Rise in smartphones makes mobile broadband modems obsolete

The number of Kiwis who own a smartphone continues to rise, and this is making other products such as mobile broadband modems increasingly obsolete.

Strategy Analytics has reported there has been a third consecutive annual decline in the mobile broadband modem market in 2014.

Shipments of mobile broadband modems and hotspot routers fell year-over-year in 2013 to nearly 87 million units says Strategy Analytics.

According to the analysts, the modem market will decline by another 24% by the end of 2014, and overall the market revenue of modems will drop by 50% in 2014 from its 2010 market value.

Various factors have contributed to the decrease in revenue, the report says. These factors include a declining PC market, longer modem lifecycles and a healthy second hand modem market.

A key factor was the increase in smartphone use. Carriers bundling tablets with smartphones as well as offering service extras or price reductions, lower cost SIM only data plans, and shared data plans for multiple devices have contributed to the decline.

According to Research NZ, more New Zealanders are using smartphones and tablets or iPads than they were last year. In 2013, 48% of respondents said they owned a smartphone compared to 59% who said they had one this year. Comparatively, in 2011 approximately 7-10% of Kiwis owned a smartphone, according to NetSafe.

The survey by Research NZ showed there is a growing trend of people preferring their smartphone over other mobile devices.

Marissa Mayer, Yahoo, chief executive, says 2014 will mark a tipping point in our adoption of technology. She says, “By the end of this year we will have more mobile users and more mobile traffic than we have PC traffic.”

Andrew Brown, Strategy Analytics, executive director enterprise research, says, “It was no surprise that USB modem sticks and embedded PC modem modules continue to lead the two year decline, while the continued growth in Wi-Fi-enabled CE devices saw mobile hotspot routers continue to be the bright point in an otherwise gloomy market.”

Huawei continues to lead all modem vendors in 2014 with nearly 45% unit share, Strategy Analytics says.