The back-end beneficiaries of the smartphone boom

It's not just HTC, Motorola and Apple who are benefitting from the smartphone boom. The manufacturers of the components that go into these phones are also reaping the profits, big time.

Gigaom had this interesting post about Corning (I still have  Corning glass baking dishes!) which now manufactures the hardened 'Gorilla Glass' used in smartphones. Gorilla Glass is a super-strong and light LCD Glass which is ideal for touch interfaces of phones. It marries hard and scratch resistant properties of milk bottles with the lightness of LCD Glass. It is apparently being used by 200 smartphones including iPhone (the biggest customer), Motorola Droid and Samsung Ultra Touch. And there are so many more takers that Corning is being forced to ramp up their production facilities to meet the burgeoning demand. Barely 2 years since it launched Gorilla Glass in 2008, Corning expects to cross 1 Billion USD in revenues from the product next year.

Samsung has flagged off the huge demand for their AMOLED displays which will outstrip the company's ability to supply them. Samsung expects the AMOLED market to grow to 600 million units by 2010, on the back of strong demand by smartphone and tablet PC technology. Incidentally, Samsung and LG are  the only manufacturers of AMOLED displays and both have been unable to keep up with market demand. Samsung has stated that only new companies coming into the market will grow the category.

The expected shortage of AMOLED panels has prompted HTC to announce that they will switch to Sony's SLCD (Super LCD) technology for specific models, to enable them to ramp up production.

San Diego based QualComm has been another huge beneficiary from the smartphone boom. The world's largest manufactuer of chips for cellphones has been associated closely with the Android OS and is today used across all major handsets including HTC Incredible, Blackberry Storm, Motorola Droid, HTC Evo etc. In June, QualComm announced their DualCore chip for smartphones which will probably also find application on Android powered tablets and 'smartbooks' developed by HP and Lenovo. Analysts point out that QualComm's resurgence will put them on a collision course with Intel as the world's biggest chip manufacturer, especially as the company moves from phones into electronic devices. QualComm Snapdragon chips are projected to be used in over 40 devices, across 17 manufacturers. Incidentally the A4 processor which powers the iPhone 4 and iPad is developed in-house by Apple, through collaboration with Samsung.

It's interesting to know that while at the front-end, brands battle for market share, the smartphone industry is driving hugely profitable growth for component manufacturers as well!
Sources :
Businessweek
Techradar
CNet
Global Smartphone Industry Report 2010

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