Global Smartphone Application Processor (AP) Market (By Operating System, Application, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

Global Smartphone Application Processor (AP) Market (By Operating System, Application, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

Market Insight:

A smartphone application processor is a system that includes a chip that aids the operating system of the smartphone. With the usage of an application processor, the smartphone's performance is at its peak. Customers' smartphone experiences are improving as a result of the adoption of sophisticated CPUs.

As technology advances, CPUs for cellphones improve. The major manufacturers are introducing premium CPUs with high-end functionality, such as the Octa-core processor. As a result, technical developments and fast innovation are projected to drive an increase in demand for smartphone application processors in the future years. The global smartphone application processor market is expected to reach US$19.50 billion in 2023, growing at a CAGR of 10.56%, during the forecast period.

Segment Covered:

• By Operating System: In terms of operating system, the global smartphone application processor market is segmented into three segments: Android, iOS, and Others. The android held a highest share in the market. On the other hand, the iOS segment is expected to grow at a signififcant CAGR in the forthcoming years on account of growing popularity of iPhone devices and rising demand for Apple smartphones by young generation across the world.
• By Application: On the basis of application, the report further provides the segmentation of the market as follows: Camera, Gaming, Photo & Video Editing, and Others. The camera held the largest share in the market. The market's expansion is aided by the growing demand for advanced features from growing base of tech-savvy consumers such as enhanced camera functionality, high end graphics, long battery life, etc.

Geographic Coverage:

According to this report, the smartphone application processor market can be divided into four regions namely North America, Asia Pacific, Europe, and the Rest of the World. The countries covered in North America region are the US, Canada, and Mexico, while Europe includes Germany, Italy, The UK, France, and Rest of the Europe. Moreover, China, Japan, South Korea and Rest of the Asia Pacific are included in the Asia Pacific region.

North America held the maximum share the market owing to rise in the adoption of smartphones, advancements in technological to sustain the consumer demand for smartphones and the presence of leading manufacturers of smartphones in the region. In Asia Pacific, China held largest share in the market owing to the rise in spending, consistent advancement in smartphone technology and growing emphasis on powerful processors. Whereas, in Europe, Germany is expected to be the fastest growing region in the forecasted period.

Top Impacting Factors:

Growth Drivers

• Increasing Number of Smartphone Users
• Rise in Consumer Spending
• Mounting Penetration of Internet Users
• Supportive Government Initiatives

Challenges

• High Cost Associated with Development and Operations
• Performance And Heating Related Problems

Trends

• Growing Execution of Artificial Intelligence in Smartphones
• Accelerating Adoption of 5G Technology
• Escalating Penetration of Mobile E-Commerce
• Rising Trend of Connected IoT Devices
• Driver: Mounting Penetration of Internet Users

The number of people using the internet for various online activities has surged over the past few years and further expected to increase at a great pace. With the increasing penetration of internet, smartphones have become popular as they represent one of the most affordable internet enabled devices available on the market. Often times, people use their smartphones in order to access their favorite video streaming sites and apps instead of a computer or a laptop. Hence, mounting penetration of internet has catalyzed widespread adoption of smartphones, which in turn, has augmented the growth of smartphone application processor market as it is the most critical component in a smartphone, directly responsible for its performance and ensures that the smartphone functions correctly.

• Challenge: High Cost Associated with Development and Operations

In recent years technology is continuously evolving, several industries are adopting automation and digitization. These changes in technology and automation may bring opportunities to the key players to enter into new market but with high initial research and development costs on system on a chips (SoC) or application processor. Due to increasing customization of SoC for various products, companies need to focus on various R&D projects at the same time. This results in increasing the companies' project costs and increasing the probability of product failure. Moreover, capabilities of the mobile processor determine its price. The supply prices of mobile processors are set by how many tasks the processors can handle, how fast they can process data and how much energy they save in the processing. Therefore, high cost associated with smartphone application processor development and operations is likely to hamper the market growth of smartphone application processor in the upcoming years.

• Trend: Growing Execution of Artificial Intelligence in Smartphones

Execution of AI in smartphones incorporate AI technology and machine learning to make smartphones smart enough to imitate the human brain. Handset manufacturers are tying together the best possible microprocessor hardware and AI software to deliver the best experience they can to lure customers away from their competitors. Owing to which, mobile manufacturers have accelerated their investments into the field of AI-based user experiences. This has resulted in a number of specially designed microprocessors which can conduct the sort of math involved in AI and ML calculations faster and more efficiently, the two most critical requirements for mobile, use less power. And as these mobile-appropriate microprocessor would become cheaper over time and they are likely to find their way not just to every phone, but every connected device in the world through a 5G connected Internet of Things (IoT), the global smartphone processor market is expected to rise in coming years.

The COVID-19 Analysis:

In 2020, the outbreak of COVID-19 weakened the demand of smartphones due to halted production activities, and as people started budgeting and shopped less during the pandemic phase. This decline in smartphone production directly affected the demand of application processors as a smartphone processor is a central hub of the smartphone and is directly responsible for the performance of the device. However, after the relaxation of the lockdown, the industry responded positively to the crisis. The technological innovations have also helped smartphone application processor retailers to align with safety regulations in stores.

Analysis of Key Players:

The global smartphone application processor market is concentrated, with few players occupying the majority of shares in the market. The key players in the global smartphone application processor market are:

• Apple Inc.
• Qualcomm Inc.
• Intel Corporation
• MediaTek Inc.
• Samsung Electronics Co., Ltd.
• Nvidia Corporation
• Huawei Technologies Co., Ltd.
• Lenovo Group Limited
• Broadcom Inc.
• Texas Instruments Incorporated
• Unisoc Technology Co., Ltd.
• Advanced Micro Devices, Inc.
• Renesas Electronics Corporation

Some of the strategies among key players in the market for smartphone application processors are product launches, rapid innovations, acquisitions and collaborations. For instance, in April 2022, Samsung has introduced the Exynos 1280 SoC, a 5G mobile processor that powers some of the company’s most recent mid-range smartphones, including the Galaxy A53 5G and Galaxy M33 5G. Whereas, in February 2021, QUALCOMM, one of the major chipmakers in the market, announced the launch of its Snapdragon X65 5G Modem to antenna solution, with support of around 10Gbps speeds on both non-standalone and standalone 5G networks.