Summary:

There is a shortage of CDMA chips in the market, mostly because of aggressive rollouts of CDMA networks around the world. New markets such as India are sucking up a lot of handsets, while the CDMA networks in the developed world are going through some serious […]

There is a shortage of CDMA chips in the market, mostly because of aggressive rollouts of CDMA networks around the world. New markets such as India are sucking up a lot of handsets, while the CDMA networks in the developed world are going through some serious upgrades and as a result folks are snapping up new handsets. Albert Lin, a fabulous analyst with American Technology Research released a great analysis of the market today.

CDMA phone production will slow for a period of one to two quarters. This could mean sudden delays and pushouts which should last about 1 to 2 quarters. CDMA carriers may curtail promotional activity and focus on higher-end offerings for the next quarter or two, points out Lin, and this could be a manna from heavens for the GSM based carriers as this could be a rare opportunity for GSM to experience higher rates of growth than CDMA.

Most of the chip problems are Qualcomm related, it seems, since the company controls nearly 85 percent of the total market.

bq. Qualcomm has 85% market share for CDMA ASICS. After a terrific quarter of growth, QCOM is now looking at total ASIC shipments in the 33MM to 35MM range (we think it could be a little higher, but not terribly so) The supply constraints which were debated heavily during their quarter reporting appear to be concentrated on mainstream (MSM5000 family) products and not the high-end (MSM-6000 family).

This opens up an opportunity for Texas Instruments and Samsung, which have been trying to get a bigger share of the CDMA market.

bq. While we cannot determine what strategy QCOM will use (save big customers, balance big with small, disappoint equally, who knows?), it does create incentive for phone makers to look at TXN and Samsung as possible future suppliers.  

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