Limited market for laptop mobile broadband

Whether delivered by HSPA, Wimax or another technology, there are numerous markets and applications for wide-area mobile broadband. Although not confined to laptop mobile broadband, this is one application that has large potential and has attracted significant industry focus.

Indeed, many have claimed that, not only is the market potentially larger than fixed broadband, as it would be purchased by individuals rather than households, but at the right price it is a mass-market proposition.

Clearly, there are macro trends driving adoption of laptop mobile broadband. First, laptops are increasingly more popular than desktop PCs. Adoption of mobile PCs over desktops is occurring across both developed and emerging markets. Statistics quoted by Intel forecast laptops to be surpassing 50% of total consumer PC in 2008.

Second, the internet is increasingly central to people's lives and a computer without an Internet connection has limited value. This is driving the need for anywhere broadband connectivity.

If there were no difference in performance or cost between a mobile and fixed broadband connection, the advantages of mobility would make it an easy purchase. As such, you would expect adoption of laptop mobile broadband to ramp as laptop penetration grows. However, unfortunately performance is not always equivalent and neither are prices always comparable. Price cuts will increase the addressable market, but there are other issues and we are not so sure the potential for mobile broadband for laptops is as big as claimed.

How many people both have a laptop and really want to use (and pay for) it everywhere they go‾ Does everyone need the ability to edit a spreadsheet, watch HD video on the move or upload mobile videos to YouTube 24 hours a day‾ Will people suddenly discover a need for anywhere-access freedom as occurred with voice‾ We do not believe so. This is not to say that high-speed mobile data is not required, will not grow rapidly as a revenue stream for operators or be increasingly used on numerous devices.

The starting position for the mobile broadband market is very different to mobile voice for which take-up exploded. Prior to carrying mobile phones, many people were completely unconnected. Conversely, the average mobile phone is not only voice enabled but also supports, at a minimum, a small level of data connectivity. This may not be broadband in the full sense, but increasingly it provides sufficient speed and capacity for a small screen (data use is proportional to screen size) and many mobile data applications.

Not mobile

Given that a mobile phone will always be carried, mobile broadband via a laptop will only be required for services specific to that device, which require a large screen or which cannot be accessed via the always accessible mobile handset. Laptops (even the Mac Book Air) are big, difficult to carry around and our research shows used much more at fixed locations where Wi-Fi will have increasing impact.

In addition, the average mobile phone is developing at a rapid rate and there is a trend toward adopting products at the higher end. Increasingly rich features on these handsets are resulting in declining mobile laptop use. Total use is only increasing due to laptop penetration growth. This is despite the strong uptake of mobile broadband data-cards and USB dongles.

But mobile broadband is not only about existing mobile handsets, there are numerous new device categories - suped-up smartphones, cross-over devices somewhere between a smartphone and a laptop, ultra-mobile PCs, netbooks, mobile internet devices, internet tablets and connected consumer electronics devices.

We believe that many laptop users will be unprepared to pay for mobile broadband (in addition or as a substitute to fixed broadband) and new device categories will enable mobile broadband use via much more than the traditional laptop form factor. There will be plenty of mobile broadband, but it is a mistake to identify this only with the laptop.

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