Popularity of LTE Technology
Somnath is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The world is embracing LTE (Long Term Evolution) technology with multiple bands.
Long Term Evolution (LTE) is a radio platform technology that will allow operators to achieve even higher peak throughputs than HSPA+ in higher spectrum bandwidth. The overall objective for LTE is to provide an extremely high performance radio-access technology that offers full vehicular speed mobility and that can readily coexist with HSPA and earlier networks. Because of scalable bandwidth, operators will be able to easily migrate their networks and users from HSPA to LTE over time.
LTE capabilities include:
- Downlink peak data rates up to 326 Mbps with 20 MHz bandwidth
- Uplink peak data rates up to 86.4 Mbps with 20 MHz bandwidth
- Operation in both TDD and FDD modes
- Scalable bandwidth up to 20 MHz, covering 1.4 MHz, 3 MHz, 5 MHz, 10 MHz, 15 MHz, and 20 MHz in the study phase
- Increased spectral efficiency over Release 6 HSPA by two to four times
- Reduced latency, up to 10 milliseconds (ms) round-trip times between user equipment and the base station, and to less than 100 ms transition times from inactive to active
LTE technology is much more fragmented than the previous third-generation wireless technology, making it more difficult to make LTE phones that work seamlessly around the world. While building a phone that supports multiple bands of LTE is possible, it presents a significant technical challenge to design chips needed to support all of the different bands.
Apple’s (NASDAQ: AAPL) new iPhone5 will have better worldwide support for LTE than the latest iPad. While the iPad supports LTE spectrum bands used only in the U.S. and Canada, the new iPhone will apparently work with multiple bands, making it compatible with networks in Europe and Asia as well.
And as much as it presents an engineering challenge to achieve multi-spectrum capabilities, Apple has one goal in mind for the long-term life of its products, and that’s simplifying manufacturing processes and making it easier to make big profit margins on products sold. Apple’s margins are notoriously high when compared to their competitors, and a big part of what Apple’s success in terms of market cap and cash reserves are based on, more so than simple volume of sales. Making a single iPhone that works on LTE across all of its major markets will be a key help to maintaining those margins.
In Europe, the availability of LTE wireless service lags behind some other parts of the world. For the time being, there is LTE service in Scandinavia, as well as some in Germany and elsewhere. But in many places, it is still in its infancy.
Android phones supporting LTE are currently being sold in 11 countries including the U.S., Japan, South Korea, Australia and Germany.
Motorola Mobility (NYSE: MMI) also have few handsets like Droid Razr series which supports LTE technology. Though the recent acquisition of MMI by Google (NASDAQ: GOOG) made them reduce around 4,000 jobs at Motorola Mobility and will close or consolidate about one-third of its 90 locations. The cuts represent around 20% of Motorola Mobility’s 20,000 employees, and largely 7% of Google’s work force. Two-third of the jobs reduced will take place outside of the U.S. We need to keep a close look at the future developments at MMI.
The inclusion of LTE technology in iPhone5 will definitely increase its worldwide acceptability which will directly increase the sale of the new device. I strongly believe that the shares of Apple will be on the rise.
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