Deutsche Bank Markets Research North America United States 7 MT Wireless Equipment 'or indica, Signals to Noise (S2N) MWC 2014: It is an LTE world S2N #491 - LTE proliferation and cheaper handsets push data demand The buzz returned this year to Mobile World Congress and we contributed as best we could, running between meetings, downing café con leches and snacking on jamon sandwiches. What was different was the focus of the buzz, which if last year was centered on smartphone growth and LTE unit volumes, then this year it was infrastructure. Almost every network equipment vendor we met with sounded optimistic about operator spending in the year ahead, especially with regard to LTE. State of the Baseband number two still undecided As most of our readers know, we suggested a few months ago that Quakomm would see little competition in 2014. In short, Mobile World Congress only reinforced this viewpoint. We met with most of the merchant baseband players and a number of industry contacts across the handset foodchain, and what is increasingly clear to us, is that this year the fight will be for a foothold, in hopes to make a play for meaningful volume, and the second spot, behind Qualcomm in 2015. While we have argued that Mediatek was the clear number two behind Quakomm (they remain so in unit volumes and profits), this point has been muddied a bit by the mixed progress in LTE of a few others. Bottom line - all of QCOM's competitors have their challenges, which we detail inside. Smartphones high end struggles to differentiate. while Firefox redefines cheap It is strikingly obvious that differentiating on the high-end with hardware is limited. Every major handset OEM at the show had shiny new handsets (and tablets), as well as a wearable to go along with it. The good news for many across the globe is that smartphones are only getting cheaper. Firefox (Mozilla) took this one step further, introducing a $25 smartphone at the show. The fron