Exit leaves Qualcomm the only major player in the LTE baseband business.
Broadcom announced earlier this week that it was leaving the cellular baseband market, laying off 2,500 of its employees and shuttering its division. The company decided not to sell the division, as according to reports its own analysis it did not believe it could find a worthwhile price.
After Broadcom’s unceremonious exit from the baseband market Tuesday there was only one major player in the 4G LTE baseband market; Before Broadcom’s unceremonious exit from the baseband market Tuesday there was only one major player in the 4G LTE baseband market. In short: Qualcomm is the undisputed hegemon of the market, and Broadcom’s presence, or lack thereof, will do nothing to change that.
Speaking to Reuters, Broadcom Chief Executive Scott McGregor told the newswire that the company made the decision to cut its losses and focus on what it is good at.
“We made the decision to pursue a wind-down, which minimizes the ongoing losses from the business, and enables us to focus on our core strengths that much more quickly,” he said.
Surveying the broadband market, one will find that there’s simply no company that can take on the goliath of Qualcomm. Qualcomm owns 66 percent of the baseband market share, but when that number changes to only include 4G LTE that figure rises to 94 percent. Intel, for instance, is a generation behind Qualcomm with its XMM 7260 and XMM 7160 modems.
Developing basebands is an expensive endeavour, and considering the legal minefield that is the patent market in the sector its not surprising that more of the established chip giants haven’t stepped up to the plate. But while monopolies are anticompetitive and bad for the market as a whole, the fact is Qualcomm’s silicon is good enough.