LTE phone shipments to increase tenfold in 2012, analysts say

Most of the growth will come from North America and Asia, according to Strategy Analytics

LTE phone shipments will grow tenfold to reach 67 million units in 2012, making it a breakout year for the 4G technology, Strategy Analytics said on Friday.

Operators such as Verizon Wireless, NTT Docomo and SK Telecom in the U.S., Japan and South Korea will drive the growth, according to Strategy Analytics' Neil Shah.

However, even though 67 million is a lot more than the 6.8 million units sold last year, LTE-equipped phones will still represent a relatively small percentage of the total market. About 650 million smartphones will be sold during 2012, Strategy Analytics expects, which means that about 10 percent will have LTE.

The vendors that will dominate are Samsung Electronics, HTC, LG Electronics, Nokia, Motorola Mobility, Pantech, Fujitsu and Apple, which the market research company assumes will include LTE in the next iteration of the iPhone. However, it has not revealed its forecast for which vendor will come out on top.

LTE is still a nascent market, and there will undoubtedly be growing pains, including issues such as short battery life, excessive device weight and sudden bill shock caused by high data consumption, according to Strategy Analytics.

Also, many LTE phones and data plans will be relatively expensive, which means operators have to invest in generous subsidies to make 4G more affordable for subscribers, the market research company said.

While LTE is growing quickly in the U.S., Japan and South Korea, commercial networks are being introduced at a slower rate in Europe, according to Neil Mawston, analyst at Strategy Analytics.

"But the European mobile industry is finally getting its act together and realizing how important LTE is," said Mawston.

For example, earlier this month U.K. operator Everything Everywhere -- a joint venture owned by Deutsche Telekom and France Télécom -- received provisional approval from regulator Ofcom to reuse its 1800MHz spectrum for LTE services, which it plans to launch during the fourth quarter. However, competing operators are not very happy about it, and have complained to Ofcom on antitrust grounds.

The U.K. still hasn't auctioned off new 4G spectrum, but reusing existing spectrum bands could make LTE services available earlier than previously expected.

As operators in more European countries launch commercial networks, Europe will become a more interesting market for the phone makers, and more devices will become available, Bengt Olsson, head of communications at TeliaSonera, recently said.

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Mikael Ricknäs

IDG News Service
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