Integrated Modem-Application Processors Market Plateauing Despite Strong Push from the Leading IC Suppliers; Verticalization and Technology Complexity to Blame

09 May 2016

ABI Research, the leader in transformative technology innovation market intelligence, forecasts that standalone application processor shipments targeting smartphones and tablets will grow from 462 million units to surpass one billion by 2020. Market demand for standalone application processors will ultimately limit opportunities for integrated modem-application processor platforms (MODAPs) that currently enjoy a strong push from key suppliers like Qualcomm, MediaTek, and Spreadtrum.

“Verticalization in the high-end of the mobile phone market is specifically driving growth in standalone application processor shipments for smartphones and tablets,” says Malik Saadi, Managing Director and Vice President at ABI Research. “Apple and Samsung, for instance, use separate app processors and modems in their flagship products.”

MODAPs offer significant advantages, notably cost, small form-factor, and power consumption, compared with separate processor and modem. These advantages are clear differentiators in the low-end and mid-range parts of the market. However, MODAPs offer less flexibility for addressing the high-end segment of the market in which feature-set differentiation and performance are paramount.

To cope with current market conditions, global OEMs are trying to rationalize the number of device models they produce. Many manufacturers use various chipset SKUs for every model launched, and each SKU comes with a different set of features at both the processor and modem levels. Flexibility is paramount, as separating the modem from the application processor is crucial to enable OEMs to mix and match chipsets from various IC suppliers, depending on the segment and region they address.

And for mobile application processor platforms, product differentiation is quickly shifting from CPU cores to the use of advanced GPU, DSPs, and ISPs in order to support innovative features and functionalities. These include immersive graphics, sensor fusion, hardware level security and authentication, machine vision, augmented reality, virtual reality, and artificial intelligence in the future.

“The technology commoditization, the great improvement of ARM Cortex core architectures, and stiff competition saw a number of custom CPU vendors exiting the smartphone market altogether,” continues Saadi. “This left Qualcomm as the sole supplier of these types of processors.”

The market share of custom CPUs, from total smartphone processor shipments, collapsed drastically during the last six years, from a staggering 80% in 2010 to 25% in 2015. ABI Research expects the market for these CPUs to become increasingly wedged between captive vendor processors in the high-end and reference designs that systematically use ARM Cortex in the low-end and mid-range.

“The erosion of the custom CPU market will continue during the coming years to the point that, by 2020, shipments of these processors are not expected to exceed 5% of the total smartphone processor market,” concludes Saadi. “And that is only if they manage to make it to that point.”

These findings are part of ABI Research’s Mobile Device Semiconductors Service, which includes research reports, market data, insights, and competitive assessments.

# # #

About ABI Research

For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

For more information about ABI Research’s services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit

Contact ABI Research

Media Contacts

Americas: +1.516.624.2542
Europe: +44.(0).203.326.0142
Asia: +65 6950.5670

Related Service