Embedding 4G

If 4G is to succeed, it will require a new embedded devices, starting with laptops, moving toward ultramobile PCs, mobile Internet devices and eventually consumer electronics. But to embed 4G chips into digital cameras and music players will require cheap silicon — and lots of it.

“You can't have a $20 chip in an $80 device,” said Raj Singh, CEO of Wavesat, a 4G chip manufacturer. So how cheap must silicon be for the consumer electronics industry to take notice? Singh posed that exact question to a digital camera manufacturer this year. The answer: $2. That's less than the cost of embedding Wi-Fi and slightly more than Bluetooth, Singh said.

“Even if we were selling millions of embedded chips today, we couldn't get close to $3 for a chipset until 2010,” Singh said. And to do so the industry will have to create a “4G-lite” version of current chipsets. Even then the industry will have to produce millions of chipsets to create necessary scale to drive down prices. That creates a paradox: Low-cost chipsets require volumes, but consumer electronics manufacturers won't order volumes until they have low prices.

Fear not, Singh said. There will be developments to move the market along. Not only will chipset-makers “future-price” in anticipation of greater volumes, there will be consumer electronics makers willing to pay for 4G connectivity if adding broadband truly gives them an additional revenue source or dramatically increases product value, Singh said. While an MP3 player could do without connectivity, a hand-held Internet tablet cannot, he said. “I see MID devices in Japan that will retail for $250 to $300; those devices will need broadband connectivity,” Singh said.