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China-based fabless firm chases non-Apple market

Posted: 05 Apr 2013 ?? ?Print Version ?Bookmark and Share

Keywords:tablets? apps processors? fabless?

EE Times correspondent Junko Yoshida recently interviewed Actions Semiconductor CEO Zhenyu Zhou to talk about the company's strategy of focusing on supplying chips for portable consumer electronics such as MP3 players, boom boxes and gaming devices that do not bear the famous Apple imprint.

Seeing Actions Semiconductors' headquarters in Zhuhai might come as a shock to anyone who has already written off Actions as a shrinking chip company in the diminishing MP3 player market.

By Silicon Valley standards, Actions' campus and the main building designed to house its 614 employees are massive. Actions today designs chips for mobile audio (automotive, boom box and MP3), mobile video and mobile Internet device (tablet), with a clear focus on portable consumer electronics.

Actions Semiconductor's 10-year history, however, is a microcosm of the failures among first-generation China fabless companies. But under new management, Actions has also proven its resilience, as it pursues opportunities in new markets such as media tablets.

Actions' ability to compete in an already crowded apps processor market remains to be seen. But it hopes to take advantage of its business focus on a vast network of whitebox vendors!many also located in the Pearl River Delta near Actions' HQ.

Actions' stated strategy is to go after the so-called "non-Apple" market.

Whether it's MP3 players, boom boxes, personal video/game devices or tablets, the company claims that the available market for such non-Apple products is nothing to sneer at. The company estimates the non-Apple product market compatible with Actions chips reached $660 million last year. That total in 2013 is expected to jump to $920 million, the company estimates.

Actions, traditionally known as an MP3 player chip vendor, took on China's rapidly growing tablet market in earnest only last year!several quarters after China's two leading apps processor vendors!Rockchip and Allwinner!established their dominance.

Still, Zhenyu Zhou, Action's CEO, remains optimistic. He believes that in today's booming tablet market, competition remains volatile. Actions' goal is to take a 10 to 20 per cent share in media tablet apps processors, said Zhou.

Among challenges the company faces is the hard reality of competitive pricing and lowering margins. Actions also must decide on potentially big investments in connectivity technologies!including the cellular basebands that the company currently lacks.

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