Yankee Group’s 2011 Predictions for 4G + Infonetics report on 2G/3G Market

In its new report:  “4G Fuels the Decade of Disruption,” the Yankee Group predicts a slow start for 4G but says moves made by players in 2011 will determine their ultimate fate in the marketplace.

“Connectivity—especially mobile connectivity—drives disruption in the telecom arena,Once 4G takes hold, its impact will be swift and profound, and 2011 is the year to prepare.”” said Jason Armitage, senior analyst at Yankee Group and a co-author of the report. We are hoping to have a phone interview with Jason who works and lives in London, England

Here are the 2011 predictions for 4G from Yankee Group:

1. 4G will be a “drop in the ocean.” By the end of 2011, the world’s most important 4G technology (LTE) will account for only 0.04 percent of all global mobile lines (but 0.33% in US).

2. 4G will fail to win the enterprise. Currently, less than a third of enterprise decision-makers believe 4G is important; that number won’t budge by year end.

3. 4G killer device will be a hotspot. Users will gravitate to hotspots’ simplicity and savings, reducing 4G subscriptions in the long run.

4. Competition in the U.S. will create a 4G marketing mess. As operators slap the “4G” moniker on everything from WiMAX and LTE to HSPA+, confusion will abound.

5. A denial-of-service attack will take a 4G network down. In their rush to roll out 4G, operators are cutting corners on security; one unlucky operator will pay the price.

6. Chinese vendors will beat 3G incumbents in their own backyards. Both Huawei and ZTE will make key 4G wins outside Asia, to the detriment of established players.

7. 4G users will spend twice as much time on the mobile Web as their non-4G counterparts. Companies that invest in mobile Web sites and free or near-free rich media content will benefit most.

8. Mobile video will not drive consumers to 4G. Mobile video won’t be the killer 4G app everyone expects; instead, consumers will spend more time with music services like Pandora and Slacker.

9. The Web will not save operators in the mobile apps market. Operators think 4G will give them a leg up in mobile apps, but Apple and Google will still lead the market in 2011.

10. MVNO hype will build, but most of it will lead to nothing. 4G MVNOs will fail for the same reason most 2G and 3G MVNOs failed: Most won’t complement their hosts’ businesses.

11. Pricing will end in tiers. 4G will herald the introduction of tiered mobile data pricing models, and flat-rate pricing will be gone forever.

12. Carrier VoIP will still be AWOL, despite 4G. 4G’s speed and bandwidth are multimedia must-haves but not big voice necessities. Few operators will launch services before 2013, allowing over-the-top companies to gain an early lead.

13. Google will take the wheel in mobile data. Currently behind Apple and others in the mobile space, Google will quickly grab the mobile lead as 4G rolls out.


Infonetics Research (http://twitter.com/infonetics) released its 3Q10 report on  2G/3G Mobile Infrastructure and Subscribers market share and forecast.


. The worldwide 2G and 3G mobile infrastructure market grew 2% in 3Q10, to $8.8 billion

. The overall market is still down year-over-year (-20.7% from 3Q09), when the market was inflated by massive 3G rollouts in China

. All major segments of the market posted sequential gains, including radio access network (RAN), mobile switching subsystem (MSS), mobile packet core, and home location register (HLR) equipment

. Since its peak of $42.5 billion in 2008, annual spending on just RAN equipment — base transceiver stations (BTS), base station controllers (BSC), and remote radio heads (RRH) — is dropping almost $10 billion, to an expected $33.4 billion in 2010

. The GSM RAN equipment market bounced back in 3Q10, up 12.5% sequentially, led by major 2G capacity upgrades in China and India

. Ericsson remains the King of the Radio, with double the revenue market share of its nearest competitor, Nokia Siemens, for worldwide macrocell RAN equipment

. In the mobile packet core equipment segment — in which Ericsson is also #1 — just 3 quarters ago the spread between #2 Nokia Siemens and #3 Cisco was about 13.5 percentage points; in 3Q10 the distance between them is only 2 percentage points

. The number of mobile subscribers passed the 5 billion bar in 2010 and is on track to hit 6 billion between 2012 and 2013

-With the worldwide population now at 6.9 billion, it is very likely that mobile penetration will exceed the global population in the near future

Infonetics Analyst Comment:

“As we anticipated more than a year ago, in the third quarter of 2010 the mobile infrastructure market was marked by the start of 2G capacity upgrades and modernization projects, sustained but slowing 3G activity in North America, and the start of 3G rollouts in India. Despite the misleading ‘4G’ pandemonium in the US, 2G is back in full force and will keep the planet busy for the next few years as global mobile penetration reaches 100%,” predicts Stéphane Téral, Infonetics Research’s principal analyst for mobile and FMC infrastructure.

More info at:  www.infonetics.com