By: David Shamah
Altair Semiconductor, a small Israeli start-up, is ahead of Qualcomm in the race for the next big thing in cellular data communications
An Israeli start-up is giving telecom giant Qualcomm a run for its money, after winning a deal to install its communications chipset in new Chromebooks produced by Google and HP. The deal pushes Altair Semiconductor, which makes nothing but 4G (LTE) chipsets for devices, into a whole new league, said Eran Eshed, CEO of the Hod Hasharon-based company. “This is a really big deal for us, and for 4G in general.”
The 4G, also known as the LTE (Long Term Evolution) communications standard, is the next big thing in cellphone data communications. Currently, most people still use devices that support the 3G (the G in each term refers to generation) standard. But with speeds up to ten times faster than those available with 3G, more device manufacturers are coming out with products that support 4G.
In many ways, though, 4G is still a market of the future, which is one reason why the big cellphone chip makers – with Qualcomm the biggest, by a wide margin – have let a start-up like Altair slip into the market. Until now, said Eshed. “It’s still a much smaller market than 3G, and it hasn’t been big enough for Qualcomm to try and compete with us until now,” said Eshed. “After this deal, I think that will change.”
Chromebooks are the cloud-connected notebooks based on Google’s Chrome operating system, running Google apps (Google Docs, Google Spreadsheet, etc.), with most data stored on Google servers. In a scheme like this, fast communication is essential –- since you need to be on-line to do almost anything productive — and most Chromebook models until now have utilized wifi as their main communication protocol, meaning you could only do productive work if you were at home, the office, or a coffee shop.
Even with that limitation, through, Chromebooks have been hot sellers, said Eshed. “Google doesn’t announce official figures, but from what I gather about 10% of notebooks shipped last year were Chromebooks, and 20% of all notebooks sold to education institutions were Chromebooks.” One of the big reasons for those numbers has been price; Chromebooks average between $250 and $500, making them the most reasonably priced notebooks on the market for the power and capabilities provided.
Altair Semiconductor co-founder Eran Eshed (Photo credit: Courtesy)
How much bigger will the market be, then, when the new Chromebooks by Google and HP, utilizing the Altair FourGee-3100/6202 chipset, become widely available, said Eshed. “With 4G you will be able to connect from anywhere at super-fast speeds, and that speed, combined with the price factor, means that these Chromebooks will be big sellers.”
All that’s missing is the network -– hooking up with a service provider that can “do” 4G. Altair, Google, and HP have a solution for that too — in the form of a deal with Verizon, the U.S. carrier, to provide 4G connections for purchasers of the new Chromebooks. “Verizon’s 4G network extends throughout the country, available throughout its coverage area,” said Eshed. “So all the factors are in place for a bug surge of Chromebook sales.”
The price is certainly attractive. The new device, based on the Chromebook 11 (launched in October) will cost $279 for the Wifi-only version, but only $100 more for a version that includes both wifi and 4G. However, said Eshed, buyers who commit to a contract for 4G get an additional $50 off. The monthly connection fee, said Eshed, is discounted as well.
The reason the Chromebooks are so cheap, said Eshed, is due to numerous factors – including the lower margin on the Altair single-mode (4G only) chipset, as compared to the multimode (3G/4G) chipsets Qualcomm makes. “We can produce our single mode chipset for about half of what they can, and those savings are passed onto the consumer,” said Eshed. Considering the tight budgets for most buyers today, those savings make the Chromebooks even more attractive.
Several months ago, Altair had its first big deal, also with Verizon, supplying 4G chips for Verizon’s Ellipsis 7 tablet, the first-ever device marketed under Verizon Wireless’ own brand name. That was right after the company won the “Best Chipset/Processor Product” award at the 2013 LTE North America conference, considered the premiere 4G event in the U.S. Like the Chromebooks, the Verizon tablet uses the FourGee chipset, which is so far the only LTE-only chipset to have been certified by Verizon. “So far those tablets have been selling very well,” said Eshed, with the tablet, running the latest version of Android, priced at less than $250.
With Google making a solid commitment to 4G, the market has suddenly leaped from “custom” to “mainstream,” said Eshed. “Fortunately we were here first, and were able to build up a reputation with manufacturers and service providers. I have no doubt that Qualcomm and some of the others will be looking at this and figuring out how they can get some of the action as well.
“But I think we will be able to thrive despite the competition,” Eshed said. “By focusing on 100 per cent LTE and eliminating costly 3G components, we were able to help our partners lower the cost of this critical LTE connectivity feature. We see this product launch as another important milestone towards achieving our mission of bringing LTE-enabled devices to everyone.”