Here’s a follow-up to my blog post on the IHS report on the cost of adding LTE to a mobile phone handset. (See “What’s the current cost of adding LTE to a mobile phone? $39.75 says an IHS report.”) I quickly got this extended reply from John Brewer, Jr. of Vincio LLC in Oregon.
“The iSuppli article only takes into account the semiconductor-related costs of LTE. In addition, an LTE handset will have to include a significantly higher capacity battery to overcome the rather large increase in baseband IC power consumption and decrease in RF power amplifier efficiency relative to 3G. As the battery remains one of the most expensive components in a mobile phone, I’d say add at least $10 to the $40 cost increase iSuppli calculates for LTE.
I’ve been using a Samsung Galaxy S on T-Mobile for three months, running Android 2.2.1. The phone has a 1500 mAHr battery – typical by smartphone standards today. When running WiFi and Bluetooth, I get about 8 hours battery life. For the first time in a decade, I’ve needed to have two batteries to get through a day. And this is a phone operating on an HSPA network, not LTE. Between the significant cost impact of LTE – multiply that cost by 3 to get to the impact on retail pricing – and the very real impact on battery life, it’s hard to see how LTE becomes the mainstream mobile phone networking technology during the next 3 years.
I’ve begun to marvel at the naiveté through which the mobile phone industry’s observers are viewing the transition to LTE from 3G. Don’t misunderstand me – this transition is critical in moving to a broadband wireless service that we all want and dream about. 3G was a tragic band aid, it was stillborn on its “promise” as a technology, the only value it delivered was access to new spectrum. LTE makes sense, it just requires many years of component-level innovation before the handsets are going to deliver on the kinds of performance that we’ve all come to expect from mobile phones.
As a semiconductor guy (well, up to this point at least…) I’m fascinated at what the mobile phone industry has done to the semiconductor industry. Nothing like the promise of billions of units per year to reset an industry model…”
Brewer is Managing Director at Vincio LLC and has 27 years of experience in the wireless industry. He kindly gave me permission to reprint this excellent response and analysis.