Over the past two years, telecommunications carriers have come to endorse, and even sell, portable base stations called femtocells (or, depending up on the vendor, picocells or microcells) used to boost wireless 3G signals to smart phones and other wireless devices in areas where network coverage is poor. New developments in femtocells—essentially desktop cell phone towers used in homes and offices to enhance a signal within a 10- to 200-meter radius around the device—are expected to shrink down the technology from the size of a book to that of a USB thumb drive no more than a few centimeters long and play a significant role in the adoption of 4G networks.

Picochip, a U.K.-based maker of chips used to power portable base stations made by Ubiquisys, ip.access and Alcatel-Lucent, recently introduced the smallest processor in its lineup, capable of fitting in a 12-millimeter-square package. The small size of this picoXcell processor, set to begin shipping to femtocell makers by the end of the year, could lead to cell signal boosters that plug into a laptop USB port and support as many as eight smart phones wherever the laptop goes. Of course, these USB-pluggable devices could also be inserted into desktop computers, cable modems and set-top boxes—any network-connected device with a USB port—to improve a home's cell phone voice and data coverage.

The telecom industry is promoting portable base stations as a way to create a mini infrastructure will hopefully help satisfy the seemingly insatiable demand for viewing large multimedia files (in particular, Web-based video) using handheld devices while also alleviating some traffic from main cell phone networks. The idea is that AT&T, Verizon and other carriers wouldn't have to invest as much in expanding their core infrastructure. Different types of portable base stations are designed to produce signals of different strengths, covering a radius of anywhere from 2 kilometers to less than a few meters.

Another advance in femtocell technology is the ability to boost 4G Long-Term Evolution (LTE) network signals, something Picochip is promising via an LTE femtocell base station the company calls eNodeB, about the size of a hardcover book. Given the nascent state of LTE networks, it may be a few years before smart phone users start looking for LTE femtocells, but the company thinks that carriers might start selling them as LTE networks expand. Verizon, which launched its LTE network in December in 38 U.S. markets, plans to expand to an additional 140 markets by the end of this year. AT&T is planning to begin rolling out its 4G LTE network later this year.

About 1.3 million femtocells shipped in 2010, and that number is projected to grow to 70.2 million in 2015, according to Allied Business Intelligence, Inc., an Oyster Bay, N.Y.-based research firm. Research firm IDATE in September published a report about femtocells with a more conservative estimate that in 2014 about 23 million femtocell devices would be sold worldwide for a total market of nearly $1.25 billion. Each of the major carriers (AT&T, Sprint and Verizon) sells femtocells—Sprint last year said it would give away the devices for free to some subscribers with weak 3G coverage. Femtocells generally cost between $150 and $250.

Image of Picochip's smallest processor (right) in a dongle-sized prototype device courtesy of Picochip