Infineon, Samsung and TriQuint were among the top design wins in the iPhone 3G. None of the companies are leaders in the areas for which Apple picked them, according to Will Strauss, principal of market watcher Forward Concepts (Tempe, Ariz.).

"Apple apparently wants to stay away from the traditional suppliers such as Texas Instruments and Qualcomm and work with smaller vendors they can control," said Strauss.

Infineon supplies the UMTS baseband and transceiver in the iPhone 3G. In the $10 billion baseband market, Infineon ranks fourth with seven percent of the market, tied with Freescale. Qualcomm and TI lead that market with 37 percent and 33 percent market shares respectively, according to Strauss.

In UMTS transceivers, Infineon ranks third with a 16 percent market share—tied with NXP--behind Qualcomm and STMicroelectronics with 28 and 23 percent respectively. "Infineon is no slouch, they just haven't been well known," said Strauss.

In power amplifiers, RF Micro Devices is the leader with TriQuint—Apple's pick for three chips--a more distant follower. In application processors, Apple's partner Samsung ranks below TI, Marvell and Renesas, Strauss said.

"Samsung was pretty new to that market when they got the original iPhone deal," Strauss said.

Cost is one of the issues likely driving Apple's choices. Strauss said Samsung's own handset that uses the Infineon chip set has a total bill of materials 20 percent lower than a similar design using Qualcomm chips, largely because of lower chip and royalty costs associated with the Infineon parts.

Qualcomm has a strong patent portfolio in wideband CDMA and charges handset makers royalties as high as five per cent of the unit's cost. But Infineon reportedly has a patent license with InterDigital Inc. that has a similar patent portfolio and lower royalties.

Apple itself falls toward the bottom of the pack as a handset maker. In 2007, Forward Concepts listed Apple as 29 out of 37 handset makers it tracked based on shipments of about 5 million phones.

"Apple could easily move into the top ten this year," said Strauss as long as it can double shipments to about ten million units. Nokia currently leads the list, shipping an estimated 437 million phones last year, but volumes drop off rapidly beyond the 80 million units LG Electronics shipped that got them to number five on the list last year, Strauss said.

By: DocMemory
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