Wireless Industry Analyst

[Originally for Sramana Mitra's site]

In the last two parts of this series, I looked at TI’s position in the analog and DSP markets. We also concluded that the OMAP was central to TI’s wireless strategy. I am afraid that TI has put all its eggs in this one basket, and has perhaps miscalculated the strengths of its competition, especially the new entrants. And the result? It has all but lost its dominance in the wireless market and also the golden chance to make the best of the mobile revolution.

Before we look at the outlook for TI’s wireless business, let us step back to look at some of its current statistics. About $2bn of TI’s 2007 revenues were from 3G with the 3G OMAP alone accounting for $500mn. Custom chips that TI manufactures for the likes of Nokia accounts for most of the rest. Let me reiterate again now that these custom-chips, that make TI the largest 3G chipset vendor at more than 50%, do not have its IP for the baseband. For more relevant statistics, I will direct the interested reader to the earlier articles of this series here and here.

Also, TI has consciously stayed away from developing 3G digital baseband. I think that this is a mistake. I believe that baseband is the most important part of the 3G chip. This contrasts TI’s position that the application processor is the heart of the phone. I do agree that 3G is about the experience – the music you hear, the TV you watch, the games you play, the high-resolution still images and videos you capture are all integral to tomorrow’s phones and will be enabled by the application processor. But what good is it if your mobile data and internet experience is bad? Unlike voice, data will hog bandwidth and limit the network’s capacity effectively reducing user throughputs. So it serves the mobile user well to get a phone with a good baseband processor with well-implemented advanced receivers.

This segment is intended to add context to the next two parts where I discuss TI’s wireless strategy. It is important that you digest these points before proceeding so you can get a holistic perspective of TI’s position in wireless.