In the not-so-distant past, mobile operators would roll out next-generation networks only to find them drastically underutilized due to a dearth of compatible end-user equipment. This time around, as LTE is being deployed, LTE-capable handsets and other devices can readily be found, but that still does not mean customers are upgrading their services to LTE.
According to ABI Research, when 3G handsets came into the market in 2003 and 2004, there was close to a 1:1 correlation between a 3G handset sold and a subscription upgraded from 2G to 3G. "That is not happening with every LTE handset sale," said Jake Saunders, ABI vice president of forecasting. Nonetheless, he said there is valuable LTE handset seeding going on within the marketplace, even if customers are still using their LTE devices for 3G services.
"New sign-ups and conversion of 3G subscribers with LTE-capable handsets should gather pace in 2013 and 2014. By 2017 we are anticipating 785 LTE million subscribers, up from 58 million at the end of 2012--generating $14 billion in annual service revenues," said Phil Solis, ABI research director.
ABI cited Apple's (NASDAQ:AAPL) iPhone 5 and Samsung's Galaxy smartphones as providing a significant boost in LTE handset shipments during 2012. By year-end 2012, ABI estimates 91 million LTE-capable handsets shipped, with 95 percent of that total attributed to the North American and Asia-Pacific markets that pioneered LTE rollouts.
Shipments of LTE USB-dongles in 2012 reached 6 million units, and 3.35 million media tablets shipped with LTE, said ABI. The firm added that the majority of media tablet purchasers are proving price sensitive and happy to settle for Wi-Fi-only.
- see this ABI release
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