Samsung in Japanese venture to challenge Qualcomm
Joins DoCoMo's chipset design alliance to reduce reliance on US technology and boost cellco's LTE ecosystem
Published: 14 September, 2011
READ MORE: Japan | Samsung | NTT DoCoMo | Semiconductor | Handset
Qualcomm successfully placed itself at the heart of the early Android device business and is now repeating the trick in WP7 and Windows 8. However, the company is facing rising challenges to its dominance of the integrated system-on-chip market for mobile devices. Rivals like Nvidia, which have only been able to compete on the app processor front, are acquiring baseband capability too; minor league players like Renesas are on the rise; and now Samsung is partnering with a Japanese consortium to reduce reliance on the US vendor.
Samsung - which has cut back on its own use of Qualcomm chips as it has pushed into smartphones with its own app processor - is to work with the established technology alliance of NTT DoCoMo, Japan's leading cellco, and its chip/device partners Fujitsu, NEC and Panasonic. The Japanese quartet formed a venture last year to focus on advanced platforms for LTE devices, in a bid to keep DoCoMo's offerings a step ahead of those based on standardly available technologies. Now they will create basebands and integrated chipsets which could boost the challenge to Qualcomm's massive share of the cellular baseband and SoC segments.
With Samsung involved, DoCoMo's objectives could gain new momentum, but the results of the cooperation will also find broader application via the Korean firm's own handset unit. This company increasingly uses chips from its internal sister companies and has growing market share in most regions of the world, unlike the Japanese vendors, which have largely failed to make an impact outside their home market.
According to Japan's Nikkei newswire, the five companies will kick off the new joint venture next year, with DoCoMo - famous for its heavy direction of its device and R&D agenda - taking a majority stake. The JV will have total capitalization of around ¥30bn ($390m). The resulting chipsets will be used by all four OEMs in their own handsets. This could result in DoCoMo achieving its aim of a cutting edge LTE platform over which it has a high degree of control, but with lower cost and lower risk of technical isolation than when it works only with local partners. Not only will the deal give Samsung a captive customer among the largest LTE deployers, but it will also be able to use the resulting chipsets widely. DoCoMo itself has been creating new partnerships with international cellcos in handset procurement and software platforms, including with Telefonica.
The negotiations over the JV are still to be finalized, said Nikkei, and DoCoMo would say nothing except that it was studying various alliances.
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