Boston, Mass. -- The global smartphone and tablet applications processor market is forecast to grow in the double digits from 2013 to 2018, according to Strategy Analytics Handset Component Technologies service forecast report.
Revenue for the global smartphone applications processor market is forecast to grow 10.8 percent compound annual growth rate (CAGR) from 2013 to 2018, reaching $30.0 billion in 2018. Growth will be fueled by LTE-Advanced, 64-bit, multi-core and semiconductor process technologies, according to Sravan Kundojjala, senior analyst at Strategies Analytics.
The report "LTE, 64-bit and Semiconductor Technologies to Lift Smartphone Apps Processor Market to $30 Bn in 2018," also forecasts that standalone applications processor penetration in smartphones will fall to 28 percent in 2018 from 38 percent in 2012. As a result, multi-core penetration is expected to increase from 50 percent in 2012 to almost 100 percent in 2018. Kundojjala attributes this to a push by integrated vendors, including Qualcomm, MediaTek, Spreadtrum, Broadcom and Marvell.
Another big change is the move to 64-bit chips." Strategy Analytics forecasts that the 64-bit chip penetration in smartphone applications processors will rise from 3 percent in 2013 to approximately 75 percent in 2018. Apple, Intel, Qualcomm and Samsung among others will drive this growth," said Kundojjala, in a statement. "Strategy Analytics believes that 64-bit chip adoption will be somewhat slower than multi-core chip adoption in smartphones as the required software ecosystem transition is likely to take time."
Analysts also expect ARM-based chip penetration will drop to 83 percent in 2018 from nearly 100 percent in 2012, due to efforts by Intel in smartphones and its lead in 14nm and beyond process technologies. "Upcoming 3G / 4G integrated products from Intel could lift the company's smartphone applications processor share in the near-term," according to Stuart Robinson, director of the Strategy Analytics Handset Component Technologies service.
Similarly, the tablet applications processor is expected to achieve double-digit revenue growth from 2013 to 2018. Revenue for the global tablet applications processor market is forecast to grow 14.6 percent CAGR from 2013 to 2018, reaching $7.2 billion in 2018, according to Strategy Analytics.
The report, "Tablet Apps Processor Forecast (2010-18): Double-Digit Revenue Growth Over Next 5 Years," also finds that the penetration of applications processors with an integrated baseband will increase to 17 percent in 2018 from two percent in 2012, fueled by low-cost quad-core 3G / 4G chips from suppliers such as Qualcomm, MediaTek, and Spreadtrum. Multi-core penetration in tablets reached nearly 90 percent in 2013 and the trend is likely to continue, according to Kundojjala.
"Strategy Analytics notes that the barrier to entry is quite low in tablet applications processors compared to smartphone applications processors," stated Kundojjala. "Therefore, we forecast a modest average selling price (ASP) growth through 2018, despite the introduction of 64-bit chips. In addition, a high concentration of low-cost tablet chip vendors in this market will result in a price war which is expected to have a significant impact on ASPs."
In addition, x86-based chip penetration in tablets is expected to increase to 30 percent in 2018 from 2 percent in 2012. "We expect Intel's investments in Android solutions will result in future share gains," according to Robinson.