November 2009

The Mobile Internet Tsunami
is Real
By David J. Aldrich, President and CEO, Skyworks Solutions, Inc.

Over the last several months, many of you may have heard about the “Mobile Internet Tsunami.” It has been a topic of conversation in the semiconductor industry, as well as the buzz in the investment community, as many try to determine if it is real, what impact it will have, and who stands to benefit from it.

To be clear, first let’s define what we mean. Jim Cramer, host of CNBC’s “Mad Money,” recently coined the term “Mobile Internet Tsunami” to describe the phenomenon where consumers are requiring mobile devices with faster data rates, improved video, and a superb Web connection – all in the palms of their hands. He believes that this demand is the biggest secular growth trend in technology, which he expects to parallel the PC revolution of the 1990s and the Internet explosion of late.

I agree.

In my opinion, on the high-end of the handset market, smart phone growth - - - which is at the heart of the Mobile Internet Tsunami - - - is a macro-trend that is transforming our industry. These multimedia platforms are fostering an industry-wide sea change. In effect, the smart phone is moving from a higher end tool reserved for the corporate road warrior to an increasingly mainstream communication platform necessity – one that is truly changing the way in which we live, work and play. Social networking sites like Facebook and Twitter are only furthering this trend. Furthermore, this segment is being embraced and widely promoted by carriers who benefit from the highly profitable data services revenue stream as subscribers move to enhanced data plans.

Broadly speaking, the desire by consumers to access real-time data and information – whether it is via a mobile phone, in their car, or in their home – is driving an increasing demand for wireless functionality across a diverse set of devices and creating this profound change. The growth estimates vary among analysts, but there is no denying that the demand exists, and expectations among all are that it will continue.

So who benefits from this trend and will it last? Well, first of all, semiconductor providers who can deliver solutions that enable mobile connectivity will benefit. This includes those with the broadest, most highly integrated and most comprehensive suite of cost-effective devices that meet the demanding technology requirements. Another beneficiary, as mentioned above, are the phone carriers who enjoy greater average revenue per user (ARPU). Last, but not least, we as consumers benefit. The mobile phone has already improved our quality of life. In a relatively short period of time, it has become a camera, music player, picture and text messaging platform, gaming device and GPS system, to name just a few applications we now enjoy. When you add Internet functionality, other potential applications are only limited by one’s imagination. Imagine the impact these cellular phones and other mobile devices will have as they proliferate around the world.

Yes. The Mobile Internet Tsunami is real.

Skyworks Solutions, Inc.
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