The market for mobile broadband-enabled consumer devices, which include eBook readers, navigation devices and mobile gaming devices, is expected to increase 55-fold over the next five years, according to a recent study by ABI research.
In past years, many of these devices featured Wi-Fi connectivity. But as the technology has evolved and begun to include additional connectivity options, the study predicts vendors' business models are going to require significant adjustment.
"When you embed a cellular or mobile broadband modem in a device, it becomes tied to a particular operator's service billing," says Jeff Orr, a senior analyst with ABI. "That changes the device vendors' business model dramatically."
The e-book connectivity model, for example, in which the connection fee is built into the price of the device, is one that consumers, Orr says, are most comfortable with.
"In the case of a multiplayer game, for example, questions arise: Paying to download the game is straightforward, but beyond that, what's the appropriate model? Monthly subscription? Annual pass? Whom does the consumer pay?" he wrote in the report. "That very unfamiliar service aspect is scary for the device vendors."
There are a host of vertical industries that have helped to build the mobile broadband consumer market. The use of personal navigation devices in taxis, for example, resulted in an explosion in sales. The study says the possible business models for delivering content to those devices will depend on the costs of their data plans.
"The models being used for mobile data connectivity today are poorly matched to the kinds of mobile CE devices available," Orr said.