With anecdotal evidence pointing to a slowdown in mobile phone chip shipments, market researchers at Forward Concepts said in a report that the May shipments reported by WSTS (World Semiconductor Trade Statistics) say this is not so.

The company said May shipments of DSP and RISC chips for mobile phones were up 8% over April, and also noted that May shipments were up 47% over May 2007.

While Forward Concepts noted that DSP shipments for wireless infrastructure were down 14% sequentially in May from April, sales were still 30% higher than May 2007.

What is striking, the company said, is that DSP shipments for the consumer market, comprised mainly of consumer electronics, continues to show strength while the automotive, wired communications and storage (disk drive controllers) sectors remain in the tank.

Overall, DSP shipments - excluding cellphones - were down 3% for the month, but up 14% over May 2007. The multi-purpose segment tends to be catalog products and sales through distributors, so it is a bit more volatile than the other categories, Forward Concepts asserted.

Finally, the company is awaiting reports of June shipments in order to better calibrate the Q2 and first half results.

At the same time, market researchers at ABI Research have indicated that global capital expenditure on mobile communications continues to rise due to greater emphasis on new data services, increased traffic load, and preparation for 4G deployments.

However, given the uncertain outlook this year in regard to the US economy, the company expects North America's CAPEX to remain flat this year, while other regions will increase their CAPEX commitments for new 2G/3G deployments or expansions, all-IP service discovery platform upgrades, SoftSwitch unified core systems, and preparations for 4G.

ABI Research calculates CAPEX investment in 2007 to exceed $131 billion, projected to reach $163.5 billion in 2013.

On a geographic basis, the Asia-Pacific and North American regions are estimated to be the biggest spenders, according to ABI Research analyst Hwai Lin Khor.

"Mobile industry spending in the Asia-Pacific area is primarily driven by the emerging markets that are expanding current 2G network footprints and new 3G rollouts; many nations in this region have yet to release their 3G licenses."

"Mature markets such as Japan, Korea, Taiwan, and Hong Kong will be spending on service delivery platforms, 4G base stations and related components, IMS, and in-building wireless systems. North American spending is primarily driven by 3G upgrades to HSDPA/HSPA for the WCDMA evolution and EVDO Rev A for the CDMA evolution, as well as activities around mobile WiMAX," Hwai Lin Khor continued.

Also, most current CAPEX is still directed to voice services and 2G networks expansion, since the majority of subscriber net adds in recent years have come from emerging markets that are fairly contented with simple voice calls and messaging services.

In addition, there is increased awareness for the need for early investment to ensure that networks are ready to support the capacity demanded by higher bandwidth data services, with increased EDGE, 3G, and subsequently 4G deployments translating to higher CAPEX investment for data services and for the respective technologies.

"CAPEX for data services will surpass that for voice sometime in 2009 as 4G starts to arrive. ABI Research believes that by 2013, the percentage split will be 28% for voice, 67% for data, and 5% for mobile TV," Hwai Lin Khor concluded.

By Ann Steffora Mutschler, Senior Editor - Electronic News