The cell-phone industry is expected to experience year-on-year growth largely because of the replacement market. Handset providers are anticipating that consumers will replace their old handsets as new technologies, such as color screens, cameras, and polyphonic sound, become widely available. We are also expecting a slight increase in the U.S. handset market as providers like AT&T Wireless and Cingular transition from TDMA (IS-136) (time-division multiple-access) to the GSM (Global System for Mobile Communications) standard. Globally, we are going to see continued growth from China, which has already surpassed the U.S. in total number of subscribers with approximately 190 million GSM subscribers and 5 million CDMA (code-division multiple-access) subscribers.
GSM is an active and growing segment accounting for 65% of the entire cellular market. GSM will be around for a long time and represents a natural evolution to 3G. In fact, major U.S. service providers are now transitioning to provide 2.5G GPRS (General Packet Radio Service) data services, and they will eventually transition to 3G.
3G is still under development. Most carriers are struggling with developing a revenue-generating business model for their current technology. It's a return versus investment game. 3G will eventually happen, but in the meantime, carriers will roll out 2.5G products like GSM/GPRS and EDGE (Enhanced Data GSM Environment). GPRS is rolling out as we speak with the carriers testing a variety of new data services.
My company's core wireless product is the Aero GSM transceiver family. It is a multiband solution that eliminates SAW (surface acoustic wave) filters, voltage-controlled-oscillator (VCO) modules, and a number of other discrete components resulting in the smallest RF front end available today. The Aero transceiver is the only CMOS RF transceiver on the market, which is a significant step in the integration path of the wireless handset. In less than a year, we have shipped over 8 million units to customers such as Samsung, BenQ, Wavecom, Compal, and Sendo. We also make a wide range of frequency synthesizer chips for cell phones, 802.11b, and ISM (industrial, scientific, medical) transceivers.
We continue to develop the Aero transceiver by further integrating external components like the crystal oscillator module and synthesizer. The ultimate goal is for the Aero transceiver to be the industry's smallest dual GSM/GPRS/EDGE and W-CDMA (wideband-CDMA) solution.