Cost of LTE smartphones dropping surprisingly fast, analyst says

LTE-capable smartphones that cost around $US200 without subsidies are on the way

Products from several smartphone vendors and processors from the likes of Nvidia are helping drive down the cost of LTE-enabled devices.

LTE smartphone shipments will grow from about 90 million units last year to 275 million in 2013, allowing the technology to take off on a grander scale and driving down device prices, according to market research company Strategy Analytics.

There is a clear trend emerging for lower-cost, LTE-capable devices at Mobile World Congress, CCS Insight wrote in a research note. Vendors like Huawei Technologies, LG Electronics, Samsung Electronics and operator Orange are all showing products.

The pace of price erosion on LTE is surprising, and a broader portfolio of LTE devices is expected to be available for operators' line-ups during the last three months of the year, according to CCS Insight.

"It is all about the continued democratization on the mobile Internet," said Patrick Remy, vice president of devices at Orange, regarding its upcoming Lumo, which will start shipping during the first half of the year.

The phones all have similar specifications. The Lumo has a 4.5-inch and is powered by a 1.2GHz dual-core processor. LG Electronics is offering the Optimus F5, which has a 4.3-inch screen and a 1.2GHz dual-core processor, as well as the bigger Optimus F7, which has a 4.7-inch HD screen and a 1.5GHz dual-core processor.

The chip vendors are also helping to drive this trend.

For example, Nvdia is putting out the quad-core Tegra 4i processor, which is the company's first chip with an integrated LTE modem and will be targeted at smartphones with a price tag under US$200. Tegra 4i will "bring super phone capabilities to the mainstream smartphone market," according to Nvidia, which didn't detail when the first devices based on the processor will arrive.

But by the end of year there will be numerous midrange models available for under $200 wholesale, according to Neil Mawston, executive director at Strategy Analytics. However, LTE won't start to spread to the low-priced devices until 2014 or 2015, he said.

Send news tips and comments to mikael_ricknas@idg.com

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