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MWC: Parts Challenges Ahead for Mobile Vendors

Supply chain managers, brace yourselves. Mobile is taking off in all sorts of exciting and demanding ways, and making sure there are enough products in the pipeline could be the electronics industry’s next pressure test.

Based on the chatter at the World Mobile Congress, which kicked off today in Barcelona, the idealistic, always-connected mobile world will require a multi-tiered, collaborative ecosystem. That’s going to mean more broad strategic partnerships like the one {complink 3847|Nokia Corp.} and {complink 3426|Microsoft Corp.} announced last week.

As Marc Herman reports, the mobile industry’s theme has noticeably shifted this year. (See: Software, Components Upstage Hardware at MWC.) Only a few years ago, conversations here at this show centered on handset form factors, ringtone revenue-generation models, and next-gen data/SMS capabilities. This year, it’s all about making sure mobile access is available to everyone via almost any kind of device — phones, tablets, autos, medical instruments, and whatever else you can carry or clip to your belt. More than that, though, all indicators point to creating rich user experiences with innovations coming in from all parts of the supply chain.

“The market is becoming increasingly mobile. As an example, advanced smartphone devices will grow four to five times to 2016 and the generated traffic will grow about 30 times, so end-to-end quality of experience becomes key,” said {complink 1879|Ericsson AB} president and CEO Hans Vestberg during a press conference this morning.

To successfully hit this inflection point, technology, services, devices, and applications will have to converge in a way that appears seamless to the end-users. “All four of these pieces are important to transform to the networked society,” said Vestberg. Of course, marketing executives from suppliers like {complink 3926|Nvidia Corp.}, {complink 9538|NXP Semiconductors N.V.}, {complink 4383|Power.org}, and {complink 4505|Qualcomm Inc.}, which have product announcements this week, were optimistic — enthusiastic, even — about meeting the expected uptick.

“We have very healthy supply of and tons of design wins,” says Leon Farasati, senior product manager at Qualcomm, referring to the latest chipset products like Snapdragon and MSM8660. “We’re really prepared to take this chip to the market with lots of smartphones and lots of tablets.”

Not that I want to play “doubting Jenn,” but Apple recently told analysts during its earnings call that it could have done even better than it did if not for supply-related issues. And, if Apple, the company making the most noise in the space, is having issues, well, then, perhaps others will, too. (See: Supply Chain Guru at Apple’s Helm.)

As the week unfolds and after the trade show ends, I’ll also be looking into other supply chain issues related to other consumer device segments, like automotive and consumer electronics.

2 comments on “MWC: Parts Challenges Ahead for Mobile Vendors

  1. Jay_Bond
    February 14, 2011

    I would agree that it is rather optimistic to think that the supply of these chips is going to outlast demand. If Apple stated they had problems with supply, it's bound to happen with others. The problem the vendors are going to face is the gamble of if they have enough supply for the demand. If they end up with excess, will they be able to sell that supply before the next gen chip moves in or are they going to be stuck with a loss and lower sales than expected. 

  2. Barbara Jorgensen
    February 15, 2011

    Keep on doubting Jenn–we need doubters….Apple's Cook knows a thing or two about supply chains, which is reason to be concerned about possible shortages. As Apple is one of the biggest OEMs in the world and is are likely to be first in line at most components suppliers, mobile handset competitiors have the added stressor of taking the backseat to Apple.

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