Third-Party Base Station Software Market to Add $1 Billion by Mid-2010

• Posted: Thursday, February 19, 2009
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• Author: pradhana
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• Filed under: Market Survey

The market opportunity (TAM) for third-party software written for cellular base stations and other infrastructure will increase by about a billion dollars by the middle of 2010, according to a new Research Brief from ABI Research.

In the past, over 95% of the base station bill of materials was hardware, but now they use off-the-shelf hardware and 10% to 20% software. Large OEMs tend to purchase third-party, pre-integrated software or protocol stacks to develop infrastructure equipment. Benefits include faster development time, lower life cycle cost, and reduced R&D investment, project risk, and complexity.

Base station prices have significantly decreased in recent years. According to Senior Analyst Nadine Manjaro, “OEMs are still pressured to reduce costs due to competition. OEMs will look for alternatives which open the market for small start-up companies that specialize in developing protocol stacks and reference designs for emerging technologies.”

These companies bear the development risks for the new technologies and often sell their solutions to large OEMs who then package and brand the solution as their own. “Once emerging technologies gain traction in the market place,” adds Manjaro, “large OEMs dedicate internal resources to develop solutions, possibly even purchasing the suppliers.” [ABI Research]

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