Feature Article

February 12, 2014

Broadcom Announces Cheaper 4G Smartphone Chipsets

Broadcom has announced that it will build more LTE chipsets aimed at low-cost smartphones. The chipsets will target Android 4.4 “KitKat” in particular.

The move comes on the heels of a report by IDC forecasting that shipments of smartphones will reach 1.7 billion units by 2017.

"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," Ramon Llamas, research manager with IDC's mobile phone team, said in a statement at the time of the report. "Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass-market users. Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience."

Broadcom will debut its new 4G chipsets at the Mobile World Congress in Barcelona, Spain from Feb. 24-27. They will be aimed at phones costing less than $300.

The new chipsets come as smartphones continue to invade the low end of the market, with some being available for less than $100. Low-end carriers like America Movil’s Tracfone brand have started to offer Android phones with their prepaid plans, signalling the move away from feature phones.

The penetration of smartphones will grow particularly in the developing world, where they serve as the primary computing devices to people who have never owned a PC. The faster, cheaper chips will also drive more sophisticated applications and send the feature phone the way of those old brick-style phones.

The development of these chips follows a familiar pattern in the semiconductor industry. Chips get faster, cheaper and better. Intel Founder noted the tendency for the capacity of transistors on integrated circuits to double every two years in the 1960s, an observation that came to be known as “Moore’s Law.”

Edited by Alisen Downey

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