Sunday 14 December 2008

340m 'Active' mobile broadband users by 2014

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 according to a new report titled "Mobile Broadband Computing" by Dean Bubley from Disruptive Analysis.

Some of the interesting highlights from the report as follows:
  • Growth has been driven by cheap HSDPA modems and flatrate data plans.
  • 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).
  • 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.
  • “Free” netbooks, provided on a subsidised basis by mobile operators on typical 2-year contracts are popular, but have a limited addressable market.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
Some of the other interesting points from the extended summary as follows:
  • Some operators' marketing teams have become over-zealous about competing with fixed broadband. In some markets, HSDPA is now cheaper than ADSL/cable. This is unsustainable, as the cost structures differ hugely. There are physical limits to the capacity of mobile data networks, which will rapidly be reached with the explosion of low-cost traffic. Some cellular networks now see more than 90% of 3G traffic from PCs. Network operators are now hostage to future high-bandwidth Internet applications gaining viral adoption among mobile users.
  • Adoption of embedded-3G and embedded-WiMAX notebooks will grow slowly alongside separate “dongle” modems. Predictions of 50%+ attach rates in 2-3 years are over-optimistic; there are numerous practical, commercial and economic reasons for delayed adoption
  • To date, most mobile broadband users have connected with an existing notebook PC, together with a separate datacard or USB dongle. Looking forward, a broader set of choices are emerging, with the advent of embedded-WWAN notebooks, small & inexpensive 7-10” sized netbooks, MIDs and the use of 3G handsets as “tethers”. Implicitly, these all compete to some degree against higher-end smartphones as well.
  • At present, the majority of mobile broadband subscribers are engaged through
    traditional monthly contracts, typically over 12-24 month periods. However, further evolution is necessary. Disruptive Analysis expects a variety of new business models to emerge and take a significant share of the overall user base, including:
    • Session-based access, similar to the familiar WiFi hotspot model.
    • Bundling of mobile broadband with other services, for example as an adjunct to fixed broadband or mobile voice services.
    • “Comes with data included” models, where the upfront device purchase price
      includes connectivity, perhaps for a year.
    • Free, guest or “sponsored” mobile broadband, paid for by venue owners or
      event organisers.
  • Incrementing capacity of Networks by perhaps another 10x in the next 6 years will need investment in more spectrum, more cell sites, newer radio technology, better backhaul and dedicated “hotspot” solutions like femtocells and WiFi. Yet in the current climate, these investments face delay, meaning a “capacity crunch” is possible in some cases.
On an unrelated note, More than 25 per cent of the content that workers view each day will be dominated by pictures, video or audio by 2013, according to research by Gartner. Though this does not specifically say mobile content, I think the same phenomenon will be observed in the mobile world and maybe to a larger extent with applications like Youtube already very popular with the mobile users.

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