Market research firm Infonetics Research today released excerpts from its new Small Cell Equipment market size and forecast report. The first-of-its-kind report tracks small cells in the context of low power mobile network nodes known as microcells, picocells, and femtocells (public space, not residential) made by the “Big 5” RAN (Radio Access Netowrk) vendors — Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks, and ZTE – as well as small cell specialists like ip.access, Contela, Juni, Minieum Networks, Ubiquisys, and others.

ANALYST NOTES
“While small cells, including microcells and picocells, have been used for the past two decades to improve voice coverage, now mobile broadband is shifting the game to capacity upgrades,” notes Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research. “Therefore, the chief objective is to complement and enhance the macrocell layer from a capacity standpoint with a new breed of low-power nodes like public space femtocells and WiFi. But dividing the macro layers into smaller cells remains challenging due to inter-cell interference and backhaul issues. The question is: how small can the cell be? Because the smaller the cell, the higher the number of units required to cover an area, and that will determine the true size of the small cell market.”

Principal analyst and Infonetics co-founder Michael Howard adds: “Our small cell forecast is not a pie-in-the-sky, new-technology-honeymoon forecast based on futuristic 2020 technology visions of small cells on every city block. We developed our forecasts after a solid year of work by several Infonetics analysts and our research team with mobile operators, manufacturers, and chip suppliers. We examined, discussed, challenged, and listened-often on multiple occasions-to the major footprint operators to learn about their thinking, planning, testing, and trialing across their realities of today’s operations, budgets, target small cell pricing, sizing and form-factor requirements, emerging technology issues, location-sensitive pico-to-macrocell ratios, and small cell layer automation and coordination with the macro layer. And in all of this, we explored with them what they think is realistic over the next few years.”

SMALL CELL MARKET HIGHLIGHTS
.    Infonetics forecasts the global small cell market to grow rapidly, with about 3 million small cells shipping and the market worth about $2.1 billion in 2016
.    Small cell market growth is being driven by operators seeking to enhance saturated macrocellular networks that are currently struggling to maintain a decent mobile broadband experience for subscribers
.    For the next 3 years or so, most operators are planning small cells only in the urban core
.    Infonetics expects public space femtocells to make up more than 50% of all small cells shipped in 2012
.    In 2013, Infonetics expects 3G small cells to make up 63% of global small cell shipments, with 4G small cells kicking off and ramping up rapidly to make up 37%
.    4G small cell shipments will overtake 3G small cells by 2015
.    From a geographic perspective, early femtocell adopters such as AT&T, Softbank, and Vodafone and macro network density dictate which regions represent the largest small cell opportunities, with Asia Pacific expected to lead with 44% of all units shipped in 2012, followed by EMEA with 32%

REPORT SYNOPSIS
Infonetics’ new biannual Small Cell Equipment report provides worldwide and regional market size, forecasts, and market analysis for 3G microcells, picocells, and public space femtocells (W-CDMA/HSPA and CDMA2000/EV-DO) and 4G (LTE) FDD and TDD mini eNodeBs and public space femtocells. The 22-page analysis report that accompanies the customizable Excel report includes in-depth analysis and data charts, a Mobile Operator Small Cell Strategies Tracker, Customer Wins and Service Provider and Vendor Announcements, and a Small Cell Specifications Comparison. Vendors whose small cell solutions are tracked in the report include Airvana, Airwalk, Alcatel-Lucent, BelAir, Cisco, Ericsson, Fujitsu, Huawei, ip.access Motorola, NEC, Nokia Siemens Networks, Samsung, Thomson, Ubiquisys, UTStarcom, ZTE, ZyXEL, and others.

RELATED RESEARCH
.    Femtocell market set to double in 2012, Airvana expands lead
.    Operators turn to femtocells to improve enterprise coverage and capacity
.    Adoption of small cells / public space femtocells reflects a mobile world in transition
.    Small cell survey shows operators plan to run 12% of network capacity on small cells by 2012
.    New study details operator plans for small cell backhaul
.    Femtocell operator survey provides glimpse into the future of femtocell services

Regarding Femtocells, the company states:

“This year the femtocell market will scale up significantly and break out into clearer market segments: consumer, enterprise, and rural and metro public space femtocells. As price points continue to come down, we expect to see global femtocell revenue nearly double this year while unit shipments grow at nearly 140% compared to 2011,” predicts Richard Webb, Directing Analyst for microwave, mobile offload and mobile broadband devices at Infonetics.

FEMTOCELL MARKET STATS:
•Worldwide revenue from 2G and 3G femtocells used in consumer, enterprise and public spaces grew 9% sequentially in the third quarter of 2011, with 2G femtocell revenue declining and 3G femtocell revenue ramping
•Year over year (3Q10 to 3Q11), global femtocell revenue is up 37%
•W-CDMA/HSPA femtocells accounted for 72% of all femtocells shipped in 3Q11
•4G LTE femtocells are expected to start shipping in late 2012
•Femtocell market leader Airvana is the first to break through the US$25 million quarterly revenue threshold, expanding its revenue market share lead significantly
•The Cisco/ip.access partnership maintains its lead in terms of femtocell unit share, and increased its quarterly femtocell revenue to its second-highest level to date, but did not gain revenue market share as other players also posted notable gains, including Huawei and NEC/Ubiquisys
•A growing number of operators are offering free femtocells to their consumer subscribers, including SFR France, Softbank in Japan, and Cosmote in Greece.

AW Comment:  AT&T has been offering free femtocells in rural areas without cell phone coverage to any customer buying an iPhone.  My neighbor in Blue Lake Springs, CA has one and it works great over for cellular voice and data from his iPhone over limited distance of 50-60 meters.