3G modem market set to boom

Although cellular modem shipments in 2006 were slightly below expectations, ABI Research says momentum is building for this market to reach nearly $10bn 2012. That’s a compound annual growth rate of 47%.

ABI analyst Dan Shey commented: “The fundamental drivers for sales of modems are the proliferation of 3G networks and better cellular broadband pricing. Operators made significant efforts in 2006 to upgrade their networks to 3G technologies …. Operators are also tempting customers with various cellular broadband pricing options, although the total monthly costs are still too high to encourage significant modem adoption by consumers."

PC data cards represented the majority of sales in 2006. Internal modems did not meet sales expectations, but they will begin to lead sales starting in 2009. “The value chain for internal modems is complex with several issues still needing attention particularly related to distribution," notes Shey. “However, operators, laptop vendors and chipset manufacturers are committed to this form factor and they continue to work together to develop the embedded modem market."

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