By Aditya Kaul
This year, the residential femtocell market has not seen the big launches it saw in the last few years from Vodafone, AT&T, or Sprint. Volumes will be well short of earlier expectations, probably by as much as 1 million-plus units. Vendors blame operators for not being active enough and operators blame vendors for not providing the right price.
Operators Move too Slowly, Vendors Don’t Carry Clout
The operators that have launched femtocells have been slow movers, not inclined to roll out femtocells in very large numbers. For them, femtocells are a Band-Aid, something to soothe frazzled customers with a coverage issue. We doubt many operators will imitate France’s SFR, which used femtocells as a competitive play – and even SFR has conservative estimates of femtocell shipments to its 3G customers, despite making them available to their complete 3G customer base free of charge.
Vendors have been marketing femtocell but to operators, investors, or analysts instead of to consumers. Small surprise that a recent ABI Research consumer survey revealed 80% of mobile users have never even heard about femtocells, as I highlighted in this earlier post.
Step in, Apple
In reality, the femtocell market needs an evangelist; not an operator and not a vendor, but someone who can truly break femtocells away from their shackles. Who’s the ideal candidate? Apple. The company is known for its simplistic, but revolutionary designs, its consumer-friendly products, and its anti-user-manual philosophy. Apple has single-handedly moved the mobile industry beyond mobile as a voice and text utility. It could work the same magic with femtocells.
Apple has a Wi-Fi access point called Airport Express. If it were femto-integrated, it would benefit Apple and its customers. The assumption is that Apple users switch to Wi-Fi indoors, but with a femto-integrated Airport Express, 3G/4G would become the primary connectivity option for iPad and iPhone – and Wi-Fi would be the secondary option, providing connectivity to other devices in the home.
Apple’s use of femtocell technology is a disruptive move that would go against operator interest. It could sell Airport Express independently as well as through the operators. A femto-integrated Airport Express would need a SIM that would help decouple the femtocell from the operator. The big difference would be Apple tying the femtocell into its other software and hardware products. Then, the femtocell’s functionality would become the mainstay rather than the box itself, which avoids the issue of end users hesitating to pay for the femto.
This move does have its regulatory issues and does imply that Apple could become a “base station” supplier. Even so, I think that if Apple adopted femtocell technology and integrate it into its strategy and products, it would help the femtocell industry and break femtocells from their current shackles.
Aditya Kaul, Practice Director, Mobile Networks