Market Dominance and Strategies: A Comparative Analysis of Qualcomm and Apple in the Mobile Chipset Industry
Summary:
The mobile chipset market is dominated by Qualcomm, which has revenues nearly double those of Apple. Due to its commercial strategies, market positioning, and partnerships with essential smartphone manufacturers, Qualcomm has managed to preserve its market share despite Apple’s superior chipset performance. Apple, in contrast, only provides chipsets for its products, and its market share is far lower. The analysis suggests that Qualcomm increase its corporate partnerships and alliances, increase its R&D spending, and create specialized chipsets for specialized applications. It is advised that Apple use technology like machine learning algorithms to grow its client base and create unique value propositions for its chipsets.
Introduction:
Qualcomm has become a dominating participant in the chipset industry in the world of mobile technology, even though its products perform less well than those of Apple (How Is Qualcomm Dominating the Mobile Semiconductor Industry? — VYRIAN, 2022). This begs the question of what variables have helped Qualcomm maintain its success despite Apple’s superior results. The causes for Qualcomm’s dominance, including its business plans, market positioning, and collaborations with significant smartphone producers, will be examined in this thesis. By investigating these characteristics, we may better understand why Qualcomm has held onto its position as a market leader in the mobile chipset market.
The target audience for this analysis would be experts in the mobile and technology industries and tech enthusiasts curious about the market competition and performance differences between Qualcomm and Apple mobile chipsets. Consumers and tech enthusiasts who want to learn how various mobile processors perform and the elements that affect that performance may find this information interesting.
Background:
Qualcomm is a well-known American multinational headquartered in San Diego, California. It is renowned for its skill in creating semiconductors, software, and services connected to wireless technology, according to Qualcomm (n.d.). The company, founded in 1985 by Irwin M. Jacobs and six other people, had a fundamental impact on the development of CDMA, a wireless communications technology that went on sale in 1995. Qualcomm has established a reputation as a top producer of mobile chipsets and a supplier of wireless communications technologies.
A technology business called Apple was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Its headquarters are in Cupertino, California (Brashares, 2001, pp. 15–16). The Samsung S3C6400 chipset, based on ARM, provided power to the first iPhone when it was introduced in 2007 (The Evolution of the Apple iPhone and its multiple CPUs — Even within a Model, 2010). The A16 Bionic, Apple’s most recent mobile processor, is intended to provide a better performance, faster processing speeds, and longer battery life than earlier versions (iPhone 14 pro, n.d.).
Supporting Evidence:
The graphical representation below shows the market share of Smartphone AP (chipset) among the various companies.
Explanation and Analysis:
Qualcomm and MediaTek are the most prominent players in this sector. Our research shows that Qualcomm has close to double Apple’s market share.
Revenue generated by Qualcomm is also close to twice that of Apple. Throughout the quarter, Qualcomm gained 29% of the market. Despite difficult macroeconomic conditions and the contracting smartphone industry, Qualcomm retained its dominance in the premium class. (Counterpoint et. el.)
In terms of sales, Qualcomm led the AP market with 44% in Q2 2022. The higher premium mix, which has increased ASPs, has propelled Qualcomm’s share growth of 56% YoY(Year Over Year) in Q2 2022. Also, the earnings for the premium tier will be supported by the recently announced cooperation between Qualcomm and Samsung for the galaxy s22 series. In the AP market, MediaTek now controls 22% of the market. Baseband that is sold to Apple generates additional income for Qualcomm. The increased 5G ASP and entry into the premium market with the Dimensity 9000 series were the main drivers of MediaTek’s revenue. (Counterpoint et. el.)
Conclusion:
In conclusion, Qualcomm now has a larger market share than Apple, even though both companies are significant competitors in the mobile chipset industry. This is likely owing to Qualcomm’s more expansive product offerings that appeal to a broader range of devices, including inexpensive to high-end smartphones. At the same time, Apple exclusively supplies chipsets for its products. In addition, Qualcomm’s chipsets are typically less expensive than Apple’s high-end A-series chipsets. Also, Qualcomm has made a name for itself as a pioneer in 5G technology, which is becoming increasingly significant in the mobile market. Overall, even though both businesses are renowned for their innovation and high-performance chipsets, Qualcomm likely has a more significant market share in the industry for mobile chipsets due to its more expansive product line-up and lower price point.
Recommendations:
For Qualcomm:
1. To stay at the forefront of cutting-edge technology like 6G and AI, continue to invest in research and development.
2. Develop specialized chipsets for niche applications like gaming or artificial intelligence to broaden its product line.
3. Develop closer ties with smartphone makers to increase the number of devices that feature their chipsets.
4. Emphasising transparency and moral conduct in its commercial dealings and relationships will help the organization improve its reputation in the marketplace.
For Apple:
1. Increase the number of customers by making its chipsets available to other smartphone makers and its own.
2. Enhance its pricing strategy by lowering its chipset’s cost or providing cheaper solutions for low-cost devices.
3. Develop distinctive value propositions for its chipsets using its technology, such as machine learning algorithms.
4. Look for ways to enter new industries where its chipsets could be incorporated, such as those for smart home appliances or automotive technologies.
References:
Brashares, A. (2001). Steve Jobs: thinks different (pp. 15–16). Twenty-First Century Books.
Cheng, R. (2022, June 10). Apple’s Chip Success Has Qualcomm Fired Up to Show Who’s Boss. CNET. https://www.cnet.com/tech/mobile/apples-chip-success-has-qualcomm-fired-up-to-show-whos-boss/
Company. (n.d.). Qualcomm. https://www.qualcomm.com/company
How is Qualcomm dominating the mobile semiconductor industry? — VYRIAN. (2022, March 16). Vyrian — Your Primary Source of Semiconductors, Connectors and LEDs. https://www.vyrian.com/qualcomm-dominating-mobile-semiconductor-industry/#:~:text=Qualcomm%20is%20leading%20the%20mobile
Infographic: Q2–2022 | Global Smartphone AP Market Share. (2022, September 21). Counterpoint Research. https://www.counterpointresearch.com/infographic-global-smartphone-ap-market-share-q2-2022/
Parashar, S., & Sharma, P. (2022, December 12). Global Smartphone AP-SOC Shipment & Forecast tracker by Model — Q3 2022. Counter Point. https://www.counterpointresearch.com/global-smartphone-ap-market-share/
Sims, G. (2022, June 5). Why are Apple’s chips faster than Qualcomm’s? Android Authority. https://www.androidauthority.com/why-are-apples-chips-faster-than-qualcomms-gary-explains-802738/
