Intel/Nokia partnership ups the ante for wireless laptops

1 November 2006 Telecoms, Datacoms, Wireless, IoT

The 27 September announcement by Intel and Nokia that they will partner to offer embedded wireless Internet connectivity in laptops has not only changed the market outlook for embedded cellular modems in portable computers; it also hit the share prices of competing wireless modem makers Novatel Wireless and Sierra Wireless.

The 27 September announcement by Intel and Nokia that they will partner to offer embedded wireless Internet connectivity in laptops has not only changed the market outlook for embedded cellular modems in portable computers; it also hit the share prices of competing wireless modem makers Novatel Wireless and Sierra Wireless.

"The Nokia/Intel partnership to produce an embedded HSDPA Mini-card modem will not only accelerate the market for cellular connectivity in notebooks," says ABI Research senior analyst Philip Solis. "Intel is also taking a first step towards the eventual inclusion of WiMAX wireless broadband in portable computers. The eventual goal is to offer multiple connectivity options."

Cellular modems for laptops come in two form-factors: PC cards and embedded modems such as the ones Intel and Nokia plan to offer. While PC cards will continue to be sold on an aftermarket basis for some time, particularly for new air interfaces, the real future of the market lies with embedded modems which will make up nearly 17% of the total this year. That proportion will increase steadily over time.

Falling ASPs and increasing shipments mean that 2006's expected $1 bn revenue from cellular PC cards and embedded modems in laptops will increase to nearly $3 bn in 2010, as detailed in a recent ABI Research study. The growing revenue from cellular PC modems is the result of two trends: shipments are growing steadily, and increasingly, they are of the more expensive 3G modems.

ASPs for both forms started to decline this year, and will continue to show a gradual, almost flat rate of decrease through the end of the study's forecast period. But even that decline will be insufficient to dent the revenue growth for vendors such as Option NV, Novatel, Sierra Wireless and Sony Ericsson, resulting from higher shipment volumes and a greater proportion of more expensive 3G modems.

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