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Report: Smart phones drive mobile chip market

Posted: 22 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:CCID report? mobile chip market? smart phones?

The Semiconductor Industry Research Center of CCID Consulting found that compared to the last quarter, production of mobile phones slowed down in Q1, but developments in high-end products such as smart phones are expected to drive output upwards by the end of 2007.

Driven by the high output in 2H 2006, mobile phones saw a 45.7 percent rise in output, the fastest since 2002. After the high growth at the end of 2006, mobile phone makers in China entered a traditional period of reduced growth in early 2007. Mobile phone output in Q1 fell to 112.9 million sets from 125.4 million sets in the previous quarter.

However, the mobile phone chip market did not fall so notably, due to the increased percentage of high-end application mobile phones such as smart phones and music phones. Integrating application functions such as music, photo, information processing and mobile interconnection is the natural development trend for personal information terminals, while smart phones are the best carriers to achieve these functions.

As the smart phone market becomes more mature, the percentage of smart phone in the mobile phone output has also gradually risen. Meanwhile, there is a continuous drop in the price of smart phone chips. This has attracted end consumer groups to take up the high-end market of non-smart phones. Driven by these dual factors, smart phone chips have started to enter a period of fast growth from one of application kick-off. In the future periods of time, the smart phone chip market will become the driving force for the mobile phone chip market.

The mobile phone's growing internal memory capacity is also a growth point in the chip market. The storage of multimedia data has rather high requirements for storage capacity. With the penetration of camera, HD video and music functions amidst high pixel mobile phone, phones with low capacity no longer satisfy customer's application demands.

In the past few years, multimedia application mobile phone basically relies on attached storage card to expand their storage capacity. As the price of NAND flash drops, there is a trend of rise in mobile phone's built-in storage capacity. In addition, the approaching commercial use of 3G in China will also become a favorable factor for driving up the growth of the mobile phone chip market.

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