US mobile service provider Verizon has chosen Israeli mobile technology company Altair Semiconductors to provide 4G chips for its new tablet, culminating a working relationship going back years and enabling Verizon to sell its device markedly more cheaply than competing products.

Altair’s FourGee-3100/6202 chipset is running in Verizon’s LTE-enabled Ellipsis 7 tablet, the first-ever device marketed under Verizon Wireless’s own brand.

Last month, Altair’s FourGee product won the “Best Chipset/Processor Product” award at the 2013 LTE North America conference, considered the premiere 4G event in the U.S. “The judges on the panel are very impressed with the game-changing approach that Altair has been pursuing in the past few years, and the way they translated this strategy into actual products,” said Mike Roberts, Principal Analyst & Head of Americas at Informa Telecoms & Media. “The FourGee-3100/6202 single mode LTE chipset is clearly a leader in its category in terms of features, performance and cost.”

LTE (long-term evolution) networks (also known as 4G networks) are as much as ten times faster as current 3G networks for phone and data networks, and the big service providers around the world (like Sprint and AT&T in the U.S.) are in the midst of rolling out LTE networks for their users. LTE is the network of the future, and LTE chips are the chips of the future. For Altair, established in 2005, 4G is the only game in town; LTE chips are the only kind the company makes.

Tablets are now the best selling non-smartphone connected devices; they outsell desktops and even laptops by wide margins. Most of the major-name tablets from Apple, Nokia, Samsung, and others on the market now are LTE-capable, meaning that with the right chip, these tablets can use a fast 4G cellular network.

Among those offerings is the Ellipsis 7, offered by Verizon, using Altair’s FourGee chipset – and, strikingly, it’s selling for about half what the competition’s devices are selling for. In an interview, Altair co-founder Eran Eshed said that the company is “trying to do is take that premium (of high-cost LTE devices) down to very cost-effective levels for consumers,” to a price point that is almost the same as that of wifi-only devices.

With the FourGee, Altair has upped the competition with other chip makers with sights on the 4G market — especially Qualcomm, the current leader in 4G chip sales. One reason Verizon is able to sell the Ellipsis for such a reasonable price is because it is LTE-only – meaning that it won’t work with the more common 2G and 3G networks.

According to Eshel, Altair can produce a single-mode (4G only) chip for about half of the competing multi-mode (3G/4G) chip, which cost $65-80 each. With tablets falling in price due to increased competition and commoditization, manufacturers can cut prices for their products and compete more effectively.

Altair Semiconductor co-founder Eran Eshed (Photo credit: Courtesy)

Altair Semiconductor co-founder Eran Eshed (Photo credit: Courtesy)

Verizon was an early backer of Altair, and has assisted the company with facilities, certifications, and other important components. The FourGee is so far the only LTE-only chipset to have been certified by Verizon Wireless’ 4G chipset certification program. “For them it’s a great idea to work with an up and coming company like ours, and their 4G work has influenced the rest of the industry to roll out their LTE networks as well,” said Eshed.

As LTE coverage expands in key markets such as the US, Japan and Korea, carriers will be able to realize the significant cost benefits of integrating 4G LTE functionality into devices deployed on their networks, while removing the costly 3G component from their requirements, said Eshed. The impact of this trend will be a fundamental transformation of LTE, from being a premium feature to a mainstream feature and enabling previously cost-prohibitive applications, such as tablets, netbooks, connected consumer devices and M2M with mobile broadband cloud connectivity.

“We are proud to have been selected by Verizon Wireless – the 4G LTE leader – to power its first consumer LTE-only device,” said Eshed. “Since introducing the first single-mode LTE chipset in the world several years ago, we have pioneered this market with the highest performance, yet affordable, LTE semiconductors. This product is a strong endorsement of our strategy to disrupt the market and displace costly 3G+4G multimode with lower cost 4G LTE-only Internet connectivity solutions.”