Technology | Media | Telecommunications

Wednesday, June 04, 2008

Sluggish Cellular Modems Experience Growth

Boosted by very slow advancing 3G network deployment momentum, cellular modems are providing wireless connectivity to laptops, UMPCs and even desktop computers.

Moreover, 2007 data contained in a new market study from ABI Research reveals that cellular modem sales, including PC Cards, Express Cards, USB modems, embedded modems and 3G/Wi-Fi routers cumulatively, increased more than 300 percent compared to 2006.

The market research firm forecasts that by 2013, shipments of cellular modems will exceed 200 million units. Frankly, that seems very optimistic to me. So, we'll have to wait and see what happens.

According to principal analyst Dan Shey, "2007 saw cellular modems established as an important connectivity technology for operators as well as for the mobile customer."

However the growth of 2007 did not benefit just traditional market share leaders. Asia-Pacific vendors now control the majority of worldwide sales and they are bringing a completely new set of capabilities to the marketplace.

Says Shey, "The leading Asia-Pacific cellular modem vendors have robust portfolios of other telecommunications products and services. This positions them to compete for operator sales at a very different level, and is forcing changes to incumbent modem supplier business models."

The factors driving this market go beyond a very competitive modem supplier market and 3G networks. Enterprise customers have been the traditional buyers of these expensive devices and associated services, but operators have expanded their portfolio of mobile broadband price plans, opening up the market to SMB and some consumer demand.

In addition, Qualcomm's Gobi, the eventual consolidation to GSM 3G and 4G networks, and WiMAX will all have positive effects on the supply chain, creating cellular enabled devices which will drive up sales of embedded modems. At least, that's the expectation at this pint in time.