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Wireless Cellular Modem Market Developing

Since the end of 2006, several wireless modem vendors have launched, or announced development of, USB cellular modems. A study from ABI Research reveals a growing and increasingly competitive market and forecasts shipments of these modems in excess of 22 million by 2012.

According to principal analyst Dan Shey, "Proliferation of 3G networks is the primary driver of growth of cellular modems regardless of form factor. However, new companies are jumping into the USB modem market because the installed base of devices for USB modems includes not only laptops but also desktops. Desktop PCs are ubiquitous around the world and will continue shipping in large volumes, exceeding 140 million units per year through 2011."

In a market characterized by increasing competition, cellular modem shipments, including PC Cards and ExpressCards, USB modems, internal modems and 3G or Wi-Fi routers, will grow to over 68 million units by 2012, representing a compound annual growth rate of 53 percent.

According to ABI's assessment, the market dynamics affecting USB modem growth will be very different from those that affect the other modem form factors. This will create opportunities and challenges for all value chain players.

Says Shey, "There are two factors to watch which will affect the USB modem market. First, the new companies entering this market are in the Asia-Pacific region, a territory with notoriously price-competitive companies. Second, since the USB modem attaches externally to the computer, the device has no space or shape limitations. This fact will allow modem vendors to differentiate their products based on body design and functional features, providing for interesting marketing opportunities."

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