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Nov 18, 2013

The Era of LTE-Only Tablets Begins With …

By Sascha Segan PC Magazine

Verizon’s Ellipsis tablet is the vanguard of a new era. It’s the first LTE-only device we’ve seen in the U.S., and there are plenty more to come. That’s because LTE-only tablets are going to cost a lot less than 3G/LTE tablets like the new iPads, said Eran Eshed, co-founder of Altair Semiconductor, which makes the LTE chipset in the Ellipsis.

“The cost of adding a multi-mode module today, the pure bill of materials module cost, is in the $65-$80 range. Multiply that by channel margins and by the time it reaches the consumer, you’re looking at $130-$150 extra. In the case of LTE-only, it’s roughly half that from a cost perspective,” he said.

What you give up, of course, is the ability to fall back to 2G/3G when you’re out of LTE coverage.  Verizon is introducing the Ellipsis now because it has reached effectively nationwide LTE coverage. But the company’s CFO, Fran Shammo, has admitted that Verizon’s 700Mhz network is now oversaturated in New York and Los Angeles, bumping many phone owners down to 3G.

That won’t happen with LTE-only devices, because Verizon can choose to keep the LTE-only devices on the network and bump down other gadgets, Eshed said.

“In contrast to coverage limitations, capacity is completely under control of the carrier. If I’m Verizon, I know if a specific subscriber is a 4G-only subscriber. There’s obviously no way I’m going to offload this subscriber to something that doesn’t exist,” he said.

Verizon’s also expanding its network to the 1700Mhz and 1900Mhz bands, although the current Ellipsis tablet doesn’t support those bands because it’s been in the works so long, Eshed said. Altair’s chipsets can support any bands a carrier wants – the carrier just has to ask, he said.

LTE-only tablets will appear next year because of the up-to-$75 price cut over 3G. “The world’s top makers of notebooks and netbooks” are also preparing LTE-only devices for next year, Eshed said, and while Verizon is in the lead, the other carriers will probably follow as soon as they feel their networks are sufficiently built out.

But don’t expect LTE-only phones soon, Eshed said. While carriers are experimenting with voice-over-LTE (VoLTE) to replace older voice systems, it’s going to be years before those are reliable enough in the U.S. to do without 2G and 3G.

“We’ll see these in the market as very soft-launched devices or services in the back half of 2015, becoming more mainstream in ’16 and beyond,” he said.