ABI: New Competition Heats Up Market for RF Power Amplifier Vendors
December 29, 2007 // Published as a news service by IHS
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According to ABI Research, the radio frequency (RF) power amplifier market landscape has been changed in recent months because of two factors: the entry of Chinese vendors and the growing use of high-efficiency amplifier designs.
Analysts said Chinese vendors, led by Huawei Technologies and Zhong Xing Telecommunication Equipment Company Limited (ZTE), have become more active in the RF power amplifier market with significant effect on the device market.
"This is both an opportunity and a threat," said ABI Research director Lance Wilson.
"The Chinese position in the RF power amplifier and device market is not insignificant. Growing Chinese participation is an addition to the markets, but at the same time represents competition for incumbent vendors."
Analysts said much of the Chinese output is directed at the domestic market, where it will reduce earlier demand for equipment sourced from elsewhere. The start of time division - synchronous code division multiple access (TD-SCDMA) network deployment in China will also contribute to overall market size.
Forecasts from ABI Research of the global RF power amplifier market indicate that while the total available market for these essential cellular base station equipment components is shrinking, the decline is not as severe as had been feared.
"The RF power amplifier market for this segment is still showing a downward trend, but the good news is that the descent is not as precipitous as originally thought," said Wilson. "Though basic GSM [global system for mobile communication] is slowly declining, EDGE [enhanced data rates for GSM evolution] has satisfied the data needs of many users to a greater extent than anticipated.
"Many operators are becoming more wary of big 3G [third generation]-related spending. The result is that such GSM-based systems have enjoyed a longer life cycle, which in turn stretches out the growth period for 3G. This has a direct impact on what happens in the power amplifier and devices market."
High-efficiency RF amplifiers for wireless infrastructure are starting to enter the mainstream, analysts said, and will be seen in increasing quantities over the next five years. Greater amplifier efficiency means lower base station costs in initial price, lower power consumption and lower operating costs.
Source: ABI Research.