The desire of cellular operators to increase average revenue per user (ARPU) via handset capability has left designers of advanced terminals facing a fundamental choice. They can either select chipsets from conventional semiconductor suppliers, with spare capacity built-in or 'sand-boxed' in the modem CPU/DSP for applications; or they can select applications devices that offer scalable capability to suit the target product feature set, often as a co-processor to be used in conjunction with a baseband chip. The article looks at why it makes sense to design the modem and applications functionalities as separate entities.