Nokia Lets More Chipmakers Join In

"We anticipate the wireless market will undoubtedly remain noisy in months ahead as OEMs continue to diversify their chip suppliers," TI Investment Relations Manager Ron Slaymaker told analysts in a quarterly earnings conference call last month.

TI claims it, too, is benefiting from the trend, pointing to its recent deal to develop 3G chips with handset maker Sony Ericsson.

Some analysts see another motive in the cell-phone makers' rush to diversify their chip suppliers.

With the wireless market awash in myriad transmission and technology standards, cell-phone makers are sometimes limited to offering products based on the technology offered by their chip suppliers, says Mory Marshall, of consulting and market research firm Semiconductor Partners.

Signing on more chip suppliers can change that equation.

The deal with STMicro "indicates a desire on Nokia's part to have a greater control over their future technology," says Marshall.

And by playing the chipmakers off of each other, the phone makers will clearly be looking for better component prices -- something that won't help profit margins at chipmakers.

Of course, declining prices are already a fact of life in the chip world.

Now the door to greater overall sales is open.

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