IDC Market Forecasts for Mobile Broadband and LTE

At the March 10th IDC 2010 Directions Conference in Santa Clara, IDC analysts Amy Lind and Carrie MacGillivray predicted a 32% compound annual growth rate (CAGR) for global mobile broadband connections, which were projected fo reach over 350M by 2013.  [We wonder if those include M2M connections, which are potentially much larger than human held device connections].

More significantly, LTE was predicted to have a CAGR of 471%, with 2012 (and later for some countries) as the critical inflection point for LTE mass adoption.  The technology was said to: offer improved capacity, full mobility (vs “mobile” WiMAX portability), be Initially oriented toward PCs  with pricing In flux as operators continue to rethink their business models.  

By 2013, IDC predicts:

  • Mobile broadband will be ubiquitous and the defacto way of communicating
  • Business models will be focused on revenues per subscriber or device   
  • Global mobile services spending will surpass $975 billion
  • Iconic 4G devices will be critical to success

The two IDC analysts offered their essential guidance to session attendees:

  • Wireless carriers should place emphasis on data services, which are essential for revenue growth.  
  • Detailed market segmentation is required to focus devices (and apps) on relevant audiences.  To achieve this objective, IDC believes that wireless network operators will deepen partnerships with device and application vendors (AT&T and Clearwire are already doing this now).
  • Integration key to staving off wireless displacement and driving mobile broadband adoption

In a separate presentation, IDC Research Manager Godfrey Chua was very optimistic about LTE.  This author was stunned to hear Mr. Chua predict that LTE infrastructure equipment sales would overtake all WiMAX infrastructure sales by 4G 2011!  That’s less than 18 months from now!   According to Mr. Chua, both AT&T and VZW are looking to LTE to effectively deliver high quality mobile broadband service at the lowest cost per bit possible (through the more cost efficient OFDM based modulation and multi-carrier transport).  He sees 2012-2013 as the LTE market inflection point, which is consistent with the opinion of other IDC Analysts.  Why have all the major global cellular operators made such an early committment to LTE?  Here are a few reasons given: 

  • To deliver high quality mobile broadband at the lowest cost per bit
  • To relieve 3G capacity pressure by migrating laptop users to LTE
  • To create a more robust platform for applications and services –that lead to new business models and therefore revenue streams         

Godfrey next compared the rationale and position of LTE (vs WiMAX):

  • To address capacity pressure in 3G networks (vs WiMAX to address underserved broadband connectivity demand)
  • Full mobility is the value proposition (vs WiMAX portablity of netbooks/notebook access)
  • Geared towards developed markets (vs WiMAX orientation toward emerging markets)
  • Relevance to emerging markets not until 2015 (vs WiMAX being always relevent to emerging markets)                                 

2010 will be a critical year for LTE network equipment companies as they all seek to build momentum. in the forthcoming global market.  Mr. Chua sees Ericsson and Huawei as early leaders in providing LTE gear.  He says that Alcatel – Lucent’s Verizon Wireless win is key, but now they must convert trials into contracts.  Meanwhile, Nokia Siemens Networks is  looking to maintain relevance in LTE.  The competitive pressure will surely intensify as other players –Motorola, ZTE, NEC and Fujitsu –seek to up the competitive ante. 

In closing, Godfrey offered the following essential guidance: 

  • Realization of the long-held vision for the network is near
  • Mobile data traffic will continue to explode
  • Network transformation is critical, it is key to remaining competitive
  • Green efforts will persist, it goes hand in hand with the transformation process
  • Vendor positions will continue to shift

Some additional predictions from IDC Analysts:

John Gantz, Chief Research Analyst: 

-By the end of 2010, there will be 1B mobile Internet users and 500K mobile phone apps.   1.2 billion mobile
phones will be sold; 220 million smart phones.  630 million laptops in place; 80 million netbooks. 

–There will be many intellgent devices communicating with machines/computers.  M3M is a potential high growth area.

-Complexity will increase 10X in the next 10 years

-By 2020, there will be 31B connected devices, 2.6 billion phones, 25M apps, 450B interactions per day, 1.3T tags/sensors

Rick Nicholson, Vice President, IDC Energy Insights: