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The rise of the mobile internet dongle

Consumer mobile internet USB dongle sales outpace business sales

A substantial majority of cellular modems purchased as add-ons to portable and mobile computing devices have traditionally been bought by businesses to equip their mobile workforces. But according to a new study from ABI Research, in 2010 51 percent of these modems - mostly the USB form factor - will ship into the consumer segment. By 2014 that percentage is expected to rise to 63 percent.

"The decline in mobile broadband modem sales to business and the rapid growth of the consumer segment have several causes," says senior analyst Jeff Orr.

"The overall economic climate has put a crimp in business spending and lengthened equipment replacement cycles. At the same time the explosion in consumer demand for mobility, fueled in large part by the popularity of netbooks, has pushed up consumers' interest."

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The popularity of the USB form factor, which has all but eclipsed the older PCMCIA and CardBus formats, has also influenced consumer adoption with its compact size and ease of installation. Modestly declining modem prices have also boosted sales.

Although new mobile computing products will increasingly feature embedded modem modules, penetration will remain slow in the near-term: ABI Research believes that in 2009 less than 5 percent of laptops and netbooks have embedded modems. However over the long-term, the attachment rates will reach significant levels. In 2014, 48 percent of laptops and netbooks shipping will include 3G or 4G data connectivity.

Another factor will shape the market in the mid-term, says Orr. "In 2011 and 2012 we will see the first significant nationwide access to mobile WiMAX and LTE networks in multiple geographic regions. That will create demand to upgrade to compatible modems, breathing new life into the market."

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