Tuesday, April 24, 2012

Current status of China's mobile Internet application processor market

BEIJING, CHINA: In 2011, the global sales revenue of mobile Internet terminal application processors reached $7.71 billion, representing a 49.7 percent year-on-year increase. The sales revenue of smart phone application processors totaled $6.8 billion in 2011, taking up 88.2 percent of the overall market.

Meanwhile, Qualcomm topped all brands with a sales revenue of $3.5 billion and a 45.4 percent market share, followed by Apple, with a 23.6 percent market share and TI with a 16.6 percent 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 CAGR of 37 percent.

China has become a global manufacturing base for mobile Internet terminals
China outputs more than 60 percent 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 percent 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 five years, China's mobile Internet terminal application processor market will maintain the momentum of growth, with a CAGR of 40.5 percent. 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.

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