Acquisitions and dissolutions shuffle the mobile market deck

Late last month, Intel quietly acquired Tempe, Arizona-based Fujitsu Semiconductor Wireless. To my knowledge, no news announcement has been made, but this is a very important move for Intel as Fujitsu Wireless had developed probably the most advanced multimode LTE RF transceiver available in the open market. The operation traces its lineage through Freescale Semiconductor, the previous owner, and earlier Motorola Semiconductor. Intel has acquired a truly seasoned technical staff, now probably their most experienced U.S.-based wireless talent.

Why no news release? I suspect that Intel was not eager to embarrass its former-Infineon staff in Germany, which has been the major player in 2G/3G RF transceivers and has shipped a multimode LTE RF transceiver (but not an LTE modem) in selected Motorola Droid smartphones.

The new Intel operation’s latest RF transceiver product includes advanced features like antenna tuning and envelope tracking. With its internal DSP that also supports smart antennas, device support for any application processor is accommodated (even an x86 … wink, wink). The team has been busy working on the next-gen LTE-Advanced solution preparing for Carrier Aggregation designs.

Renesas Mobile post Nokia-Windows partnership

You may recall that in mid-2010 Renesas Electronics Corporation acquired Nokia’s wireless modem operation and added the group to its new subsidiary, Renesas Mobile Corporation. Renesas Electronics had licensed the Nokia modem since 2009 and the two companies had been working together to develop an industry-leading HSPA+/LTE platform.

Unfortunately for Renesas Mobile, Nokia decided to throw its future into the arms of Microsoft’s Windows Mobile OS. But the only way Nokia could bring Windows Mobile to market quickly was to employ Qualcomm’s readily available modem and application processor platform (Snapdragon). It appears that move cost Renesas Mobile its biggest modem customer. Moreover, Renesas Mobile was never able to find another big customer for its own worthy multimode LTE modem that I mentioned in my last newsletter.

Renesas Electronics tried to sell the Mobile subsidiary, but there are few companies who are big enough to afford absorbing the substantial wireless design staff that would go with such an acquisition. After all, the major smartphone companies already have committed modem chip relationships: Apple, HTC, and Nokia with Qualcomm; Samsung with Samsung Semiconductor; Intel with its own newly minted modem operation, etc. There are probably a dozen Chinese companies who would love to have the Renesas Mobile technology, but most aren’t big enough to absorb the Renesas headcount. That leaves licensing of the IP as probably the remaining viable option for Renesas.

The future of the ST-Ericsson split

Now that Ericsson owns the modem properties and STMicroelectronics (STM) owns the application processor product line of the former merged company, I’ll make some quick observations:

Ericsson’s modem business has reverted to what used to be called the Ericsson Mobile Platforms (EMP) division. EMP was a leading supplier of complete 3G baseband/RF platforms to the handset industry before the ST-Ericsson (STE) merger, rivaling what was then Infineon Technologies.

Ericsson is still shipping standalone TD-SCDMA modems in China (11 percent market share in 2012), GSM/EDGE modems (9 percent share in 2012), and WCDMA/HSPA+ modems (2 percent share in 2012). However, Ericsson now has a very worthy multimode LTE modem and RF transceiver product – the latest “Thor” part of the STE “NovaThor” combined product.

Ericsson’s best near-term prospects will be to provide LTE/TD-SCDMA modem/RF transceivers that can appeal to China Mobile’s many prospective smartphone suppliers. Those smartphone suppliers can get application processors on their own (or maybe buy them from STM). Better yet, Ericsson should consider adding LTE to the NovaThor 9240 integrated dual-core com-processor approach for China’s TD-SCDMA market (licensing IP for the AP from STM?).

STM now retains the “Nova” part of the ambitious STE combined product, namely the ARM-based application processor product line. Although the prospects of getting an STM application processor in a major smartphone are dim (who doesn’t already have one?), at least STM can employ the device in other multimedia devices, including the automotive market, where they have better prospects. Or, they can partner with Ericsson for the China Mobile market, mentioned above.

As always, I encourage your feedback.

Will Strauss, President & Principal Analyst

Forward Concepts