Samsung gains in handset applications processor chips courtesy of iPhone, says iSuppli
Samsung Electronics in the second quarter expanded its share of the global market for standalone applications processor chips used in handsets due to rising sales of Apple's iPhone, according to iSuppli.
The South Korea-based electronics giant accounted for 15.9% of global revenues from sales of standalone applications processors that are used in high-end smartphones and feature phones, keeping it in the market's number-two spot. This was up nearly one percentage point from 15.1% in the first quarter.
iSuppli defines standalone applications processor as digital signal- or logic-based processors not integrated with the digital baseband function that are optimized for and dedicated to supporting high-level operating systems as well as the processing of images, third-party applications and other multimedia content.
"Since the introduction of the first model in January 2007, Samsung has occupied the key applications processor slot in Apple's iPhone line," said Francis Sideco, principal analyst, wireless communications, for iSuppli. "With the new 3GS model allowing the iPhone to gain share in the smartphone market, Samsung also is claiming a larger portion of standalone applications processor shipments."
Just as it did in the previous iPhone models, the 3GS introduced in June integrated a Samsung processor based on the advanced RISC machines (ARM) architecture. The processor accounted for US$14.46, or 8.4%, of the materials cost of the iPhone 3GS based on pricing in late June.
"The partnership between Apple and Samsung on the applications processor in the iPhone has been a major coup for Samsung, establishing it as a player in the market, and allowing it to challenge the incumbent leader, Texas Instruments (TI)," Sideco said.
"While there is a lot of speculation as to whether Apple's acquisition of PA Semi will change the parameters of this partnership, for now at least, Samsung's applications processors have enjoyed a secure position in the product line.
Apple announced its purchase of PA Semi in March 2008.
Apple's share of global smartphone shipments has been on the rise throughout 2009, partly due to the strong acceptance of its new 3GS model. The iPhone accounted for 13.9% of global smartphone shipments in the second quarter, up from 10.1% in the first quarter, according to Tina Teng, senior analyst, wireless communications, for iSuppli.
Samsung's gains in applications processor share do not perfectly correlate with growth in iPhone unit shipments due to variations in the average selling price and the lead time between shipments of the chips and the end products.
Standalone applications processors tend to be used in higher-end models of smartphones and feature phones that require greater computing power to run more sophisticated software. Mass-market smartphone models generally integrate their applications processors into the baseband chips, which is a less costly approach.
"With the value of smartphones increasingly tied to the content found in apps stores, there is a rising premium placed on the applications processing power of these phones," Sideco said. "This will cause shipments of standalone applications processors to continue to increase."
Notwithstanding Samsung's strong showing, Japan's Renesas Technology actually achieved greater market-share gains than Samsung in the second quarter, with its portion of applications processor revenues rising to 12%, up from 9.6% in the first quarter. While this rise was partially due to fundamental demand, most of the increase was generated by inventory replenishment. Semiconductor inventories in Japan plunged in the first quarter as chip suppliers cut production to adjust to rock-bottom demand levels.
Although it lost some share to Samsung in the second quarter, TI retained its dominant position in the market, with a share of 24.4%.
"TI continues to lead the market on the strength of its open multimedia application platform (OMAP) line of applications processors," Sideco said.
iSuppli: Top-5 suppliers of standalone applications processors, 1Q09-2Q09
1Q09 rank
2Q09 rank
Company
1Q09 market share
2Q09 market share
1
1
Texas Instruments
27.0%
24.4%
2
2
Samsung Electronics
15.1%
15.9%
3
3
Renesas Technology
9.6%
12.0%
4
4
Marvell Technology Group
7.7%
7.4%
5
5
STMicroelectronics
5.7%
6.6%
Top-5 companies
65.1%
66.3%
All others
34.9%
33.7%
Total
100.0%
100.0%
The South Korea-based electronics giant accounted for 15.9% of global revenues from sales of standalone applications processors that are used in high-end smartphones and feature phones, keeping it in the market's number-two spot. This was up nearly one percentage point from 15.1% in the first quarter.
iSuppli defines standalone applications processor as digital signal- or logic-based processors not integrated with the digital baseband function that are optimized for and dedicated to supporting high-level operating systems as well as the processing of images, third-party applications and other multimedia content.
"Since the introduction of the first model in January 2007, Samsung has occupied the key applications processor slot in Apple's iPhone line," said Francis Sideco, principal analyst, wireless communications, for iSuppli. "With the new 3GS model allowing the iPhone to gain share in the smartphone market, Samsung also is claiming a larger portion of standalone applications processor shipments."
Just as it did in the previous iPhone models, the 3GS introduced in June integrated a Samsung processor based on the advanced RISC machines (ARM) architecture. The processor accounted for US$14.46, or 8.4%, of the materials cost of the iPhone 3GS based on pricing in late June.
"The partnership between Apple and Samsung on the applications processor in the iPhone has been a major coup for Samsung, establishing it as a player in the market, and allowing it to challenge the incumbent leader, Texas Instruments (TI)," Sideco said.
"While there is a lot of speculation as to whether Apple's acquisition of PA Semi will change the parameters of this partnership, for now at least, Samsung's applications processors have enjoyed a secure position in the product line.
Apple announced its purchase of PA Semi in March 2008.
Apple's share of global smartphone shipments has been on the rise throughout 2009, partly due to the strong acceptance of its new 3GS model. The iPhone accounted for 13.9% of global smartphone shipments in the second quarter, up from 10.1% in the first quarter, according to Tina Teng, senior analyst, wireless communications, for iSuppli.
Samsung's gains in applications processor share do not perfectly correlate with growth in iPhone unit shipments due to variations in the average selling price and the lead time between shipments of the chips and the end products.
Standalone applications processors tend to be used in higher-end models of smartphones and feature phones that require greater computing power to run more sophisticated software. Mass-market smartphone models generally integrate their applications processors into the baseband chips, which is a less costly approach.
"With the value of smartphones increasingly tied to the content found in apps stores, there is a rising premium placed on the applications processing power of these phones," Sideco said. "This will cause shipments of standalone applications processors to continue to increase."
Notwithstanding Samsung's strong showing, Japan's Renesas Technology actually achieved greater market-share gains than Samsung in the second quarter, with its portion of applications processor revenues rising to 12%, up from 9.6% in the first quarter. While this rise was partially due to fundamental demand, most of the increase was generated by inventory replenishment. Semiconductor inventories in Japan plunged in the first quarter as chip suppliers cut production to adjust to rock-bottom demand levels.
Although it lost some share to Samsung in the second quarter, TI retained its dominant position in the market, with a share of 24.4%.
"TI continues to lead the market on the strength of its open multimedia application platform (OMAP) line of applications processors," Sideco said.
iSuppli: Top-5 suppliers of standalone applications processors, 1Q09-2Q09
1Q09 rank
2Q09 rank
Company
1Q09 market share
2Q09 market share
1
1
Texas Instruments
27.0%
24.4%
2
2
Samsung Electronics
15.1%
15.9%
3
3
Renesas Technology
9.6%
12.0%
4
4
Marvell Technology Group
7.7%
7.4%
5
5
STMicroelectronics
5.7%
6.6%
Top-5 companies
65.1%
66.3%
All others
34.9%
33.7%
Total
100.0%
100.0%
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