September 24, 2013
The coverage of LTE networks is becoming ubiquitous enough that the market for single-mode LTE chipsets is growing, according to Altair Semiconductor.
Eran Eshed, co-founder and vice president of marketing at Altair, said that while cellular phones still require fall-back networks and will for some time, data-centric applications are starting to move toward LTE in certain markets.
“Rewind two years, that coverage wasn’t there,” Eshed said. Now, he added, in key markets such as Japan, Korea and the U.S., the concept of not having to fall back on 2G or 3G networks is getting a warmer reception.
“We’re starting to see a paradigm shift in the market,” he said. ”A single-mode market with data-centric applications is starting to happen.”
Altair raised $25 million from existing investors in July of this year to strengthen its position in the single-mode LTE market, as well as to support high-volume product deployments. Swiss company u-blox selected Altair’s chipsets for roll-out by the end of this year in its TOBY-L100 single-mode LTE products, which include tablets, mobile routers and set-top boxes, and high-speed machine-to-machine applications like digital signage, security systems and mobile health.
Multi-mode chipsets are more expensive. Eshed noted that in commercial devices such as tablets, an iPad with cellular connectivity costs much more than a tablet with Wi-Fi only. Apple’s website lists a $130 difference in the up-front cost between the Wi-Fi only version and the cellular-enabled iPad.
“Unless and until you are able to get the cost of adding LTE or cellular connectivity to the device below certain thresholds, you’re not going to see significant uptake,” he said. He said Altair’s final goal would be to get the cost of adding LTE to a device on par with the cost of Wi-Fi, but “we’re not quite there yet. And the market is not there yet in terms of the scale.”
In M2M in particular, low cost is key to the success of the model.
“The whole idea that multi-mode is better than single-mode — it’s only better until the point where you’re starting to pay too much for it, and it becomes prohibitive in terms of the business model,” Eshed noted.
Eshed said that different service providers in markets where LTE coverage is not near 100% are still exploring single-mode devices as play in which users may be willing to accept an experience with coverage gaps so long as it is correspondingly less expensive. Altair’s chips are powering Yota Devices‘ dongles in Russia, which has limited LTE coverage but where the devices are marketed as a lower-cost option for connectivity at home or on the go.
Eshed said the fact that the LTE market is fragmented, with widely varying spectrum bands being used around the world, creates small and mid-sized markets that can be difficult to address without a flexible solution. At the same time, he said, “if there had been a single band or set of bands and everything was streamlined, this would’ve been a much tougher play.
“We’re very happy that this fragmentation exists,” he added. “We’re shipping a lot of chips into markets that maybe other vendors would say ‘it’s too much work.’”
He said that Altair has “a few key designs with a few key carriers” in a first wave of LTE-only devices with “very unique positioning.”
“We truly believe that these are very attractive alternatives to much higher-cost multi-mode devices,” he said. “We think that the world is changing.”