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Quad-core phones will be big, but not everywhere

While the U.S. waits for its first quad-core phone, much of the world may not care.

Huawei unveiled its quad-core Ascend D Quad at Mobile World Congress in February.

Earlier this week, I looked at some of the technical considerations of creating a quad-core smartphone. Although I was able to delve into seven myths about quad-core phones, there's still the business side to consider.

Make no mistake, processors are big business. Every phone needs one, and there are now even more players competing to supply them. In 2010, chipmakers earned $2.385 billion in global sales of mobile phone application and multimedia processors, according to Gartner analyst Mark Hung. Of that figure, smartphones drove $1.416 billion in revenue.

From a different perspective, smartphone sales are growing at a rapid pace. 491 million smartphones shipped globally in 2011, Gartner analyst Jon Erensen told CNET, which is a 60 percent surge from 2010.

"This year," Erensen said, "we expect it to grow to about 653 million units, another 33 percent growth over 2011." That figure doesn't even account for the 67 million tablets that were shipped, up from 18.4 million in 2010. Chipmakers are one segment that benefits from increased smartphone, and tablet, sales.

(It's important to note that the sums above represent the number of devices "shipped" to distributors, not necessarily the number of devices that customers actually bought.)

Where will quad-core soar?
In the U.S., and in other markets where premium smartphones flourish, quad-core phones will begin to replace dual-core smartphones, and the processor's performance will continue to be an important selling point. (A quad-core tablet is available in the U.S., but quad-core smartphones are still to come.)

Yet that's a stance that much of the world won't reciprocate, at least not for some time.

"In China, you're seeing an explosion of smartphone growth," said Gartner's Hung, adding that only a portion of the mobile market caters to the highest end of the line. Most is geared toward low-to-midrange smartphones. This is a pattern that Hung and Erensen say extends to many emerging markets.

Targeting the most lucrative business opportunity in various countries and regions is part of any company's strategy, and it's one that chipmakers and their partners, the device manufacturers, know well. Just today, Nokia CEO Stephen Elop shared plans to redouble efforts in China, where, CNET's Roger Cheng points out, sales skew toward entry-level phones.

It's the same story with sales in emerging regions like much of India, South America, Africa, and the Middle East, where the mighty low-and-midrange is seeing strong growth. Device and component manufacturers are acutely aware of the trend. In fact, in February, Microsoft revised some of its Windows Phone strictures to make it easier to put its OS on humbler phones.

So while "it's obviously a technical feat to put out a quad-core processor," according to analyst Hung, in terms of the total worldwide market, the thirst for quad-core "is actually not that big."