There’s been a recent press announcement by ABI Research on how their forecasts for femtocell sales has been reduced by an astonishing 55%. With a forecast of over 100 million in total by 2014 in their previous report, you’d think this would slash $5 Billion dollars from the market size over the next few years. Enough to make you rush out and sell any femtocell company shares you might have. Now that's grabbed your attention, lets clarify what is actually going on here.

It's all around the houses by now

Various websites have picked this story up and reported it in a variety of ways. Femtohub had a balanced view, pointing out that this reduction primarily affects this year (2009), which should be easier to estimate now that its almost ended. The longer term (and much larger) numbers forecast are only down by 10% and still exceed 40M units in 2014 alone.

My comment would be that ABI Research have always been among the top end of the femtocell forecasts and one of the industry’s strongest proponents. Other analysts have been more balanced and measured. Several are predicting somewhere around 20 million units per annum (compared to 40 million), but estimates vary widely. To be fair, this isn't an exact science and any prediction is subject to so many factors that there will be some discrepancy.

I saw a great presentation from iDATE analyst Mathieu Limousi  at Femtocell World Summit earlier this year. He quoted some practical experience of trying to buy a femtocell in the US – only Sprint had this prominently displayed in their store window and the staff inside had some idea what they were talking about.

Other analysts have been more measured

iDATE had forecast 9.7 million femtocell sales per annum by 2013 with around 50% of in North America alone, with some 23% in Europe and 26% in Asia. Regional disparities are due to different expectations associated with Femtocell.

North American users see strong value in the indoor coverage capabilities of the solution.

But consumers in Asia and Western Europe expect more than just a better quality network: for them, the added value of Femtocell is in its convergence features.

It's still a sizable market

This still relates to some Euro 875 million (approx $1.3Billion) in extra revenues for service providers of which some Euro 734 million (approx $1 Billion) will be spent on equipment. That’s still a tidy sum to be spent in the next 4 years on a brand new technology. When compared to AT&T's annual wireless revenues of around $40 Billion and capex investment of some $17 Billion, this doesn't seem so much. And compared to global annual wireless revenues of around $1 Trillion, it seems pretty insignificant.

Operators could easily afford to invest in femtocells if they choose to - a small change to their handset subsidy arrangements could affect this market dramatically.

And you can read more about it

We’re pleased to announce that ThinkFemtocell is now an authorized distributer for iDATE and offer this report for immediate download from our online shop. Customers can either pay online by card and be reading the report in minutes, or request an invoice be sent to their purchasing department.

The report comes with a full Excel spreadsheet containing market subscriber data per country and per operator for the last 3 years, plus forecast femtocell capex spend and operator revenues on a per country basis through to 2013.

Read on for full details of iDATE The World Femtocells Market Report 2009-2013 (published May 2009)

Comments (3)

ABI Research said:

	... Here is the exact wording of our press release - it specifically relates to 2009 and we have made it very clear that we still believe in the market and that 2014 numbers are only down by 10%
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November 20, 2009
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ABI Research said:

	... Above Link not working and so here it is again http://www.abiresearch.com/press/1544-2009+Femtocell+Shipment+Numbers+Cut+by+55%
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November 20, 2009
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ThinkFemtocell said:

Link still not working - here's an alternative. Despite several attempts I haven't been able to fix the link to the press release on the ABI site (something to do with the percentage sign perhaps), so give this link on BusinessWire which holds exactly the same announcement: http://www.businesswire.com/po...ewsLang=en My point was that this has been misreported elsewhere as happens with large percentage headlines. I'm happy to reinforce that this might not have been your original intention.

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November 20, 2009
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