Nothing is hotter now than the cell-phone business,
which is driving semiconductor sales. And while
cell phones are the biggest contributor to electronics
growth, many other wireless technologies keep
expanding as we drive toward a totally wireless society.
In 2007, annual cell-phone sales exceeded 1 billion handsets
for the first time. Experts say 2008 will see 1.4 billion
sales. The total number of U.S. subscribers passed 250 million
in 2007, but the market is nearing saturation.
Despite this impressive number, the U.S. is small potatoes.
China saw about 400 million handset sales in 2007, and that
is only a fraction of the potential there. India is another
growing customer, second to China in volume.
3G Rollout
Third-generation (3G) cell phones based on
the ITU UMTS WCDMA standards set by the Third Generation
Partnership Project (3GPP) are slowly but surely being
bought and deployed, especially in the larger cities of Asia, Europe,
and the U.S. The U.S. 3G rollout is going more slowly.
But Qualcomm’s cdma2000 EV-DO technology, which is used
by Sprint Nextel and Verizon, is helping it along.
The Rev. A and B versions of EV-DO are even faster and
becoming more widely deployed in cell phones and notebook
data cards. Some High Speed Packet Access (HSPA)
3G technology that boosts WCDMA connection speeds to
more than 3 Mbits/s are also coming online. While 3G adoption
is roughly only 50% of what it could be worldwide (even
less in the U.S.), it is expected to ramp up as the carriers
build out their networks and add services and as new phones
become available.
Progress In 4G
The development of fourth-generation
(4G) cell-phone technologies continues to progress, with the
Long Term Evolution (LTE) standard apparently well in the
lead for future adoption. LTE is still under development in
the 3GPP, but is expected to be ratified in 2009.
This is the upgrade path that current GSM/EDGE/
WCDMA carriers like AT&T and T-Mobile will adopt in the
future. It uses orthogonal frequency-division multiple access
(OFDMA) and promises data speeds to 100 Mbits/s.
Qualcomm’s Ultra Mobile Broadband technology is
also 4G and uses OFDMA. It is the 4G upgrade path for
cdma2000 EV-DO carriers. But LTE now has the support
of cdma2000 EV-DO carrier Verizon and has just about
clinched the title of 4G winner.
The "Open" Movement
U.S. cell-phone carriers only offer
the products and services they want you to have in their
so-called “walled gardens.” Many experts say this limits their
possible applications. Google wants to change this approach,
intending to enter the cell-phone business and provide open
products and services.
With the real possibility of Google becoming a buyer of
spectrum in the forthcoming FCC auction and thus competing
in the wireless business, the big carriers have beat
Google to the punch. Verizon and more recently AT&T
announced that they would immediately open their systems,
giving subscribers a chance to buy other phones and use
other applications.
Meanwhile, Google’s recent announcement of its Android
Linux-based operating system software for developing open
applications has generated lots of interest in developing
third-party software and applications for cell phones.
The Femto Phenomenon
A recent upsurge in interest in
femtocells will further roil the cell-phone business. A femtocell
is a home basestation that is designed to bring superior
cell coverage inside homes (see the figure). With over 50% of
all cellular calls coming from inside buildings and homes,
many customers have discovered just how unreliable wireless
can be with multiple walls and other obstructions.
The femtocell is a full-blown basestation, but operates at
low power to prevent spillover into the marco network or
into your neighbor’s home. It connects to your DSL or cable
TV high-speed Internet connection for backhaul to the
carrier. There’s lots of interest, with carriers studying it and
preparing network changes to accommodate it. While 2008
is expected to be a year of study and development, look for
real femto-cell products and services in 2009.