Nalini Muppala

Analysis, observations, perspectives on mobile space

Infineon: Wireless Strengths

leave a comment »

Infineon is a formidable force in RF transceivers and is one of the predominant baseband suppliers. Forward Concepts ranks them #3 globally in total baseband (2G, 3G). Although Infineon’s visibility increased tremendously after design wins in the iPhone, it has been a longtime supplier of RF solutions to LG, Nokia, Samsung, and Sony-Ericsson. The company shipped its billionth RF transceiver in November 2007.

Infineon rightly predicted early on that handset market would polarize towards low-cost devices and high-end smart phones. Providing single-chip platforms for low cost phones is a forte of Infineon. The investments paid off. Infineon earlier this year shipped its 100 millionth single-chip solution. The technical superiority of this platform received a strong vote when Nokia chose Infineon as a baseband supplier for its EDGE platforms. Infineon competes directly with ST-Ericsson for low-cost phone designs.

High-end phones from Apple and RIM have been using Infineon’s 3G baseband and RF solutions. LG, already a big customer of Infineon’s single-chip phone platform for low-cost devices, announced the coming of a slew of smart phones in the next 18 months. Alongside ST-Ericsson, Infineon is likely to have scored some design wins for some of these phones.

On the Winning Side

The wireless semiconductor space has witnessed an abundance of activity in the past few years. On some occasions, winners were picked based on technological prowess. On others, winners were picked just by virtue of past associations. There were other times when action taken by others enriched or depleted a company’s revenue. Infineon was on the winning side, mostly.

– Infineon is one of the companies that stand to gain from the consolidation in baseband market. Acquiring LSI mobility gave it a strong foothold in the baseband space and some top handset makers as customers. Infineon is just one of four companies to have more than a 5% share of the baseband market. Infineon now boasts of supplier relationships with several major handset vendors.

– Nokia’s multi-sourcing strategy gave more power to Infineon, which is among those players poised to gain from TI’s exiting the merchant baseband business.

– Not long ago, Motorola held the second spot among top handset makers. Samsung then displaced Motorola. Thanks to Infineon acquiring LSI mobility, Samsung is now a major customer of Infineon’s HEDGE solution. Samsung’s market share gains will translate in part to Infineon’s gaining market share.

– Handset market polarization towards low-cost phones and high-end smartphones matches Infineon’s strengths well.

Is this a coincidence or strategic thinking on Infineon’s part? Either way, it augurs well for sustained growth of the company’s WLS division.

Lost 3G at Nokia

Infineon used to supply just GSM platforms to Nokia which, at the time of diversifying its sourcing vendors, extended the relationship and added Infineon as an EDGE platform supplier. Nokia is known to have thoroughly evaluated various vendors before picking suppliers for various technologies. Not wanting to repeat the mistake of putting all its eggs in TI’s basket, and with Infineon already supplying GSM and GPRS parts, Nokia chose not to source 3G parts from Infineon. Instead, Broadcom and Qualcomm were chosen to provide Nokia’s 3G baseband needs. Interestingly, Infineon licenses its 3G stack to Broadcom. This is a loss due to strategic more than technical reasons.

Innovation

Infineon announced improved versions of all of its single-chip solutions. These integrate baseband, power management, RF transceivers, FM radio and in some cases media players and external memory card support. Packing its renowned strengths in baseband, power management, and RF into a single solution results is an offer that is hard to resist for any cost conscious phone designer. Although most of these are meant for the GSM and EDGE markets, such tightly integrated platforms will have a good uptake in price-sensitive 3G markets that do not demand all the bells and whistles of advanced phones.

Infineon announced developing a Software Defined Radio platform, XMM™ SDR 200, that can support multiple standards using the same baseband part. It gained a design win for use in satellite/terrestrial hybrid phones from SkyTerra and TerreStar. While this could go the way of earlier announced GSM/Wi-Fi mobile platform, the SDR platform with its low power consumption might be a hint of things to come.

In sum, Infineon continues to be a strong player in RF transceivers, baseband, and phone-on-a chip platforms for low-cost phones. In the next post, we will continue with the portfolio analysis and concentrate on what ails Infineon’s wireless business.

[Originally for Sramana Mitra on Strategy.]

Advertisements

Written by Nalini Kumar Muppala

October 2, 2009 at 10:50 am

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s