Mobile Broadband Computing - New Report December 28, 2008
Posted by chetan in : US Wireless Market , trackbackI rarely recommend reports as very few are original, thorough, and hype-free to justify a recommendation. However, am happy to suggest “Mobile Broadband Computing - Device Market Forecasts & Business Model Scenarios” by Dean Bubley. If you are looking to rely on some accurate forecasts (ok, as accurate they can be) or trying to understand the market, this report should help you get a better grip on the market and the numbers. I have followed Dean’s thinking and he presents a very clear-cut view of how things are with a critical lens.
Highlights
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Mobile broadband computing (MBC) has grown very strongly in 2008, to 35m global subscribers. This is forecast to increase almost 10x by 2014, to 341m.
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Growth has been driven by cheap HSDPA modems and flatrate data plans.
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The majority of MBC users exploit conventional-seized laptops with separate 3G USB modems (“dongles”). This model will continue to lead despite the growth of netbooks, built-in 3G, WiMAX and MIDs (mobile Internet devices).
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At present, Europe accounts for 50% of global mobile broadband users, reflecting earlier introduction of consumer-friendly USB dongles and ferociously-competitive low-priced HSDPA tariffs.
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In the short term, embedded-WWAN notebooks will grow in sales only slowly, reflecting the slowing economy, market inertia and price of 3G dongles, and limitations of business models like traditional monthly long-term contracts.
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Comparisons with fast adoption of WiFi in notebooks ignore factors like free usage models, and module cost as a % of OEMs’ gross profit margin per PC.
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“Free” netbooks, provided on a subsidised basis by mobile operators on typical 2-year contracts are popular, but have a limited addressable market.
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By the end of 2011, about 30% of mobile broadband users will be exploiting notebooks with built-in 3G or WiMAX modules. 58%, roughly twice that proportion, will use external modems like USB dongles.
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By 2014, there will be 150m users of notebooks and netbooks with embedded mobile broadband worldwide. In terms of shipments, 100m wireless-enabled laptops will be sold annually by then – but not all will be activated.
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The new market category of MIDs will grow only slowly. Only 3m will be sold in 2009, although by 2014 this should grow to ten times that figure.
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Ericsson, Intel and Qualcomm are driving down costs of WWAN modules for strategic reasons, relating to dominance of HSPA, growth of WiMAX and perpetuation of CDMA respectively.
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By 2012, there will be 45m users of WiMAX-enabled MBC devices. 11m of these will also use 3G or LTE connections in various hybrid approaches.
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An increasing number of subscribers will use their 3G handsets as “tethers” for their PCs, instead of modems or built-in modules. However, fewer than 10% of people will use tethers as their sole access method.
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Use of LTE in mobile broadband computing devices will be very limited until 2012. After that, ramp-up will be rapid, reaching 75m units shipped in 2014.
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By 2011, only 40% of mobile broadband users will be on long-term monthly contracts. Most will use prepaid, session-based, bundled or “free” models.
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The cellular industry needs to work out methods to avoid the “tyranny of the SIM card” in enabling easy, session-based, mobile broadband offerings.
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Consumer preference for small netbooks as a mobile computing device form-factor is a positive for both Intel and Microsoft. ARM-based chips from TI, Qualcomm and others, running Linux, will mostly appear in niche MIDs, mobile variants of consumer electronics devices, and high-end smartphones.
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