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| LTE Handsets for $200 in 2012 |
| Written by Dave Burstein |
| Monday, 19 September 2011 17:32 |
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Takeoff possible then. CFO Braxton Carter of MetroPCS told investors the handsets are currently too expensive to attract many customers. After subsidy, MetroPCS is offering the handsets for $199 & $299, which implies a manufacturer price over $400. By the second half of 2012, he expects handset prices of $200 to drive material growth. At that price, he can sell them to retail customers for $99. Verizon CFO Fran Shammo, also speaking to the Merrill Lynch conference, pointed to battery life as the other major obstacle to LTE. He hopes to overcome that as well in 2012.
LTE phones eat power and are expensive because currently they effectively contain both a 3G and 4G system. LTE requires significantly more processing power, hence a larger, power-hungry chip. The speed is much higher, also putting demand on the processor. Even the most advanced network, Verizon's, only covers about half of the country, so the phone also needs a robust 3G capacity. Especially at Verizon, that's a different technology and hence requires components and power.
Chipmakers including Qualcomm, Broadcom and Marvell believe they have solved the problem with the next generation of wireless chips at 28 nm, now starting to sample. The smaller design rule directly reduces power while allowing far more functions on-chip including the 3G fallback. Limited quantities of 28 nm chips are coming from TSMC, the largest foundry. 28 nm production at TSMC is virtually sold out for the next six months, EE Times reports, because Apple is shifting the iPhone/iPad tablet to TMSC from Samsung.
As the LTE chips mature and the foundry capacity becomes available, everyone expects dramatic change in the LTE handset market.
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