ABI Research Charts the Rapid Rise and Fall of the $4 Billion Application Processor Market.

SCOTTSDALE, Ariz. -- The world market for wireless handset application processors, which is still in the first flush of youth, will be in its prime of life for a limited time, according to a new study from ABI Research.

Application processors provide wireless handsets with multimedia features, such as digital imaging, mobile audio and ringtones, TV quality video, gaming, global positioning system (GPS), wireless LAN, and mobile digital TV. This market, driven by the global explosion in smartphones and other high-end portable devices, has grown rapidly from small beginnings. In 2007, application processor revenue is expected to be nearly $4 billion, with unit shipments at nearly 298 million. But within two years, two factors will begin to exert downward pressure.

According to senior analyst Douglas McEuen, "Around 2008, a lot of the big semiconductor processor companies that make application processors are going to start incorporating 65 and 45 nanometer geometry into their designs, which will make it easy to integrate the application processor functions into the baseband processor. The market is going to take a big hit because of that. The applications processor industry is still living high on being new, but I don't think it's going to be sustained."

The second factor is the rise of the ultra low cost handset, which is set to take an increasing share of the world's handset market. As basic, no-frills devices, these handsets have no need of application processors.

Most major application processor vendors are large, diversified companies such as Texas Instruments, Qualcomm, and Freescale. With so many other products in their portfolios, the state of this market won't "make or break" them, but ABI Research advises manufacturers able to mount 45-65nm fabrication efforts to get on board the baseband processor integration trend early.

And, notes McEuen, "The market won't go away altogether, since there will always be some ultra-high-end smartphones offering every single application possible that are going to need a stand-alone application processor."

"Application Processors in Mobile Devices"

(http://www.abiresearch.com/products/market_research/ Application_Processors_in_Mobile_Devices)

provides a detailed exploration of application processor technology and the requirements for competitive architectures, including essential product capabilities. The report discusses short- and long-term market implications, and includes key vendor profiles. It concludes with an in-depth market forecast, using empirical data to track both positive and negative market forces. It forms part of the Wireless Semiconductors Research Service (http://www.abiresearch.com/products/service/ Wireless_Semiconductors_Research_Service)

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Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit www.abiresearch.com, or call +1.516.624.2500.