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OEM and Retail MVNOs Will Have 505 Million Customers by 2014

  • Posted: Sunday, November 29, 2009
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  • Author: pradhana
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  • Filed under: Wireless Service

Mobile phones are being joined by a growing number of other wirelessly connected devices including laptops, netbooks, e-readers, portable navigation devices, mobile media players, mobile gaming devices, digital cameras. These fall outside the usual range of products sold and supported by mobile operators. Forecasts indicate that in 2014 there will be 2.5 billion connected data-centric devices in use worldwide, and of those, almost 1.5 billion will not be handsets.

The result, according to analysts at ABI Research, is that in the next few years, OEMs and large retailers selling these products will emerge as major providers of the cellular connectivity they use.

“Carriers tell us they view the wireless connectivity business model for these emerging devices as murky,” says senior analyst Mark Beccue. “They are quite prepared to sell connectivity wholesale, allowing retailers and OEMs to assume the role of primary service provider to their customers.”

The first signs of this shift are already visible: TomTom and Garmin have both announced partnerships with AT&T, allowing them to sell the connectivity for their navigation devices. In Japan HP offers a netbook for which it is the wireless service provider.

This trend will be common to all developed consumer societies, but, Beccue says, will be especially strong in North America, with its high multiple device ownership, large integrated market, and huge retailers. “These new service providers won’t dominate the market, but in North America in 2014 will provide as much as one third of the 595 million expected mobile data connections.”

Best Buy, for example, with its annual turnover of $40 billion and a growing mobile business, is in a prime position to become a wireless data connectivity MVNO.

“Data plans offered by retailers and OEMs will focus on pay-as-you-go services,” concludes Beccue, “or on models like that of Amazon’s Kindle, where the connectivity cost is built into the price of the content.” [ABIResearch]

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