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Nokia's Selection of New IC Solution Vendors and Its Implications for the Mobile Phone IC Industry

Published by: Market Intelligence Center

Published: Oct. 25, 2007 - 24 Pages


Table of Contents


Overview of Nokia's Chip Strategy Development

Nokia's New Chipset Strategy

In-house IC Development as Nokia's Core Competency

Moving Towards Software and Value-added Services

Meeting the Needs of Individual Technologies and Product Lines

Current State of the Global Mobile Phone IC Industry

Mobile Phone Brands Decreasing Adoption of Own-developed Chipsets

A Wave of Mergers Causing the Concentration Ratio to Rise

MIC Perspective




LIST OF FIGURES

Figure 1 Global Mobile Phone Baseband IC Market Share by Supplier in 2006

Figure 2 Global Mobile Phone IC Suppliers' Chip Technology and Market Share




LIST OF TABLES

Table 1 Nokia's Main IC Suppliers in 2006

Table 2 Nokia's Potential Future Mobile Phone IC Suppliers

Table 3 The Baseband IC Suppliers of the Top Five Global Mobile Phone Brands in 2006

Table 4 Global Mobile Phone IC Suppliers' Mergers and Acquisitions during 2006 and 2007

Abstract

On August 8, 2007, leading international mobile phone vendor Nokia announced that it was adjusting its long-standing IC development model based on in-house R&D to make greater use of technology licensing and multi-sourcing. This indicates a concrete manifestation of a change in Nokia's strategy that has been forced on the company by changes in the mobile phone industry environment. Nokia has been collaborating with Texas Instruments for some years now; it has now also begun to adopt IC solutions supplied by STM, Broadcom, and Infineon. A few days after Nokia's announcement, on August 20, Infineon revealed that it was acquiring LSI's mobile products division for 330 million Euros. These two announcements have sent shockwaves through the mobile phone IC market. This report will examine the strategic thinking behind Nokia's change in strategy, and will consider how the new strategy will affect the competitive balance in the global mobile phone IC industry.

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