With its new Atom platform launched at CES, the world's biggest chip maker is looking to finally crack the smartphone market at the low end.
IHS expects shipments of low-end smartphones to rise at a compound annual growth rate (CAGR) of 51 percent from 2011 to 2016. The firm expects shipments of high-end smart smartphoens to grow at a CAGR of only 12 percent during the same period.
"In the emerging markets, optimizing the cost/performance balance will be critical for success," Sideco said. Intel will also need to leverage its 2011 acquisition of Infineon's wireless chip unit to ensure that it offers the best solution for low-end smarphones, incorporating both the applications processor and the modem on the same chip, Sideco said.
To date, Intel has made minimal progress in cracking the smartphone applications processor market, which is dominated by Qualcomm. In basebands, Intel ranks third in market share, according to IHS, generating just 8 percent of baseband revenue in the third quarter of 2012, well behind both Qualcomm and Taiwan's MediaTek, according to IHS.
"While Intel dominates the PC microprocessor market, in the smartphone semiconductor business the company has no place to go but up," Sideco said. “And while Intel certainly faces major challenges in achieving the kind of leadership position in mobile handsets it now has in PC semiconductors, the company appears to be serious about building its competitive positioning in the smartphone chip market."
For what it's worth, IHS expects China to remain the fastest growing market for all cell phones, with shipments expected to grow at an 8 percent CAGR from 2011 to 2016. The rest of the Asia-Pacific region is predicted to have a 6 percent CAGR in cell phone shipment growth over the same period, with the EMEA region coming in third at 5 percent, and North America at 4 percent. Clearly, future growth is coming from the emerging regions.