be ported to cell phones. Of course, fortunes are made in dollars, not units. Once those chips or applications are ported to cell phones, the dreaded commodity pricing sets in.
Currently, GPS chips are separate from the baseband RISC-DSP combo. As geometries shrink and price pressures mount, the non-RF part of GPS functionality will be ported to the baseband die. The same integration will be true of 802.11x, Bluetooth, even application processors.
Clearly, the few chip companies that can address the billion-unit cell phone market expected in 2008 will be the ones that will also dominate the GPS, Bluetooth, WLAN, application processor, MP3/WMA and even camera markets.
Will Strauss is the president of market research firm Forward Concepts in Tempe, Ariz. (www.fwdconcepts.com).