The Wi-Fi chipset market is competitive and characterized by a number of companies operating globally. The growth of these vendors depends upon the market conditions, growing demand for Wi-Fi enabled smart devices, and industry development. Therefore, it becomes necessary for the vendors to provide cost-effective components and value-added services to their customers to maintain their market position and gain a competitive advantage. The industry is expected to remain competitive with frequent acquisitions and strategic alliances adopted by the key players as a part of their business strategy to increase the industry presence. Companies aim at optimizing their products and further develop value-added capabilities to maximize their margins. Manufacturers focus on improving their efficiency by reinforcing their production units and supply-chains to reduce the delay in production turn-around-times (TAT) and supply-lead-times.
The key factors that aid market growth include the proliferation of smart devices such as personal computers and tablets and a growing number of public Wi-Fi hotspots. However, regulation and security associated with wi-fi technology and declining shipment of pcs and tablets restraints impact analysis are expected to limit the growth of the market during the forecast period. The global Wi-Fi chipset market includes companies that are continuously developing new technologies for global expansion to solidify their market position. The manufacturers compete in the market on the basis of cost, product quality, and technology used. It is important for Wi-Fi chipset manufacturers to provide products compliant with industry standards and advanced technology to maintain their market position and gain a competitive advantage.
Vendors in the global Wi-Fi chipset market are focusing on improving their technologies and upgrading products as well as expanding into the underdeveloped and developing economies. Key players in the market include Intel Corporation (US), Qualcomm Technologies Inc. (US), MediaTek Inc (Taiwan), Broadcom Inc. (US), Marvell Technology Group Ltd (Bermuda), STMicroelectronics NV (Switzerland), Cypress Semiconductor Corporation (US), and Texas Instruments Incorporated (US).
The major players may strengthen their presence in the global market through the mergers and acquisitions of local and regional players for expanding their product/service offering in the market during the forecast period. Therefore, vendors must provide products by using new technologies that could affect the continuing competitiveness of their product lines in the market.
Michael Porter’s Five Forces model provides a framework to study the global Wi-Fi chipset market. Strategic business managers, trying to gain an edge over competing firms in the global Wi-Fi chipset market, can utilize this model to better understand the industry in which the firm operates. The components of each of the forces and the degree of impact of each component in the context of the global Wi-Fi chipset market have been broken down and analyzed.
Threat of new entrants
The global Wi-Fi chipset market is experiencing high growth. Developing Wi-Fi chipsets requires moderate investment which comprises the cost of raw materials and manufacturing chips. However, high technical expertise is required to understand complex Wi-Fi technologies. Due to the high technological complexity and need for expertise, the new entrants possess a moderate threat to the prominent players in the global Wi-Fi chipset market.
Bargaining power of suppliers
A majority of the consumer electronic devices manufacturers are adopting Wi-Fi chipsets to increase the computing capabilities of their devices. The cost of Wi-Fi chips varies among suppliers, but the per-unit cost of a Wi-Fi chip is relatively inexpensive. Typically, Wi-Fi chips are used in routers, computer laptops, and cellular phones. A Wi-Fi chip can also be used in computers or workstations in a local area network (LAN). With the increasing initiatives by the governments supporting the research and development of Wi-Fi chipsets, a large number of small- and medium-sized enterprises are focusing on designing and manufacturing Wi-Fi chipsets. Due to which a large number of suppliers are available globally to offer Wi-Fi chipsets. With the presence of many raw material suppliers and moderate switching cost, the bargaining power of suppliers is expected to remain low.
Threat of substitute
The substitutes available for Wi-Fi chipsets are Bluetooth chipsets and IoT chipsets. These chipsets are complex to design and require high technical expertise which results in the buyer’s propensity towards these substitutes as moderate. However, the product differentiation is moderate and the companies are investing heavily to leverage the Wi-Fi capabilities and offer differentiated and enhanced chipsets to the consumers. Due to moderate availability of close substitutes, the product pricing offered by the company is moderate as a part of pricing strategy. The threat of substitutes is moderate in the global Wi-Fi chipset market.
Bargaining power of buyers
Globally, the buyer’s concentration of Wi-Fi chipsets and technical expertise among the buyers is moderate due to a lack of technological awareness among them. The buyers are price-sensitive and often opt for outsourcing instead of in-house manufacturing. Moreover, due to moderate brand identity, the bargaining power of buyer is expected to be moderate.
Rivalry
The market is expected to experience high competition among the existing players in the global Wi-Fi chipset market. For maintaining a competitive advantage, the companies are spending a huge share in research and development to offer additional capabilities. Also, the global market is witnessing a high brand loyalty among the consumers owing to the high demand for high computing capability chips with low power consumption. Due to the above factors, the rivalry among the competitors is expected to be high.
