Gartner Research

Semiconductor Vendors Can Gain as Phone Subsidies Retreat

Published: 24 October 2013

ID: G00250655

Analyst(s): Hugues J. De La Vergne, Jon Erensen

Summary

Communications service providers' move to reduce subsidy expenses will drive entry-level smartphones in the United States. Semiconductor vendors should capitalize on this with low-cost reference designs.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • The shift to unsubsidized retail smartphones will increase demand for low-cost solutions; thus, established semiconductor vendors can expect low-cost original design manufacturers to be key partners for this opportunity
  • As U.S. CSP ARPU stalls, causing CSPs to shift their focus to upselling feature phone users, semiconductor vendors targeting this basic smartphone opportunity will face increasing competition from low-cost vendors
  • BYOD programs push hardware costs to employees/consumers, some of whom will push back on high-priced smartphones with enterprise features, further pressuring semiconductor vendors that limit their focus to premium smartphones.

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