Wireless Industry Analyst

As highlighted in our discussion of ST Microelectronics financials, the company has not been very profitable in the last few years. More importantly, it has been growing lesser than the semiconductor industry and losing market share. It is therefore appropriate to peek into the steps that the company has taken to address this situation.

In my previous article on convergence, I discussed the mobile baseband radio. While the WAN capability is most important, it also needs to be complemented by the so-called connectivity solutions. WiFi, bluetooth, GPS, FM and mobile TV have increasing penetration in the higher-end phones and will be a part of the convergence devices of tomorrow.

WiFi can facilitate seamless mobility for your voice call while also offloading internet browsing from the cellular network when you are near a wireless hotspot. WiFi can be used in conjunction with cellular systems today to enable fixed-mobile telephony convergence (FMC). There are dual mode handsets that can offload the burden on cellular networks, address in-building coverage issues and also switch your call seamlessly between the Wide-Area Network (WAN) and the Local Area Network (LAN).

Bluetooth as a short-range wireless technology has carved itself a niche, especially in the headset market. Legislations mandating in-car hands-free driving is one of the trends that will drive bluetooth penetration into mobile devices. The bluetooth standard has been improved to handle more sophisticated use cases such as stereo audio and high-speed data transfer. While some use cases overlap with those of WiFi, the audio profiles of bluetooth will find a unique place in the convergence movement.

GPS will help enabling location-based services (LBS). Like the GPS companies would like to say, tomorrow will not just be about when but also about where. GPS will be part of most if not all mobile devices in five years. Qualcomm has been bundling GPS with its chipsets for a while now with the hope that LBS will become more important that the mandatory E911 services. You can also look at GPS in your convergence device as the merger of the PND with the mobile phone. Garmin is attempting just that with its Nuvifone.

Mobile TV, for me, is perhaps the least exciting of the major convergence devices components. The reason is display. Display technology today is a far cry from enabling a good TV experience in your hand-held. Realizing this impediment, companies like Qualcomm are investing in display technology. High quality displays such as Qualcomm's Mirasol along with features such as retractable thin screens and a wide network coverage can help change the picture (pun intended).

FM will also become a staple. Besides these technologies, we can also think of Zigbee, RFID, UWB as other candidate radios that can convergence in your mobile device. These may come as part of a second wave that will seek to converge home networking as well.

Convergence for me is more relevant from a technology provider perspective. As I alluded to in my previous convergence article, innovative ideas and use cases have always existed. But it is only now that form-factor reduction and power consumption research have caught up with the human mind which generates creative mobility ideas. These technological advances coupled with increased attention to usability have made mobile convergence possible. One of the key effects of these improvements is the inclusion of more radios into the hand-held. So, it will be illustrative to look at the wireless components of convergence along with use cases.

The heart of the convergence device will be the mobile radio. We have the rapidly proliferating 3G standards that combine voice with reasonable speed data services. On one side, we have the Wideband CDMA (WCDMA), and its evolution namely High Speed Data Packet Access (HSDPA), HSPA, HSPA+. On the other hand, we also have the Data Optimized CDMA evolution standard (CDMA1x EV-DO).

Looking ahead, the industry talks of 4G wireless as well. Today, we have two main 4G standards, namely 3GPP Long-term evolution (LTE) and Worldwide Interoperability for Microwave Access (WiMAX.) LTE is the 3GPP evolution path beyond the HSDPA standards. WiMAX, promoted as THE wireless broadband solution, received a reprieve in the US recently as Sprint finally decided the tie the knot with Clearwire. While mobile WiMAX will have to share the pie with LTE, fixed WiMAX can offer backhaul wireless broadband services as the panacea for the emerging markets.

The transition from 3G to 4G has to be preceded by the maturity and monetization of the existing and future 3G infrastructure. It appears that the 3G networks are slowly ramping up as data becomes a more prominent differentiator in the developing markets. These networks will mature in the next couple of years and thrive for five years or so before slowly being replaced by Orthogonal Frequency Division Multiple Access (OFDMA) based 4G technologies that promise much higher data rates and hence more service possibilities.

Keep in mind that from a convergence device perspective, mobile broadband is the key technological driver. So, the cellular baseband modem that is complemented by the Wide Area Network (WAN) coverage from the wireless service providers becomes central to such a device.

[Originally for Sramana Mitra's site]

In the last two parts of this series, we looked at Marvell’s position and strategy in the wireless connectivity solutions market. These solutions serve another important purpose - to make Marvell’s cellular and handheld products competitive and complete. In this part, we will take a look at whether Marvell can successfully leverage its acquisition of Intel’s XScale business to create another line of business that will see the 20% growth that the management envisions.

Marvell offers the Monahan family of application processors based on the XScale architecture. It also offers baseband communication processors that are capable of GSM, GPRS, EDGE and WCDMA. Its solutions are part of the Motorola Q, Motorola ROKR2 and RIM Blackberry Pearl among other phones. Another notable product is the Samsung i780 that features its PXA310 application processor with Qualcomm’s MSM6200.

Marvell today commands about 25% of the mobile application processor market next to TI, but does not have as much of a play in the baseband market. The Santa Clara-based company sampled an integrated single-chip solution with HSDPA data capabilities and an application processor last year. Marvell hopes to see ramped up volume production and revenue in the second half of this year.

‘Tavor’, as this single-chip solution is code-named, will hold the key to Marvell’s ability to retain the RIMM account moving forward. Moving forward, Marvell hopes to grow with RIMM that commands around 50% of the smart-phone market share. This will be contingent on RIMM retaining its market share and also Marvell delivering competitive baseband solutions. You can read about competing baseband solutions here. ‘Tavor’ will also help Marvell retain its application processor market share as competitors move towards similar single-chip solutions.

Marvell also aims to bring smart-phones into low-cost mainstream leveraging its core competencies. CEO Sehat’s comments on the company’s GPS strategy further ratify this line of thought. The ASUS 3G smart-phones branded as Vodafone 1210, which use Marvell’s communication and application processors, is a good example. The synergy in this relationship comes from the fact that both Marvell and ASUS are committed to low-cost products. (Incidentally, this low-cost philosophy is one solution to bring the convergence movement to the emerging markets. You can view this as complementary to the elitist band of phones from Apple, RIMM or Palm like Ms. Mitra points out in her recent post here.)

At the moment, Marvell is relatively behind the leading chipset vendors in its development efforts. It may hence not get a favorable look from existing handset vendors as it seeks a meaningful baseband communication processor market share that will justify its XScale acquisition. However, it will look to establish new relationships (like ASUS) to grow with its customers’ market share gains. Much like Broadcom, Marvell has a good relationship with PC/laptop vendors like Dell. This positions the company to understand and help these vendors enter the mobile space should they decide to. Bolstered by stable application processor sales, this risky strategy has huge upsides with relatively minor downsides.