Officials with startup Altair Semiconductor are betting that, as the prevalence of 4G Long Term Evolution networks grows, the need for mobile devices and IT products that support previous generations will decline and eventually disappear.
Some investors apparently feel the same way. The Israel-based startup announced July 1 that it has raised another $25 million in funding from a number of existing investors, including Bessemer, BRM, Giza, JVP and Pacific Technology.
The money will be used by Altair for further product development and to help the vendor meet needs from large customers for high-volume product deployments, according to company officials.
The company is looking to leverage its focus on 4G Long-Term Evolution (LTE) networks to better compete with the likes of Qualcomm—which is the leading chip maker for mobile devices—Intel and Broadcom in creating chips for high-end devices and IT offerings, such as networking gear.
Officials argue that by not producing chipsets that also have to support 3G networks, Altair can increase the efficiency and drive down the costs of their products, in comparison with rival technologies.
“As LTE networks reach coverage parity with 3G in key markets, carriers realize that removing 3G and adapting LTE-only is the most efficient way to significantly lower costs and increase mobile broadband attach rates,” Altair co-founder and CEO Oded Melamed said in a statement. “Our month-over-month increase in chip shipments is a testament to the widespread move towards LTE-only across the industry and we intend to use the funds to support our customers as they ramp high volume production and deploy their products in the field.”
Major wireless networking companies like Verizon, AT&T, Sprint and T-Mobile are aggressively expanding their 4G LTE networks. In January, Verizon officials said that almost half of their data traffic runs across 4G networks, that their 4G coverage will match their 3G coverage this year, and that 23 percent of their subscribers were using an LTE smartphone at the end of the fourth quarter in 2012.
“In other words, the LTE era is here,” Eran Eshed, Altair co-founder and vice president of marketing, wrote in a Jan. 23 post on the company blog.
Altair officials say it’s only a matter of time before they become more ubiquitous than 3G. At that point, the need for 3G support in mobile devices will quickly evaporate, according to the company.
For Altair officials, much of the debate comes down to cost. The cost of integrating a single-mode 4G LTE chipset is much lower than doing so with LTE+3G. Going with the 4G LTE-only strategy will help drive down the overall costs associated with mobile broadband connectivity, and bring those costs closer to those of basic WiFi. That lower cost to integrate LTE-only connectivity also will make it less expensive to build and deploy devices that can connect to the Internet, helping to drive the industry toward the Internet of Things.
Altair launched its first LTE-only chipset in 2009, and now its technology is in more than 100 product models—from tablets and Ultrabooks to portable hotspots and network routers—from more than 30 vendors.