LTE better than LaTE

Friday, September 21, 2007

LTE is better than LaTE! Well, that's the first thing I am taking from Arun Sarin's LTE commitment. The public perception about the company's relationship with Verizon Wireless would have got a fillip after the investor conference. The strategic announcement (if you can call it so) allows for the vision of one unified global technology with the two carriers at the fore-front. And secondly, the timing was important in that this message should get across to the investing public before it is too late.

Besides this, both LTE infrastructure and handsets are expected to be cheaper despite similarities in technology and deployment. There are three reasons for this -
  • There are many more vendors in the LTE space. Ericsson demoed an LTE solution earlier this year. Other infrastructure vendors are already working towards this. Even QualComm(QCOM) is actively working on LTE prototypes and products. The competition is expected to keep the average selling price (ASP) on either end lower than in UMB which is dominated by QualComm on the handset side and a few players on the infrastructure side.
  • Licensing and royalties will be lower in LTE due to the diffused nature of the IP. Compare this against a proprietary UMB that will have QualComm alone laughing all the way to the coffers. This again will have an impact on the ASP.
  • With Sprint-Nextel already putting its weight behind WiMax, the demand for UMB will be much lower resulting in higher costs again.
So, it does make a lot of sense from Verizon's perspective to go with UMB. We will, in a later article investigate the impact of today's event.

Posted by Vijay Nagarajan at 6:00 PM  

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1 comments:

Better LTE than never. :)

Anonymous said...
October 1, 2007 at 11:30 PM  

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