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The market for cellular 3G modems is in flux as the technology advances rapidly and a growing range of devices have the opportunity to leverage wireless broadband. However, price erosion is constraining revenue growth as unit shipments continue to soar, claims In-Stat market research firm.

“The average selling price (ASP) of external or USB modems dropped more than 25% in 2009 to below $65 per unit in 2009. However price erosion will moderate in coming years, as multi-mode modems that also support WiMax, Wi-Fi or LTE gain ground,” said Allen Nogee, an In-Stat analyst.

In 2010, the market for 3G cellular modems (aside from mobile handset modems) will be worth over $3.5 billion. The external 3G cellular modem segment is larger than the embedded modem segment in 2010, but embedded modems are on a path to surpass external 3G modems.

The top reason cited by respondents to an In-Stat survey that made them averse to using cellular broadband services was slow performance.

Tags: 3G, LTE, WiMAX, Wi-Fi

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