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Wireless Now Built-in to Consumer Electronics

As the market for consumer electronics (CE) devices incorporating Wi-Fi begins to gain real traction, yet another -- based upon 3G cellular technologies or mobile WiMAX -- is just starting to take shape.

According to a new study from ABI Research, portable consumer electronics -- digital cameras, media players, portable game devices, and more -- are beginning to offer direct mobile broadband connections to the Internet. By 2012, annual shipments of such devices are expected to approach 50 million.

"In the near term, connected portable devices will rely more on 3G cellular connections," says principal analyst Philip Solis. "However, the 3G market is fragmented: there is EV-DO, there is HSPA; different carriers are using different frequencies in different regions of the world. Such fragmentation represents a significant challenge. In addition, such devices must compete against smartphones that increasingly include similar functions."

The first few products have already appeared, all from South Korea. Two portable video players -- Digital Cube's iStation Netforce and Cowon's Q5 -- offer 3G connections through add-on HSDPA modules. "A modular approach makes it easier to support multiple carriers," notes Solis, "but the connectivity is not seamlessly integrated."

The first true device of this class, offering embedded HSDPA, is Samsung's VLUU i70 digital camera. Not just a 7.2 megapixel camera, the i70 also shoots video, reads e-books, receives T-DMB television, plays MP3s and video, and allows the user to send or download photos and videos.

Nonetheless, ABI Research expects portable game devices and media players to dominate this market. Qualcomm's Snapdragon platform and Freescale's MXC (Mobile Extreme Convergence platform) will help enable cellular-based devices, and a wide ecosystem of WiMAX semiconductor vendors will enable devices with embedded WiMAX.

"In the longer-term, WiMAX has more potential than cellular-based connections for these devices," says Solis. "It's an IP-based network with simpler architecture and better connection to the Internet. Sprint, with its commitment to WiMAX, will promote such devices heavily, in the process helping U.S. markets keep up with South Korea and Japan."

Perhaps it's not realistic to assume that the European and U.S. markets will ever reach similar adoption rates as the Asia-Pacific market leaders. Regardless, some carriers have committed their team to pursuing that dream via ongoing trials. However, tackling the challenge should not be viewed as an endurance test, since an unattractive offer typically doesn't improve with age.

I trust that lessons-learned from the evolution of Wi-Fi, as it crossed the chasm from early adopter to mainstream user, are still vivid in the minds of both CE and carrier marketers. The leap from the elite gadget geek to the mainstream consumer convert should not be attempted without the safety-net of a well thought-out progressive market development plan.

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