Ericsson targeting netbooks with new wireless module

Ericsson (NASDAQ: ERIC) believes netbooks will be the next big wireless device and thus deserve their own dedicated hardware. The Swedish network equipment vendor said today it has developed a scaled-down version of its mobile broadband embedded radio module specifically for the mini-laptops' lower price point and ultra-mobility needs.

Ericsson estimates more than 300 million netbooks will be sold between 2009 and 2014, and the vast majority of them will need some kind of wireless broadband connectivity, said Mats Norin, Ericsson's vice president of mobile broadband modules. Unlike their larger laptop cousins, the primary function of most netbooks is Internet connectivity. Many of them support stripped-down operating systems centered upon a Web browser. Netbooks will also sell for far lower prices than full-fledged PCs. Price points today are already well under $500 and should continue to fall.

Furthermore, netbooks' focus on mobile connectivity will lead to a lot more sales from wireless operators, many of which will subsidize the devices in exchange for long-term data plan contracts. The trend has already begun. AT&T is selling netbooks for as low as $50 with a subscription to both its home and mobile broadband services. Verizon is selling an HP netbook for $200 with a 3G data contract. With those kinds of price points in mind, Ericsson is trying to make the wireless components of the netbook as cheap to implement as possible, Norin said.

"The netbook itself is more concentrated on consumer cost efficiency," Norin said. "We've designed our module to focus on connectivity. We've stripped off some functionality. And we're pre-certifying the module with major operators. It's already been approved in 75 countries."

What that means is Ericsson has excised GPS and other components from its standard laptop modules to drive down the price per unit—though Norin said he could not reveal the exact cost savings—cutting both costs and power consumption. The vast majority of the remaining resources on the module have been devoted to high-speed packet access (HSPA) connectivity functions (Ericsson does not make CDMA modules). Ericsson is also getting the new modules pre-certified by operators, so when a netbook vendor builds a new netbook with an Ericsson module, it won't need to go through an arduous testing and approval process with each prospective operator. Norin said Ericsson is also working with Intel (NASDAQ: INTC) to ensure the module integrates with its netbook architecture, Pine Trail-M, which uses Intel's new Atom mobile processor.

The result is the F3307, which will begin shipping in August. Ericsson hasn't announced any specific customers for the module. On the laptop side, Ericsson modules are embedded in PCs from Dell, Lenovo, Toshiba and LG Electronics.

Many of the netbook module solutions are laptop platforms repurposed for the smaller devices. Norin said Ericsson feels by developing a platform for the specific needs of netbooks it can get ahead of the market. As other devices MIDs and ultra mobile PCS emerge, Ericsson also plans to target them with optimized modules, Norin said, but he stopped short of saying that the vendor would produce a specific module for each device category. The netbook is a unique case because of the sheer volume of devices expected to ship, Norin said. But he added Ericsson is starting to get queries from its customers about different mobile computing form factors.

"Without naming any specific customers, we are seeing very strong interest in modules for all types of applications," Norin said.