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LTE Devices and Applications - Next-generation mobile networks driven by video services

Long Term Evolution (LTE) is a next-generation cellular network technology, sometimes referred to as 4G. As described in this report, LTE is the technology of choice for most mobile operators, and with strong momentum, we expect it to be the long-term, next-generation network technology of choice. LTE has already overtaken WiMAX subscriptions in 2011, and the range of LTE devices has increased elevenfold in the past year. The largest LTE device segment will be PCs through 2014, as operators initially focus on mobile broadband access for PCs. But after 2014, the PC segment will be replaced by smartphones, with operators announcing more and more LTE models. The heavy emphasis on videos will drive mobile data usage for operators, as will the fact that LTE is well-suited for cloud-based computing thanks to its high bandwidth. In 2016, Pyramid Research forecasts there will be 592m LTE subscriptions, equivalent to 7.3% of all cellular subscriptions at that time.

Key findings

The main findings of this report are:

  • LTE is gaining strong momentum and has already overtaken mobile WiMAX subscriptions during 2011. To date, 35 mobile operators have launched commercial LTE networks, a range of 197 devices have become available and the technology is maturing since the first network became live in late 2009. In 2016, Pyramid Research forecasts there will be 592m LTE subscriptions, equivalent to 7.3% of all cellular subscriptions at that time.
  • The device range is booming, having increased elevenfold between the end of 2010 and October 2011. Three out of five device models are discrete modems, either routers or PC add-on devices. Samsung has shown the strongest support for LTE devices, offering a range of different devices and providing the largest range of smartphones and tablets thus far.
  • The initial focus of all operators is mobile broadband access for PCs. These subscriptions represent around 80% of all mobile data traffic, even though they account for fewer than 4% of mobile subscriptions. Furthermore, they require no voice support, devices are low-cost, they are easy to upgrade, and they target high-end users, typically in the business market. This will remain the largest LTE device segment of subscriptions until 2014. In 2016 we forecast there will be almost 200m PC and hotspot LTE connections, equivalent to 33% of all LTE subscriptions. This will be equivalent to 29% of all PC mobile broadband subscriptions at this time.

Exhibit ES: LTE subscription breakdown by device, 2009-2016

Source: Pyramid Research

  • The availability of LTE smartphones has been limited to a handful of operators, but this will change in the coming months as more LTE bands are supported. Of the 27 models announced, all but two are on the Android platform, all but two have a screen size of 4" or more, and almost all have front-facing cameras. There is also strong support for video with HDMI, MHL and/or DLNA connectivity as well as a number of preloaded video applications. As mentioned, many LTE smartphones support hotspot functionality and so can act as a LTE modem for typically 5-10 devices. Smartphone LTE subscriptions are expected to become the largest device segment from 2014; in 2016 we forecast 339m LTE smartphone subscriptions, equivalent to 57% of all LTE subscriptions.
  • The Android platform is strengthening its market position by dominating early LTE devices. In particular, it is putting pressure on Apple at the high end of the smartphone and tablet market with virtually all LTE products in these segments on the platform. This is beneficial for operators in order to increase device competition and could also enable certain applications, such as mobile video calling, to be driven on the Android platform.
  • Tablets are expected to be a sweet spot for LTE. Not only is there strong growth in the overall tablet market, which is beginning to impact PC sales, but also the form factor is well-suited to video services. However, Pyramid Research believes that while tablets will be a strong driver of LTE adoption, most users will choose to separate their tablet and mobile broadband access purchase, as is often the case with embedded PCs. Therefore we expect that in most cases, tablets will access LTE via Wi-Fi. This is further driven by the fact that most LTE smartphones support Wi-Fi hotspot functionality, and so can act as the LTE modem. However, the simplicity and subsidization of tablets by mobile operators will be attractive also and drive the number of LTE-embedded tablet subscriptions to 45.0m, equivalent to 7.6% of all LTE subscriptions.
  • While we expect that machine-to-machine LTE subscriptions will be limited during the forecast period, there are some high-value applications already becoming available. In particular, LTE provides the requirements to support live TV video footage, with significant cost benefits for TV broadcasters. However, the vast majority of M2M subscriptions require very limited bandwidth and traffic volumes are low. In 2016 we forecast that just 1.7% of LTE subscriptions will be M2M devices, equivalent to 10m.
  • Video applications are the key focus for LTE. Video accounts for around 40% of mobile data traffic, and LTE enables operators to provide the capacity to better support such services. User-generated content and video streaming are the key mobile video segments. Mobile video calling is also an important focus area for LTE operators, and we expect to see growth in its adoption but not mass market usage.
  • LTE's high bandwidth and low latency make it well-suited to cloud-based services. Several LTE operators have announced cloud-based services in conjunction with their LTE capabilities, mostly focusing on offering enterprise services. NTT DoCoMo has also announced the availability of its cloud-based gaming service on the back of the launch of its first LTE tablet devices.

Key questions answered

  • What is the potential size of the LTE market?
  • What different approaches are operators taking in launching LTE networks?
  • What makes up the key components of the LTE value chain?
  • What are the key applications for LTE?
  • What are the regional differences behind the dominance of certain devices in terms of LTE subscriptions?
  • How will the strong projected adoption of tablets impact LTE subscription growth?
  • Which operators are best-positioned to lead in terms of the LTE handset range?

Case studies

  • Verizon Wireless (US)
  • AT&T (US)
  • NTT DoCoMo (Japan)
  • SK Telecom (South Korea)
  • TeliaSonera (Sweden)
  • Smart Communications (Philippines) and MTS (Uzbekistan)
  • Mobily (Saudi Arabia)
  • Vodafone (Germany)

Companies mentioned in this report

  • Acer
  • Alcatel-Lucent
  • Apple
  • AT&T
  • Cisco
  • Clearwire
  • Deutsche Telekom
  • Ericsson
  • Etisalat
  • Fujitsu
  • Glu
  • Google
  • HP
  • HTC
  • Huawei
  • Hulu
  • KDDI
  • LG
  • MetroPCS
  • Microsoft
  • Mobily
  • Motorola
  • MTN
  • MTS
  • NEC
  • Netflix
  • Nokia
  • NTT DoCoMo
  • Pantech
  • RIM
  • Samsung
  • SK Telecom
  • Spotify
  • Sprint
  • Starhub
  • STC
  • TeliaSonera
  • T-Mobile
  • Verizon
  • Vodacom
  • Vodafone
  • Yota
  • ZTE

Table of Contents

Table of exhibits

Companies mentioned

Acronyms and abbreviations

Executive summary

Section 1: Market overview and background

  • 1.1. Overview and definition
  • 1.2. Current LTE status and operator approaches
  • 1.3. LTE value chain

Section 2: LTE devices

  • 2.1. Overview
    • 2.1.1. Android dominates early smartphone and tablet sales
  • 2.2. PC add-on devices and hotspots
  • 2.3. Smartphones
  • 2.3. Tablets
  • 2.4. Other devices (M2M)

Section 3: LTE applications

  • 3.1. Overview
  • 3.2. Cloud and business services driven by LTE
  • 3.3. Operator smartphone and tablet services
  • 3.4. Mobile video
    • 3.4.1. Mobile user-generated content: YouTube
    • 3.4.2. Mobile video communication applications
  • 3.5. Multiplayer gaming

Section 4: Mobile operator case studies

  • 4.1. Verizon Wireless (US)
  • 4.2. AT&T (US)
  • 4.3. NTT DoCoMo (Japan)
  • 4.4. SK Telecom (South Korea)
  • 4.5. TeliaSonera (Sweden)
  • 4.6. Smart Communications (Philippines) and MTS (Uzbekistan)
  • 4.7. Mobily (Saudi Arabia)
  • 4.8. Vodafone (Germany)

Related resources

Table of exhibits

  • Exhibit ES: LTE subscription breakdown by device, 2009-2016
  • Exhibit 1.1: Mobile subscriptions growth, 2007-2016
  • Exhibit 1.2: Selected LTE network launches and highlights
  • Exhibit 1.3: Access, devices and content
  • Exhibit 1.4: Mobile data volume and revenue growth
  • Exhibit 2.1: LTE devices growth, 2010-2011
  • Exhibit 2.2: LTE device range, April 2010, December 2010, July 2011 and October 2011
  • Exhibit 2.3: LTE subscription forecast by device, 2009-2016
  • Exhibit 2.4: Breakdown of LTE subscriptions by device by region, 2016
  • Exhibit 2.5: LTE hotspot devices
  • Exhibit 2.6: Voice over LTE approach options for operators
  • Exhibit 2.7: Announced LTE smartphones
  • Exhibit 2.8: LTE tablets
  • Exhibit 3.1: Key LTE applications by device
  • Exhibit 3.2: Selected US consumer LTE smartphone applications
  • Exhibit 3.3: NTT DoCoMo LTE tablet applications
  • Exhibit 3.4: Subscription and data volume breakdown by device, Vodacom South Africa, 2010
  • Exhibit 3.5: AT&T subscriptions by device, Q2 2010 and Q2 2011
  • Exhibit 3.6: Percentage of mobile data traffic which is video, by operator network speed
  • Exhibit 3.7: Mobile video traffic breakdown by application
  • Exhibit 3.8: Mobile YouTube video views per day
  • Exhibit 3.9: Selected mobile video calling applications
  • Exhibit 4.1: Verizon LTE commercial devices
  • Exhibit 4.2: Verizon LTE smartphone applications
  • Exhibit 4.3: AT&T LTE commercial devices
  • Exhibit 4.4: NTT DoCoMo LTE commercial devices
  • Exhibit 4.5: NTT LTE tablet applications
  • Exhibit 4.6: SK Telecom LTE subscriptions expectation and as a percentage of total subscriptions, 2010-2016
  • Exhibit 4.7: SK Telecom LTE commercial devices
  • Exhibit 4.8: SK Telecom LTE applications
  • Exhibit 4.7: TeliaSonera Sweden LTE commercial devices
  • Exhibit 4.8: Vodafone Germany LTE commercial devices
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