ABI: Market Forces to Drive Embedded Cellular Modem Sales Over 83M Units in 2013
October 28, 2008 // Published as a news service by IHS
Although embedded cellular modems have been slow to take off, momentum is building for increased sales, according to a recent study from ABI Research.
One recent development is the Global System for Mobile Communication Association's (GSMA's) Mobile Broadband Service Mark initiative which, backed by media spending of $1 billion, will create awareness of laptops with embedded connectivity.
Analysts said other drivers include Qualcomm's Gobi chipset that enables modem connectivity on both GSM and code division multiple access (CDMA) networks, lower mobile broadband pricing and networks maintaining their current CDMA Evolution-Data Optimized (EV-DO) Rev A and high-speed packet access (HSPA) air interfaces for at least two more years.
Forecasts predict that these and other market forces will increase embedded cellular modem sales to nearly $9 billion in 2013.
However, ABI Research principal analyst Dan Shey said there are some near-term barriers to market development. "Although embedded connectivity is convenient, operators can apply the important levers of PC Card and USB [universal serial bus] modem pricing and promotion, as well as device-specific mobile broadband pricing. These factors can change the total value proposition of an embedded modem device and limit their uptake in the near term."
Another near-term barrier is the current negative economic environment, analysts said. "The holiday season will be difficult this year for purchases of bigger ticket items such as laptops. It would not be surprising for laptop OEMs [original equipment manufacturers] to work more closely with operators to help drive the sales of these devices both with and without embedded connectivity.
"In other words, product bundles that include laptops, mobile broadband price offers and/or USB modems may be made available to entice buyers during these difficult economic times."
Source: ABI Research.