10th March , 2004

US : When the various governing bodies responsible for allocation of spectrum in most European nations doled out licenses for 3G UMTS networks, they were done so with strings attached: launch timelines. And now, despite delays, operators in Europe have had to launch 3G services in order to abide by their licensing agreement despite a complete dearth of marketable handsets.

Most 3G Handset vendors have been scrambling to provide solutions for next generation wireless networks, in which multi-modal handoffs (passing off among several different air interfaces without dropping a call) is key to success. While NEC has perhaps the broadest product offering to date, the available offerings from all vendors are thus far proving unreliable and clunky.

While carriers have been left waiting to expand their overpopulated voice networks, and vendors are scrambling to produce a 3G handset with form and function, an unlikely vendor segment stands to benefit: Cellular PC card (CPC) modem manufacturers.

Though the market for CPC modem cards (these are PCMCIA devices that enable a laptop to connect to a cellular network for web access and email) is relatively small (about 1 million units shipped last year worldwide), it could be a potential boon to vendors like Sierra Wireless, Option and Novatel Wireless.

"Traditional CPC modem vendors are gaining some attention and getting a chance to display their capabilities as a result of this development," says Kenil Vora, an analyst at ABI Research. "This could provide a solid boost to some of these smaller vendors who successfully leverage this opportunity."

In the long run, most of the insiders with whom ABI Research has communicated about this market have indicated that at the end of 2004 there will be a reliable and suitable 3G handset. In the meantime, one of the unlikely winners in the GSM-centric Europe is proving to be Qualcomm. Long a bane to their competition with their proprietary CDMA technology, Qualcomm is now profiting from the GSM camp through their WCDMA or UMTS chipsets. In fact, of Qualcomm's 17 UMTS partners, two are the CPC vendors Sierra Wireless and Option. Qualcomm has taken an early lead in the UMTS chipset market, driven in part by these early wins.

The ABI report, "Cellular PC Card Modems: Device Forecasts and Technology Assessment for Wireless Data Usage," tracks global trends in the CPC market and technology mix. The report includes in-depth analysis of shipments, market share, average selling price, technology mix, and a host of other data matrices. The ABI report, "Wireless Infrastructure Contract Awards," tracks contracts awarded by operators worldwide and dissects the data for various analytical purposes. The report segments contract awards by operator, technology, and vendor.

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