LTE chips: A leading indicator of mainstream adoption?

As the industry moves from 3G to 4G technologies, LTE is coming into its own. In the U.S., Verizon Wireless has already targeted at least 25 markets for coverage by the end of 2010. MetroPCS is also launching in 2010 and AT&T Mobility has trial plans for 2010 with deployment targeted for 2011. These LTE service launches are motivated in part to counter WiMAX service offerings from Sprint Nextel and Clearwire, in part to fulfill promises made during recent spectrum auctions, and in part due to improved efficiencies offered by the technology. With major U.S. carriers committed to LTE technology, a major determinant in the long-term success of LTE service offerings is the timely availability of LTE silicon.   

While LTE will continue to be driven by evolving standards and specifications, it is important to note which LTE silicon vendors have gained time-to-market advantages by supporting key elements of the standard early on. The 3GPP Release 8 standard was frozen in January 2009, and established LTE characteristics such as support of up to 100 Mbps downstream and 50 Mbps upstream speeds (under optimal conditions), and the dual support of frequency division duplexing (FDD) and time division duplexing (TDD). However, there are a wide range of mobile silicon vendors with differing approaches to implementing those standards. The unencumbered startups and independent mobile silicon vendors targeting the LTE silicon space are leveraging their WiMAX silicon roots in order to address LTE opportunities. These include vendors such as Beceem, Sequans and Wavesat, who position themselves as on the leading edge of LTE silicon deployment.

On the other hand, the established and mature mobile silicon vendors such as Qualcomm, Infineon, Fujitsu and ST-Ericsson can leverage various portfolio assets to create highly integrated LTE silicon platform solutions. For example, Qualcomm and Fujitsu have crafted LTE silicon solutions that leverage their existing legacy support for 3G devices to create multimode, multichannel RF transceivers to support legacy radio, dual-band radio and network roaming in a single package. They are leveraging their product architectures from already established 3G HSPA+ assets in order to add LTE support quickly, and create a multiband receiver.  ST-Ericsson is taking a more targeted approach, betting on specific market segments and has already launched a LTE-only platform solution.

The table below shows some of the key mobile silicon vendors in the mobile device silicon market that are at least in the sampling stage for LTE mobile devices. Vendors will generally not deploy equipment or services based on sample silicon, but prefer to wait for the production silicon.

NA = not announced

Beceem is a start-up that has leveraged its WiMAX experience to create a dual mode LTE/WiMAX device for roaming or back-up and is shipping sample product in substantial volumes in the support of early field trials. Sequans, another start-up, is fielding an LTE-only solution, although the company has experience in WiMAX, it made a decision to go to market with LTE-only silicon. The LTE platform M700 from ST-Ericsson is unique in that it's limited to the single access technology of FDD-LTE. While this is ideal for fixed terminal applications and in-country networks where external roaming is not supported, it's not viable for a majority of smartphone devices and network services requiring alternative access for roaming and back-up. LTE-only devices are optimal for a greenfield deployment where legacy support is not required. On the other hand, legacy providers such as Qualcomm and Fujitsu have integrated multimode 3G/LTE support into their overall LTE solution mix, which enables vendors to participate in design competition quicker, leveraging previous development work. Qualcomm also promotes its early to market support of LTE standards and touts itself as first to market with multimode 3G/LTE solutions (e.g., MDM9x00). Again this fits better the support model for major wireless carriers with large legacy installed bases planning to migrate their pre-4G networks to 4G-based network and services. 

While it might seem as if there are enough device types available, the actual number is small and vendors are targeting specific market niches as shown from the differences in implementation and approaches. This is typical for an emerging market and new technology. The overall timeframe for widespread network deployment of devices and services based upon LTE is probably going to take longer than the service providers, equipment vendors and market hype is projecting. The chips currently available represent first generation solutions and are only beginning to be produced in large quantities for the mass market. There are always the lessons learned from the active field trials with a new technology and this provides feedback to the developers and equipment manufacturers to improve or modify the equipment. Battery life optimization, needed for mainstream adoption, usually does not occur until second or third generation silicon. There is also the LTE standards process that is developing future 3GPP Release 10 (i.e., Advanced LTE), as the final version which will need to be incorporated into the chipsets themselves to maintain compliance over the long-term while maintaining backwards compatibility.

While there will be LTE-enabled smartphone devices available at the end of 2010 and more service provider networks supporting LTE, it will not become a mainstream technology in the U.S. over the next 12 months. The LTE silicon chip vendors will need to go through another engineering sample-to-production cycle based upon the results of field trials. The device manufacturers will need to complete another product design cycle based upon this next generation offering of LTE silicon. Although both design cycles will be faster than the original, each iteration still takes time. With all these factors taken into consideration the timeframe for mainstream adoption of LTE seems to fit a more mid-2012 to early 2013 time horizon.      

Jeff is a senior analyst in the Mobile Device Silicon practice at Current Analysis and monitors the technology, product and partnership initiatives of the mobile device silicon vendors who create, design and bring to market the high performance integrated circuits and chipsets which enable mobile devices. Contact Jeff at [email protected] or follow him on Twitter @sirronsilicon.