Should Apple buy ST-E or Renesas Mobile?
Both are commercially distressed companies with parents — STMicroelectronics and Renesas Electronics, respectively — who need to make radical changes to try and stem losses and turn larger semiconductor businesses around. Both have excellent European modem technology but are struggling to achieve full value for that technology through a lack of significant design wins. Which of course leads back to the great success of relatively few players in the mobile device market, Samsung, Apple, Qualcomm.
In his latest newsletter Strauss makes the point that the recent news that Samsung has developed an internal LTE/3G capability which it has deployed alongside a quad-core Exynos application processor, should be a source of concern for Apple. The CMC221S LTE/3G/2G modem is shipping in Samsung Galaxy S3 smartphones. Strauss expects the Via Telecom CDMA modem IC to carry on being included in Galaxy S3 phones for some networks but said that he expects the Samsung modem will be integrated with the Exynos application processor either late in 2013 or early in 2014.
Like Samsung, Apple designs its own applications processors based on the ARM architecture – the A5, A6 and A6X – but fabless Apple gets them manufactured by Samsung. And Strauss observes that Apple has no in-house modem capability. In the past Apple has used 3G modems from Infineon then Intel and more recently has deployed Qualcomm modems.
Samung’s potential for integration shows how pressure may be brought to bear on Apple. It might be possible for Apple to license in LTE capability and include it in a future system-chip but not necessarily the best technology. Integration issues might be much easier if it was a wholly-owned technology.
"There are few opportunities to acquire an advanced modem design like Samsung’s, so Apple has to be exploring possible in-house design (no easy task) or casting eyes on LTE/3G/2G modems from ST-Ericsson or Renesas Mobile," said Strauss, in the newsletter.
There are several TD-LTE-only modem houses that Apple could acquire, but this would only provide a partial solution with more work needed to add FD-LTE plus 3G and 2G capability, he added.
Of course both ST-Ericsson and Renesas Mobile are about a lot more than just LTE modems. They have had to develop complete mobile phone platforms with much software; almost complete phone designs to try and capture phone companies’ interest. Which of course is part of the problem. Consumers don’t want a lot of mobile phone or tablet computer choice. They want either the i- or Galaxy versions of a seductive mobile dream. So could Apple buy the modem technology from one or other company and leave the rest behind?
I doubt that would suit either STMicroelectronics or Renesas, at least at first blush, but innovative deal making is what makes the world go around. So it could be that one of the last events of 2012 could be a beauty contest between Renesas Mobile and ST-Ericsson with Apple as the admiring swan.
Loss-making ST is close to Apple by way of design wins for MEMS sensors and is expected to make an announcement of a strategic plan for the company on December 10.
