Weekly Mobile Notes: Apple, Nokia and Nvidia

by Trefis Team
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The past week saw quite a few developments in the mobile sector. Apple (NASDAQ:AAPL) saw its stock decline almost 6% over the week as rumors swirled that a deal with China Mobile (NYSE:CHL) could take longer than anticipated due to the Chinese government’s concerns regarding the heavy subsidies. Nokia (NYSE:NOK), meanwhile, continued on its comeback trail with two of the largest national carriers in the U.S. announcing that they would be carrying the phone this holiday season. With the smartphone market growing, competition in the semiconductor supply chain is also heating up with Nvidia (NASDAQ:NVDA) scoring its first LTE design win with the Tegra 3 –  a fact that will not have escaped Qualcomm’s (NASDAQ:QCOM) attention.

Apple

In what could be a major blow to Apple’s expansion plans in China, China Mobile may not be willing to ink a deal to carry the iPhone 5 anytime soon. After a recent meeting with China Mobile’s management, analysts with Deutsche Bank believe that the Chinese government, which has a controlling stake in the carrier, is ‘not supportive’ of an Apple deal due to the ‘heavy subsidy burden’ that carrying the iPhone would entail. (see Apple Faces China Mobile-Sized Stumbling Block Limiting China Upside Potential) Apple already has iPhone deals with China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) in place, but will need the support of the country’s as well as the world’s largest wireless carrier to reach a bulk of the Chinese populace. China Mobile, with close to 700 million mobile subscribers, controls almost 65% of the Chinese wireless market.

This revelation comes just weeks after the iPhone 5 was launched with a Qualcomm LTE chipset that also had support for China Mobile’s proprietary 3G network. Until now, it had seemed that the only roadblock to a possible China Mobile deal was the lack of a chipset that was compatible China Mobile’s home-grown TD-SCDMA network. With this chipset, it seemed that Apple could finally release an iPhone on China Mobile after making a few minor tweaks. However, now it seems that we could see the stalemate between Apple and China Mobile extending longer than many anticipated. Considering China Mobile’s clout and the huge market opportunity that Apple would be missing out on due to delays, we might even see Apple reach a compromise on the subsidy issue.

Nokia

Lifting uncertainty around Nokia’s (NYSE:NOK) U.S. plans for this holiday season, a second U.S. wireless carrier, T-Mobile, announced this week that it has bagged exclusive access to a Nokia Windows Phone 8 smartphone. The Lumia 810, which will be made available in the coming weeks, has been custom-built for T-Mobile and is a close relative of the Lumia 820 released earlier. This came just days after the Lumia 820 and the higher-end 920 were introduced exclusively for AT&T, and clears concerns about the Lumia WP8 being available on just a single carrier.

The announcement also sheds more light on Nokia’s Lumia WP8 launch in the U.S. which, until last week, was shrouded in mystery after the company declined to give out pricing or availability details while introducing the new Lumias last month. Given AT&T’s (NYSE:T) and T-Mobile’s historical support of the Lumia, it now looks like they have been given exclusive access to the Lumias for a few months before Nokia looks to add other carriers such as Verizon (NYSE:VZ) and Sprint (NYSE:S) by potentially offering them exclusive access to other custom-built Lumias. (see Nokia Lures Carriers With Different Lumia Models; T-Mobile Joins AT&T)

Nvidia

Since its push into mobile computing last year, Nvidia has been in the limelight for all of the right reasons. The company positioned its standalone dual-core app processor, Tegra 2, well to capture significant non-iPad tablet market share in 2011. With the success of its quad-core Tegra 3 processor, Nvidia is making a deeper foray in the lucrative smartphone and tablet market.

Last week, Nvidia scored a big win from HTC’s One X+ smartphone to be sold by AT&T. This announcement makes AT&T the first US carrier to approve Nvidia’s Tegra 3 with 4G LTE for its network. (see Nvidia Takes On Qualcomm With Its 4G LTE Compatible Tegra Processors) But, more importantly, it means that Qualcomm is not the only player around to have a LTE-compatible application processor. Qualcomm however does remain the lone manufacturer to have a LTE baseband. While the HTC One X+ sports a Tegra 3 application processor, it comes bundled with a Qualcomm baseband for LTE-compatibility. Nvidia’s Icera basebands have yet not been made commercially available for LTE, although they were approved on AT&T’s network earlier this year.

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