Fifty-five times more mobile consumer electronics by 2014: ABI

By Chris Harnick

January 6, 2010

Amazon Kindle lets consumers download books, newspapers and others

ABI Research is predicting that consumers will be extremely more mobile by 2014, 55 times more than they were in 2008.

The research firm has forecasted that by 2014 mobile gaming devices, ebook readers, mobile cameras, personal media players and personal navigation devices will reach total shipments of 58 million. Ebook readers and personal navigation devices are currently in high demand.

�In the case of ebook readers, the model in which the price of the connection is built into the price of the content seems to be acceptable to consumers,� said Jeff Orr, senior analyst of mobile devices at ABI Research, New York. �Paying each time you download a piece of content works for this supply chain.

�Some uptake of these devices can be attributed to vertical industries,� he said. �Think of vehicle fleets and taxis with always-connected personal navigation devices, which are popular in Western Europe.�

ABI Research provides analysis and forecasting of trends in global connectivity and other emerging technologies.

One of Garmin's navigational devices

eReading convenience
Mr. Orr said consumers are embracing ebook readers and personal navigation devices because the two technologies address specific needs.

Connected navigation devices allow for real-time information overlay to the device. This is valuable for service-oriented vehicle fleets where time is money.

Ereaders, such as Amazon�s Kindle family, address the needs of voracious readers and business travelers who find convenience in consuming content on a single platform instead of carrying a bag full of books and periodicals.

Amazon targets all readers who own an iPhone or iPod touch

Yet, eReaders will not reach mass-market appeal in 2010, Mr. Orr said.

Despite vendor proclamations that eReaders would be the hot technology gift at the end of 2009, Mr. Orr said the category has not yet established a value proposition for the mass market.

�The early adopters of eReaders have been business travelers and voracious book readers who find convenience toting a single electronic slate instead of an entire book bag,� Mr. Orr said. �With baggage restrictions on commercial airline flights limited to one carry-on, it�s no wonder that an alternative was needed.�

To get beyond the early adopters, Mr. Orr said ereader vendors need to examine the alternatives � smartphones, laptops, netbooks and paper.

Initiatives to move companies and industries to paperless offices have not succeeded, but will eReaders be the catalyst needed?

Who gets the check?
Mr. Orr said the business model of buying and downloading a book or newspaper subscription over the cellular network has not been much higher than getting the printed versions. Subscribers are not aware they are paying for the download service.

However, challenges do remain for these mobile devices.

Possible business models for delivering content and interactivity to these devices hinge on the cost of a data plan.

When companies embed a cellular or mobile broadband modem in a device, it becomes tied to a particular carrier�s service billing. This changes the device vendors� business model.

For example, with a multiplayer game, the consumer pays to download the game, but then how is it monetized � monthly subscriptions or an annual pass? What company does the consumer pay?

Mr. Orr said consumer electronics vendors are confused.

�The business model for ebook readers of wholesale mobile broadband access paid for in the proceeds for content sales appears to be working,� Mr. Orr said. �However, once a user desires to use the Internet on that platform, the business model breaks. Who pays for the access?

�Experimentation in business models will occur for several more years as providers seek to strike a balance between the value of Internet connection and users and as new mobile consumer electronic devices come to market that do not fit cell phone or wholesale experiences,� he said.