Mobile consumer devices impact content delivery

Mobile electronics shipment to reach 58 million by 2014, as device vendors look to change business models for content delivery, report notes.
Written by Liau Yun Qing, Contributor

The increasing growth of mobile broadband devices will "dramatically" impact the way device vendors operate, amid uncertainty over how content should be delivered to consumers, notes an industry analyst.

According to a report released Monday by ABI Research, the global shipment of mobile broadband-enabled consumer electronic products is expected to increase 55-fold between 2008 and 2014, reaching 58 million at the end of the seven-year period.

The projected figures include e-book readers, mobile digital cameras and camcorders, personal media players, personal navigation devices (PNDs) and mobile game devices, as part of the mobile broadband-enabled consumer electronics market.

"While demand for products in the other categories is just starting to ramp up, consumers are already snapping up connected PNDs and e-book readers in numbers, and will continue to do so," Jeff Orr, senior analyst at ABI Research, said in the report. He added that vertical industries such as in-vehicle fleets and taxis with connected PNDs, a popular feature in Western Europe, are also driving demand in the market.

However, Orr noted that these devices, which operate on mobile broadband networks, will significantly change the way device manufacturers operate.

"When you embed a cellular or mobile broadband modem in a device, it becomes tied to a particular operator's service billing. That changes the device vendors' business model dramatically," he said.

In the case of e-book readers, for instance, integrating the cost of broadband connection into the price of the content appears acceptable to consumers, who are willing to pay each time they download a piece of content. This model, however, may not work for multiplayer games.

Orr said: "Paying to download the game is straightforward but beyond that, what's the appropriate model? Monthly subscription? Annual pass? To whom does the consumer pay? That very unfamiliar service aspect is scary for the device vendors."

ABI Research also pointed to the cost of data plan as the "make-or-break factor" for delivering content and interactivity to mobile devices.

Apart from e-book readers, Orr noted that business models used today for mobile data connectivity were "poorly matched" to the kinds of mobile consumer electronics devices currently available in the market.

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