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Industry News

Cellular PC Card Market Positioned for Robust Growth

February 28, 2004
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The cellular PC card (CPC) industry features both IT-centric companies, like Dell computer, and those more closely aligned with the wireless industry, like Nokia and Sony Ericsson. Although many players have tried and failed in this business, success rests with those who have strong relationships with both operators and IT product distributors. The industry currently stands at a high growth potential, with numerous high speed 3G network launches planned across the globe in the next few years, according to the technology research firm ABI.

Operators recognize the sustained average revenue per user (ARPU) boost that CPC modems bring. This is evident with recent announcements made by AT&T and Vodaphone, which launched EDGE and UMTS networks, respectively, accompanied with an emphasis on CPC modems. “With the right target audience, CPC modems give operators immediate access to a pool of enterprise users who would like to capitalize on high speed networks. This is an interesting twist, compared to earlier adopters of 3G, where operators like NTT DoCoMo and Hutchison 3 focused on individual users,” comments ABI analyst Kenil Vora.

In order to retain customers, operators subsidize handsets offered to individual users, sustaining lower ARPUs. On the other hand, with the CPC model, operators target price insensitive enterprise users, obviating the need for high device subsidies. Further, the high ARPU enterprise user brings in a larger, recurring stream of revenue for the operator. Data usage pricing remains an important aspect for the success of CPC modems; flat pricing adopted by a few operators in North American markets has worked well. ABI expects substantial rise in volume of CPC modems with the continued deployment of 3G networks across the globe. Over time, ABI expects GSM-family devices to comprise a much larger share of CPC modem shipments as 3G networks in Europe and Asia launch.

Threat from Wi-Fi is obvious, but it does serve to increase the awareness of mobile computing, thereby working to expand the CPC market. Vendors like Ercisson, Option and Nokia offer GPRS/Wi-Fi combo modems.

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