2009 Femtocell Shipment Numbers Cut by 55%

LONDON - November 12, 2009

In an update to an April 2009 femtocell shipments forecast, ABI Research has scaled down its estimates, reflecting the slower-than-expected adoption of femtocells by mobile operators. The number of shipments forecast in April for 2009 – 790,000 – has been adjusted by about 55%. ABI Research now believes that only about 350,000 femtocells will have shipped by the end of the year.

“Even femtocell vendors are a bit surprised that the operators haven’t pushed femtocells as much or as soon as expected,” says practice director Aditya Kaul. “We expect that deployments in 2010 will pick up but will be slower than expected – our data suggests about a 40% reduction on previous estimates.”

All the large operators in the US have femtocell offerings including AT&T, Verizon and Sprint. Vodafone in the UK also has a femtocell service and recently China Unicom announced its femto offering.

Still the pace of adoption has been slow. Why? Carriers are tight-lipped about their reasoning. While some observers say femtocells have yet to prove their value, Kaul points to a combination of other factors: the general economic malaise, which makes the $150 pricetag of an unsubsidized femtocell harder to swallow; the time operators need to get their systems and networks ready for a femtocell deployment and to devise innovative pricing plans; a fear in some quarters that a rapid increase in femtocell numbers would cause interference in the macro network.

Kaul concludes: “We still believe in this market’s potential. We anticipate that by 2014, shipments will only be about 10% lower than our previous estimates. The drivers are real, but it will take longer than anticipated. Next year will be critical: if conditions don’t improve by the end of 2010, some smaller vendors may find themselves in trouble.”

ABI Research’s “Femtocell Market Data” provides a biannual update to the core forecasts included in the firm’s Femtocells Research Report. This forecast mirrors the one included in that report and is designed to incorporate all major changes in the market over the previous six months. Such an update is extremely important given the rapid changes in the femtocell market.

It is part of the Femtocells Research Service.

ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advise thousands of decision makers through 27 research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.