Mobile-broadband push may be slow to bear fruit

Summary:An Ovum analyst says the efforts of an alliance of tech giants, aimed at promoting embedded mobile broadband in devices, may take time to pay off

It will take time before an industry campaign for embedded mobile-broadband connectivity in devices will provide any real results, according to research firm Ovum.

Sixteen companies, led by the GSM Association (GSMA), this week unveiled an initiative to champion mobile broadband — primarily HSPA (high-speed packet access) technology — support in devices such as laptops.

Dubbing it an "unprecedented initiative", the GSMA said the move includes a $1bn (£565m) global marketing spend and endorsement of a new service mark, to be placed on such devices, aimed to help consumers identify these systems as mobile broadband-ready.

In a statement released soon after the GSMA announcement, Ovum's senior analyst Steven Hartley questioned if the initiative was necessary and whether its impact will be significant.

"The GSMA has launched what is essentially an awareness campaign to help drive take-up and use of mobile broadband on laptops and other non-handset-type devices. Yet, mobile-broadband uptake is already growing rapidly without it," Hartley said. "It could be argued that any promotion is better than nothing, but it looks a lot like the initiative is designed as a defensive move against WiMax branding."

WiMax, which operates on Wi-Fi hotspots, and cellular-based technologies HSPA and LTE (the long-term evolution of 3G) are seen as competing platforms.

To ensure the 'Mobile Broadband' service mark gains industry-wide support, Hartley said the GSMA must quickly secure the support of other laptop makers, such as HP, Apple, Sony and Fujitsu.

He added that complexity and costs are the biggest barriers for OEMs (original equipment manufacturers) to provide embedded laptop connectivity. The Ovum analyst said the only way to help keep costs low is to increase volume.

Citing figures from the GSMA, he noted that it currently costs about $70 to offer built-in HSPA capability. This number is expected to fall to $40 by next year.

Hartley said the $1bn marketing fund set aside to drive the campaign could have been better spent as subsidies to drive volumes, and further lower embedding costs.

However, he said the initiative does highlight the growing availability of laptops with mobile-broadband connectivity embedded. Such devices today are predominantly connected by USB modems, or dongles, he added.

"Nonetheless, migration to embedded laptops will not occur overnight," he noted. "The replacement cycle of a laptop is longer than that of a mobile phone, slowing uptake. Embedded laptops are also more expensive and less flexible than a USB modem. A modem can be pooled for enterprise use, but a laptop is [limited to] per person," said Hartley.

"An operator involved in the initiative told us last week that it believed two thirds of mobile-broadband access will still be via modem in two years' time. That means over 30 percent for embedded laptops — a major increase compared to today — but they will remain in the minority," Hartley said.

Topics: Networking

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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