Wednesday, January 16, 2013

Study Predicts 785 Million LTE Subscribers by 2017

After several years of mobile industry technical standards negotiation and planning -- plus, the many promises that progress was immanent -- fourth generation (4G) wireless services are finally becoming a reality across the globe.

Findings from the latest ABI Research market study now predicts 785 million LTE subscribers by 2017, that's up from 58 million at the end of 2012 -- thereby generating $14 billion in annual mobile service revenues.

Mobile device manufacturers have acknowledged the arrival of the new technology.  A case in point: Apple iPhone 5 and Samsung Galaxy smartphones have provided LTE-enabled handset shipments a substantial lift in 2012 -- even if it has not necessarily assisted the 4G mobile network operators with each and every LTE handset that's sold.

According to ABI Research, when 3G handsets came into the market in 2003 and 2004, there was pretty much a 1:1 correlation between a 3G handset sold and a subscription upgraded from 2G to 3G mobile service.

"That is not happening with every LTE handset sale," said Jake Saunders, VP of forecasting at ABI Research.

But mobile service providers should not be panicking, because this activity is seeding the market with 4G handsets -- which is a good thing. People are simply coveting their favorite brand and/or carrying out a much needed update to their current mobile phone.

All this purchasing momentum is expected to have boosted LTE-enabled handsets to 91 million units by year-end 2012 and the balance coming from other mobile devices.

Moreover, almost 95 percent of new handsets shipped can be attributed to the North American and Asia-Pacific market.

LTE-enabled USB dongles were acquired by some consumers, and also put on IT department purchase orders for businesses, but with a volume of only 6 million units those devices were overshadowed by LTE smartphone sales.

Furthermore, media tablet sales are also proving to be robust. However, ABI Research estimates that only 3.35 million tablets shipped were enabled with LTE technology.

Clearly, the majority of media tablet purchasers thus far are proving to be somewhat price sensitive -- most prefer to buy Wi-Fi-only devices.

That being said, the addition of new smartphone users and the conversion of 3G subscribers with LTE-capable handsets should gather momentum in 2013 and 2014.

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