Cellular network technologies, such as the 2G, 3G, 4G and 5G, have developed quickly with each generation significantly improving connectivity speed. Baseband chipsets are key hardware components that enable smartphones and tablets to connect to cellular networks. While innovation plays a key role in this market, there are high barriers to entry, including the significant initial investments in research and development, which are necessary in order to design baseband chipsets, and the existence of intellectual property rights.
Alpha is the largest manufacturer of baseband chipsets complying with the 4G standard with a market share of 55% worldwide and the owner of several important intellectual property rights. Its second largest rival is Beta, which has a market share of 15%. Peach is an important maker of smartphones and tablets with a premium brand image worldwide, which accounts for about one third of 4Gcompliant baseband chipset demand, and one of Alpha’s and Beta’s key customers.