The market for cellular 3G modems is in flux as the technology advances rapidly, reports In-Stat. In addition, 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.

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, WiFi or LTE gain ground.

Recent research by In-Stat found the following:

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.
The research, “The Cellular Broadband 3G Modem Market: Multi-mode and Hotspots add Spice to Life” (#IN1004602SI), covers the worldwide market for cellular broadband 3G modems. The report reviews the 3G cellular modem market, but does not include modems used in mobile handsets. It includes:

Examination of an In-Stat survey of cellular modem users covering access and service.
Forecasts of worldwide 3G cellular modem shipments, average selling prices, and revenue by type through 2014.
Analysis of market drivers and barriers.
Vendor profiles: C-motech, Huawei, Novatel Wireless, Option Wireless Technology, Sierra Wireless, Ericsson, Icera, Qualcomm, and ST-Ericsson.