Mobile Broadband Modem Vendor Matrix

Leading Vendors for Mobile Broadband Modem Data Cards

Introduction

ABI Research prepared this Vendor Matrix to present unbiased ratings of all the current vendor offerings based on product Implementation and Innovation of mobile broadband data card modems (modems incorporating USB and PCMCIA interfaces).  Several criteria were evaluated to determine the ratings of particular vendors’ mobile broadband modem offerings.

Results Summary

In 3Q 2009, ABI Research found Sierra Wireless gaining top honors, followed closely by Huawei Technologies, and Novatel Wireless.  Huawei had the best Implementation score of all companies, carried by high rankings in market share and cost. Sierra Wireless and ZTE also scored well in Implementation.  Sierra Wireless and Novatel Wireless had the highest ratings for Innovation.  

The seven vendors evaluated in this matrix are: C-MOTECH, Huawei Technologies, Novatel Wireless, Option Wireless, Sierra Wireless, Sony Ericsson, and ZTE.  Compared to the previous year’s results, Huawei dropped one position below Sierra Wireless.  Sierra Wireless gained a Top Three market share across all data card modem form factors in 2008 along with a commitment to Plug and Play installation simplicity.  The other vendor to move in the rankings was Option Wireless Technology.  Option scored lower than its competitors in some key areas, finishing in fifth position in the overall vendor ranking scores.  ZTE made significant gains in USB modem market share during 2008, helping it move into the fourth ranking.  ZTE has characteristics similar to Huawei when ranked on complementary product offerings and financial health.  C-MOTECH and Sony Ericsson occupy similar positions in the vendor rankings as they scored lower overall across implementation and innovation, but for different reasons. 

Criteria Overview

Under Implementation, ABI Research examined the vendors’ capabilities across the categories of certification and integration support; breadth of product line; complementary product offerings; Tier Three customer support; market share; financial and organizational health; and product cost.

Under Innovation, ABI Research scrutinized the following criteria for PCMCIA Cards and USB modems: design; Plug and Play; performance; durability; feature functionality; GSM network coverage; CDMA network coverage; and WiMAX network coverage.

Implementation Criteria Detail and Weighting

Certification and Integration Support (12%):  Modems need certification on several levels before they can be offered to customers.  Certification includes providing suppliers with a reference design for initial testing by operators for external modems (IOT, GCF) and by laptop OEMs for internal modems.  Certification support also includes testing the finished product — a PC Card or USB modem; a laptop with embedded modem; or a WWAN/Wi-Fi router for RF performance, and spurious emissions.  Another requirement for certification support involves interacting with regulatory agencies to obtain product approvals. 

Integration support is focused primarily on internal modems used in laptops and WWAN/Wi-Fi routers.  This support includes providing design and testing expertise to reduce time-to-market and to improve performance of devices with embedded modems as well as antenna design capabilities helpful for external and internal modems. 

Scoring well in this category is dependent on the range of form factors and machine types covered, and the regions served by the particular company.

Testing Certification Organizations include:

·         Operator: for IOT (Network Interoperability Testing) and GCF (Global Certification Forum roaming acceptance)

·         FCC and other regional regulatory bodies: RF Emissions

·         CDMA (CDG):   Mobile Station Conformance Specification

·         GSM (GSMA): Mobile Station Conformance Specification

·         WiMAX (WiMAX Forum): Mobile Station Conformance and Interoperability Specification

·         3GPP/3GPP2/IEEE: Standards Development Organizations

·         OEMs and ODMs

Machine Type Expertise:

·         Laptops and Netbooks

·         Ultra-Mobile Personal Computers (UMPCs)

·         Mobile Internet Devices (MIDs)

·         M2M

·         Fixed/Wireless Terminals

Applications Expertise:

·         SMS

·         MMS

·         PCM voice

·         Video

Operating Systems:

·         Windows

·         Mac OS

·         Linux

·         RTOS

Breadth of Product Line (14%): Breadth of product line includes the number of form factors produced as well as the band and frequency breadth in each modem form factor.  Having a wide product line offers several advantages:  First, it gives operators and device OEMs a one-stop shop for their modem needs.  Second, it deters rivals from entering the marketplace because of the competition in every product category.  Third, many of the functions needed to offer mobile broadband modems are similar, regardless of form factor, providing advantages in economies of scope.  Finally, there are economies of scale as the basic components of mobile broadband modems are similar, regardless of form factor.

·         GSM coverage — PC Cards

·         CDMA coverage — PC Cards

·         WiMAX coverage — PC Cards

·         GSM coverage — USB Modems

·         CDMA coverage — USB Modems

·         WiMAX coverage — USB Modems

·         GSM coverage — miniCards

·         CDMA coverage — miniCards

·         WiMAX coverage — miniCards

Complementary Product Offerings (12%): Products that are complementary to mobile broadband modems include connectivity software, handsets, mobile middleware, and mobile infrastructure.  The existence of complementary products among mobile broadband modem vendors provides them with possible economies of scale as well as the ability to sell operators bundles of products that include mobile broadband modems.  The bundles may offer the operators better pricing as well as the opportunity to limit the supplier base.

Tier Three Customer Support (6%): All modem vendors should have technicians available to address questions from end users directed to operators and OEMs.  The ability to offer support to operators and OEM customers in a variety of languages is a possible differentiator in this category.  The regions covered will dictate the Tier Three support capabilities.  Many operators are expected to provide English-speaking support personnel to address communication difficulties.

Market Share (24%): Market share is a reflection of a company's business strategy success.  At a high level, market share rank is the culmination of company performance in minimizing production costs, including management of the supplier base, and maximizing relationships with operators, OEMs, and VARs to increase sales volumes.

Financial and Organizational Health (11%):  Financial and organizational health dictate near-term and long-term supply for the marketplace.  Risk in this category is based on a company's overall financial and organizational health, regardless of the mobile broadband modem line and other products and services.

Low Cost (21%):  Low cost enhances opportunities to win business and increase shipment volumes.  A lower cost to operators allows them to maximize their subsidization budgets.  A lower cost to device OEMs allows either lower prices for customers or greater rewards to operators for promoting embedded devices.  As cost data is not available from each vendor, cost to operators is dictated by feature capabilities and 2008 shipment volumes in total modems, USB modems, PC Cards, and miniCards.  In addition, companies that sell other wireless and telecommunications products can offer even lower prices if modem sales are accompanied by other telecommunications equipment sales to operators.

Innovation Criteria Detail and Weighting

Mobile broadband PC Card and USB modems are separately scored for each of the following criteria.  The results are blended with weighting favoring USB modems as the dominant form factor for data cards.

Design (13%): Design relates more to the exterior and physical features of the modem including size, branding surface area, color options, connection options, and modem mechanics such as antenna flexibility and rotation features, and finally uniqueness of design.  In general, smaller is better for PCMCIA Cards and USB modems as it is unlikely that the devices will become so small that they cannot be branded with operator or company logos and may be easily lost.  The PCMCIA Card category ranks higher if ExpressCards are in the modem portfolio.  Connection options are most applicable to USB modems as they can be connected to laptops via tethering or a stick connection or other variations.  Modem mechanics under the design category relate to features that allow ease of positioning for the customer.  This includes tethered modems, modems that rotate about the connection, and antenna flexibility.

Plug and Play (15%):  Plug and Play requires that the modem connectivity software and drivers are loaded on the modem itself or a CD is used to load the drivers and connectivity software.  Modems that do not require CD loading software are preferred by customers.

Performance (10%): Performance is the ability of the mobile broadband modem to connect and maintain connection in different locations of a base station's coverage area.  This feature is difficult to measure and even customer survey research does not reveal any data concerning differences among modem vendors.  However, some modems are designed to provide maximum antenna reception via the device’s mechanics.  This category is based on the antenna’s physical design features that improve reception performance — basically the ability to place the modem as high above the laptop as possible and/or have a port for an external antenna.  This factor also rates higher if the product incorporates receive diversity and equalization.

Durability (18%): Durability relates to modem design that avoids possible damage and breakage.  Antenna and connector breakage are the primary evaluation areas for this category.

Feature Functionality (15%): Feature functionality rating is based on the tendency of the modem vendor to add new features to supply customers with innovative functionality and services, and to provide operators with the opportunity to monetize these features.  At this point, the rating in this category is more focused on whether the modem vendor has been adding new features rather than the value of those features to the greatest number of customers.  Features introduced in modems in 2008 include GPS, circuit-switched voice, memory card attachments, and mobile television receivers.  This category also addresses the ability of the modem to work in devices using Microsoft Windows, Apple Mac OS, or both.

GSM Coverage (17%):  GSM networks provide coverage to 82% of the world's mobile customers.  Suppliers are also rated higher if GSM coverage is for the fastest networks as modems based on the fastest network technologies tend to have the highest sales.

CDMA Coverage (8%): CDMA networks provide coverage to 18% of the world's mobile customers.  Suppliers are also rated higher if CDMA coverage is for the fastest networks, since, as noted above, modems based on the fastest network technologies have the highest sales. .

WiMAX Coverage (4%): WiMAX networks provide the first 4G mobile broadband experience for the world's customers.

 

Rankings

After individual scores are established for Innovation and Implementation using the above criteria, an overall company score is established using the Root Mean Square (RMS) method:

The resulting overall scores are then ranked and used for percentile comparisons.

The RMS method, in comparison with a straight summation or average of individual innovation and implementation values, rewards companies for standout performance.

For example, using this method a company with an innovation score of 9 and an implementation score of 1 would score considerably higher than a company with a score of 5 in both areas, despite the mean score being the same. ABI Research believes this is appropriate as the goal of these matrices is to highlight those companies that stand out from the others.