The LTE handset market is going to boom this year, with sales growing 10 times to 67 million units, according to a new report from research firm Strategy Analytics.
Strategy Analytics forecasts LTE handset shipments will grow to 67 million units this year. Click here for details.
Strategy Analytics thinks this year will be a "breakout" year for LTE handsets, as sales jump from 6.8 million units in 2011 thanks in large part to aggressive LTE network expansions by carriers. The surge will be led in large part by Apple (NASDAQ:AAPL), HTC and Samsung, the firm predicted, but noted that the likes of Fujitsu, LG, Motorola Mobility (NYSE:MMI), Nokia (NYSE:NOK) and Pantech will also seek to tap surging demand for the devices. The forecast roughly tracks with a separate one made by research firm In-Stat, which predicted in October 2011 that global LTE handset sales would hit 154 million in 2015.
While LTE handsets will remain a tiny fraction of overall handset sales in 2012, the growth will be driven by carriers building out their networks and then seeding LTE devices into the market. The biggest growth markets will be the United States, Japan and South Korea, where operators are racing to build out LTE networks, Strategy Analytics said.
Verizon Wireless (NYSE:VZ), which plans to expand its LTE network coverage from around 200 million POPs currently to 260 million by year-end, currently offers 12 different LTE smartphones and plans to only introduce smartphones with LTE capabilities this year. AT&T Mobility (NYSE:T), which plans to expand its LTE network from 74 million POPs to around 150 million by the end of the year, currently offers five LTE smartphones. Sprint Nextel (NYSE:S), meanwhile, plans to launch LTE in 10 cities by mid-year and has said that around 15 LTE devices, including handsets, tablets and data cards, are on track to be launched in 2012.
Despite the boom, there are potential pitfalls for carriers, Strategy Analytics warned. "The LTE phone segment is expanding at a rapid rate this year, but there will undoubtedly be growing pains in this early phase," Strategy Analytics analyst Tom Kang said in a statement. "Many LTE phones and data plans will be relatively expensive, which means operators will need to invest generous subsidies to make 4G more affordable for subscribers. Meanwhile, consumers will be concerned about LTE usability issues, such as shortened battery life, excessive device weight or sudden bill shock caused by high data consumption."
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