Dual core and quad core processors made the headlines at the recently concluded Mobile World Congress held from 14-17 February 2011. Amidst the frenzy of announcements and product launches, one noteworthy announcement by Marvell Semiconductor Inc (Marvell) received scant attention. Euromonitor International assesses the impact of Marvell’s announcement on the mobile phone market.
Marvell announced the acquisition of Kinoma Inc, a little known mobile media software company, at the recent Mobile World Congress. Kinoma offers a software platform that can be installed on mobile devices as an OS and could also run on other OS platforms like Windows Mobile and WebOS.
Marvell, a chipset supplier to mobile phone manufacturers, now offers a total solution (hardware and software) for original equipment manufacturers (OEMs). Previously, manufacturers had to debug and iron out conflicts and bugs caused by the integration of hardware and software. Manufacturers now have a complete turnkey solution to churn out smartphones in record speed and spark a worldwide onslaught of low-cost smartphones.
The global mobile phone market is worth US$179 billion in 2011 and is projected to grow by 13% between 2011 and 2013, in constant value terms. Alongside global companies like Nokia, Samsung, Apple and Motorola, most of the emerging markets like China, India and Russia have their own local manufacturers competing for a slice of the mobile phone pie.
The chipset market is a little less crowded with only Qualcomm, Broadcom and Marvell dominant players. Silicon design is investment and time intensive and, therefore, poses a much higher entry barrier than the manufacture of mobile phones.
Qualcomm has enjoyed a headstart in the smartphone chipset market with its range of SnapDragon processor powering smartphones manufactured by HTC, Motorola and LG. Taiwan-based MediaTek, offered their customers reference design, software and chipsets which enable manufacturers a quick and fast solution to manufacture entry level mobile phones.
The turnkey approach helped MediaTek garnered a loyal band of low cost, China-based mobile phone manufacturers and was infamously credited with selling mobile phones without International Mobile Equipment Identity (IMEI). IMEI is a unique identity allocated to every mobile phone.
The IMEI number can be used to stop a stolen phone from accessing its network. Marvell is betting on its legitimate, turnkey solution to help leapfrog the company over its competitors in the fast growing and high value smartphones market.
Choice of OS will eventually no longer matter
Marvell’s foray into an already crowded OS ecosystem dominated by Apple’s iOS, Google’s Android and Microsoft’s Windows Phone does not bear well for the fledging OS; Kinoma offered by Marvell. The current obsession with OS is tied to apps, where inter-operability between platforms is not possible. In addition, developers are not keen to write codes for their apps for different OS as a result of resource constraints.
As mobile broadband networks become more stable and gain higher download speeds, consumers just need to be connected to the internet to run an app. OS will not play as important a role in the consumer’s buying decision as they do now. Marvell’s Kinoma offers manufacturers a quick and low-cost option to launch affordable smartphones critical to success in emerging markets.
Network operators will be keen to see low-cost smartphones which they can offer to their customers without heavily subsidising the phone and tying the customers to expensive data plans. Euromonitor International expects to see manufacturer selling prices (msp) of smartphones being halved to US$99 by the end of 2011.