CCID Consulting: Current Status of China's Mobile Internet Application Processor Market
In 2011, the global sales revenue of mobile Internet terminal application processors reached $7.71 billion, representing a 49.7% year-on-year increase. The sales revenue of smart phone application processors totaled $6.8 billion in 2011, taking up 88.2% of the overall market. Meanwhile, Qualcomm topped all brands with a sales revenue of $3.5 billion and a 45.4% market share, followed by Apple, with a 23.6% market share and TI with a 16.6% market share. As the global mobile telecommunications network has entered the three-generation (3G) era and is evolving towards LTE, the demand for terminal products will continue growing with the expansion of mobile terminal software and application services. It is predicted that by the year 2016, the size of the global mobile Internet application processor market will reach $37.23 billion, with a compound annual growth rate of 37.0%.
Figure 1 Size and Growth of Global Mobile Internet Terminal Application Processor Market, 2007-2011
Source: CCID Consulting, March 2012
China has become a global manufacturing base for mobile Internet terminals.
China outputs more than 60% of the world’s smart phones. As mobile Internet terminal manufacturing is labor-intensive, overseas terminal manufactures like Apple, Samsung, Nokia and Motorola have either set up factories in China or sought help from EMS enterprises such as Foxconn and Eastcom, in order to minimize production cost. As a result, China's mobile Internet terminal sector has witnessed a rapid growth in output.
Driven by the output surge, the size of the domestic mobile Internet terminal application processor market further expanded to reach RMB 32.81 billion in 2011, rising 232.9% year-on-year. In addition, new trends have emerged in the market: the output of terminals is seeing an explosive growth, the operating system is gaining more influence, and the domestic enterprises are enhancing their strengths.
In the next 5 years, China's mobile Internet terminal application processor market will maintain the momentum of growth, with a compound annual growth rate of 40.5%. It is expected that the market size will reach RMB 179.59 billion by 2016; wherein, smart phone application processors will still take up a major market share.
Figure 2 Forecasts on the Size of China's Mobile Internet Terminal Application Processor Market (By Sales Size; Unit: RMB 100 Million)
Source: CCID Consulting, March 2012
Competition intensifies in China's mobile Internet application processor industry.
As tablet PCs and smart phones are moving to provide the same functions and therefore have similar requirements for application processors. As a result, the smart phone application processor manufacturers have also began to supply the tablet PC market, among which are major manufactures including Qualcomm, Apple, TI, Samsung, Marvell, Nvidia, Broadcom, VIA, Intel, Rockchip, VIMC-US, infotMIC, Amlogic, etc.
Several years ago, China's mobile Internet terminal application processor market was dominated by transnational semiconductor giants. However, since 2011, domestic manufactures such as RockChip and Yingfangwei have already launched their own mobile Internet application processors. The involvement of more and more manufactures will further intensify the competition in the market. Although overseas manufactures firmly grab the high and middle-end application processor market leveraging their advanced technologies and resources, Chinese manufactures still hold unique advantages in cost, energy efficiency and performance. With rapid development of the middle and low-end mobile Internet terminal products, domestic enterprises will maintain a significant position in the market in future.
About CCID Consulting Co., Ltd.
CCID Consulting Co., Ltd., the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Xi’an, Wuhan and Nanjing with over 300 professional consultants. The company’s business scope has covered over 200 large and medium-sized cities in China. CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services, investment and financing, and M&A. The company's customers range from government departments at all levels and diversified industrial parks, to industrial users in strategic emerging industries in new generation information technology, energy saving and environmental protection, biological science and technology, high-end equipment manufacturing, new materials, and new energy. CCID Consulting commits itself to become the No. 1 advisor for urban economy, the No.1 consultancy for enterprise management, and the No. 1 brand for informatization consulting in China.
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