Femtocell shipments flatline due to slow inventory burn rate

Shipments of femtocells are flatlining, with operators sitting on stacks of inventory that are slow to budge, according to a study from ABI Research.

ABI estimated largely flat volume shipments for residential and enterprise femtocells, also referred to as indoor small cells. 2012 shipments are expected to reach 2.44 million units, a slight decline from shipments of 2.47 million in 2011. In total, ABI estimates 5.3 million units will be deployed by end 2012.

"We believe there is a large inventory of femtocells sitting with operators right now with operators having a slow burn rate, which has led to limited fresh orders in the first half of 2012," said Aditya Kaul, practice director at ABI Research. "Silicon component suppliers have suggested that 1Q 2012 shipments were down 30 percent to 40 percent compared to 1Q 2011."

The decline in shipment volumes can be attributed somewhat to a shift in focus from indoor femtocells to outdoor metrocells. "Also, the recent consolidation in the market including Mindspeed's acquisition of picoChip and Huawei's exit from the femtocell market suggest that the indoor small cell market has been under some strain," said ABI.

ABI expects growth in the femtocell market will pick up from 2013 onwards, once large operators begin refreshing their inventories. The market will grow at a CAGR of 63 percent to reach almost 28 million units in 2017 for revenue of $3.4 billion, said ABI. Consumer femtocells are the largest class of femtocells representing a 68 percent share of units in 2012 and 70 percent in 2017.

For more:
- see this ABI release

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