Today’s story on the rapidly expanding femtocell market brings up some eye-popping forecasts for the global market — from 1 million units shipped this year to 62 million by 2014, according to Dell’Oro Group’s five-year forecast.
North America is slated this year to have the highest numbers in terms of revenue and units shipped, but will lose that the top spot for units shipped by 2014 to the European market. Interestingly, North America will remain as No. 1 in terms of revenue. Why? Loren Shalinsky, who wrote the forecast, told me that it’s because CDMA femtocells, which are used predominantly in the States, cost more than what the rest of the world uses — W-CDMA.
In case you have the same curiosity streak I do (and the answer wasn’t blatantly apparent to you), here’s Loren’s explanation on why CDMA femtocells cost more than W-CDMA:
I recontacted some of the companies in the supply chain, and the pricing differential comes from a combination of standardization and integration (which turn out to be related). The W-CDMA Femtocell standard was developed relatively faster, and so the companies involved in the supply chain were able to begin development of optimized chips (with more integration). The CDMA femtocell components are behind on this optimization and development, which leads to higher pricing on their femtocells.