Thursday, May 25, 2006

3G Embedded Modems the Latest Craze in Wireless

TechNewsWorld writes about the trend towards embedding new notebooks with "an integrated adapter that supports a variety of transmission speeds."

Allen Nogee, at In-Stat/MDR said, "Laptop vendors are interested in embedded 3G modems because it offers them the potential to differentiate their products and cellular carriers think it may encourage a few more users to rely on their services."

At this time, succes is still uncertain because "Prices for these devices are high, and currently, the modems lock customers into specific carriers' services, an unappealing option. Since cellular services have not been as functional as alternatives, such as broadband and WiFi they have not garnered widespread acceptance."

The netwrok operators are hoping that as 3G data networks become more commonplace, things will change. Ken Dulaney at Gartner said, "The uptick with cellular data services has not been as significant as carriers had hoped, so they have been looking for different ways to market their services."

The article notes that "simpler management may be another benefit. Since employees are working with the same modem and same cellular carrier, corporate IT staff should have less trouble pinpointing problems." Lower costs will help as well as Jack Gold at J. Gold Associates pointed out, "3G modem cards have been expensive, ranging in price from US$200 to $300." This is for enterprises to justify when the cost of the notebook itself is around $1000.

The article lists some of the notebook manufacturers now bundling Verizon Wireless and or Cingular Wireless EVDO/ UMTS and/or HSDPA connectivity with their notebooks such as Lenovo, Hewlett-Packard's (HPQ) and Dell (DELL).

However being locked into a specific carrier is slowing down adoption. J. Gold Associates' Gold said, "Since most users plan to keep their laptops for two to three years, they would have to upgrade their computers a couple of times, so we are recommending that they avoid the internal cards at this time."

In-Stat/MDR's Nogee opined, "I don't think the embedded modems will lead to many additional sales for hardware vendors."

The $50+ data service costs aren't helping either. Gartner's Dulaney noted, "If you think about it, how often would most users work with a cellular data service: maybe an hour or two when they are sitting at an airport. There are faster, less expensive options available to them, such as WiFi and broadband, if they really need to access to data."

In-Stat/MDR's Nogee said, "Eventually, the embedded modems will become more common, but in the short term, there does not seem to be many compelling reasons to buy them."

On the cost issue, I noted a while back that a more cost-effective alternative for enterprises just might be to outfit employees, who occasionally travel, with EVDO-enabled handsets from Sprint (S) and then sign them up for the $15 all-you-can-eat Power Vision data plan plus the $25 a month plan that lets you use the handset as a modem via a USB cable. Then workers have a phone plus can access data when the need arises...