Qualcomm, Inc. (NASDAQ: QCOM) continues to press ahead in the LTE race as it is seeing excellent results from its 20 nanometer chip tape-outs. Moreover, the company is planning multiple tape-outs of 16 nanometer parts at its primary foundry.
In the $5 billion LTE baseband market, competitors lag behind the company, which makes CDMA chips that power the leading smartphones and tablets. Qualcomm had 97 percent share of the LTE baseband market in the first quarter and a 59 percent share of the baseband market overall, according to Strategy Analytics. The other players in the market include Intel (12 percent) and MediaTek (10 percent).
"While we understand some of Qualcomm's largest competitors are moving down nodes as well, we believe that Qualcomm's positive early results from both 20 and 16 nanometer node developments are constructive and combined with their extended lead in LTE, bode well for their longer term outlook," Deutsche Bank analyst Brian Modoff wrote in a client note.
As of now LTE competition is likely delayed until 2015. In other words, competitors could continue to lag with LTE, with volumes not likely until 2015. Mediatek suggests it will have an LTE baseband by the first quarter of 2014, but this will only be a discrete, single mode LTE chipset. A true multimode chipset will likely not be ready until the latter part of 2014, and a lot of work remains between now and this target.
With regard to Broadcom Corporation (NASDAQ:BRCM), the company is struggling with its LTE multi-mode effort, and the shipments are not expected until the back half of next year at the earliest, as well.
"With Broadcom, our checks suggest that they could attempt to introduce a working product at CES, at the beginning of 2014, but this will be the same modem that Renasas tried to market unsuccessfully at Mobile World Congress earlier this year," Modoff wrote.
Intel Corporation (NASDAQ:INTC) is considered Qualcomm's other formidable competitor. Intel is now shipping an LTE-enable! d chipset into the Samsung's Galaxy Tab 3.
Though this is a step in the right direction, it is still a data-only modem and the whole solution is put into a battery-rich tablet. In terms of actual design wins with LTE-enabled phones, there appears to be little traction so far as Intel continues to struggle with each the Atom processor, the multi-mode modem and the transceiver.
Although Intel has recently bolstered its capabilities with two separate purchases of older Motorola assets, there is still work to be done with both of these. The company released a stand-alone LTE chipset earlier in the year that was not well-received by handset OEMs.
While the Infineon 2G/3G/HSPA modem is operational and has been for some time, the ongoing issue seems to be the integration of this with the single-mode based LTE modem.
"As for Intel, there are still questions as the company is attempting to pull together multiple assets from various acquisitions," Modoff noted.
Meanwhile, Qualcomm is making progress on its RF 360 franchise. Qualcomm RF360 front end integrates every RF component - universal power amplifier, antenna switch, envelope power tracker, dynamic antenna tuner and the industry's first 3D-RF packaging - into a single RF Front End that's engineered to support multiple 3G/4G LTE standards. It enables OEMs to design thinner, battery friendly devices that deliver higher performance using less power.
Management has suggested that their front-end chipset will ship in a top-tier handset by the end of this year. Setting semantics aside, this first generation will not be meaningful to revenues, but the next iterations would boost revenues.
"As Qualcomm releases its second and third generation, we believe it will be incremental to the top-line and evidence of their ability to continue to increase their share of handset content," Modoff added.
Further, the company continues to make good progress on its efforts to develop 28 nanometer RF front ends, with first products samples targeted for the end of next year.
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