Broadband-Enabled Devices to Grow 55-Fold by 2014

Shipments of e-book readers, GPS devices, gaming consoles and other broadband-enabled consumer devices are expected to reach 58 million by 2014, according to ABI Research. The jump from Wi-Fi to broadband creates a need for new business models on the vendor side.

Shipments of consumer electronics embedded with mobile broadband connectivity are zooming upward, according to a Jan. 4 report from ABI Research.

Shipments of the devices-which include e-readers, mobile digital cameras and camcorders, personal media players, personal navigation devices (PNDs), and mobile gaming devices-are expected to increase 55-fold between 2008 and 2014. This would bring total shipments to 58 million in 2014.

"While demand for products in the other categories is just starting to ramp up, consumers are already snapping up connected PNDs and e-book readers in numbers, and will continue to do so," said Jeff Orr, a senior analyst with ABI, in a statement.

Amazon made this clear over the 2009 holiday season, announcing that its Kindle e-reader was its best-selling product, and that on Christmas morning, for the first time ever, it sold more digital books than traditional books.

In the report, ABI describes how in the past, many of these devices featured Wi-Fi connectivity, but as they evolve to include additional connectivity options, vendors' business models are needing to adjust.

"When you embed a cellular or mobile broadband modem in a device, it becomes tied to a particular operator's service billing. That changes the device vendors' business model dramatically," said Orr.

The e-book connectivity model, in which the connection fee is built into the price of the device, is one that consumers, Orr said, are most comfortable with.

"In the case of a multiplayer game, for example, questions arise: Paying to download the game is straightforward, but beyond that, what's the appropriate model? Monthly subscription? Annual pass? Whom does the consumer pay?" he wrote in the report. "That very unfamiliar service aspect is scary for the device vendors."

Orr pointed to vertical industries for a partial explanation of the devices' growth-for example, the use of personal navigation devices in taxis-and said the possible business models for delivering content to them will depend on the costs of their data plans.

"The models being used for mobile data connectivity today are poorly matched to the kinds of mobile CE devices available," Orr said.