Femtocells are one of those products that, at least conceptually, look to have disruptive traits. The idea of putting a mini ‘cell tower’ in individual homes and businesses, greatly boosting indoor wireless coverage, certainly could be seen as accelerating ‘cord cutting’ behavior – perhaps in a game changing way. But not so fast.
ABI Research is cutting its forecast on femtocell shipments. ABI now says 55% fewer, from 790,000 units to 350,000 units, will ship in 2009. They also expect 2010 to slowdown. “We expect that deployments in 2010 will pick up but will be slower than expected – our data suggests about a 40% reduction on previous estimates.” Hardly a hyper accelerating trend.
Are consumers rejecting the femtocell proposition of paying for a device to improve coverage and features for a service that maybe they should be getting anyway, as a part of their monthly subscription fee? Femtocells aren’t cheap – they range from $150 to over $200.
I suspect if you just paid $200 for your new whiz bang smartphone, you don’t expect to pay another $150 to get better coverage in your home. By the way, that same smartphone is probably Wi-Fi enabled, allowing customers to use their existing home networks for better data coverage anyway. Data services are driving wireless growth and usage, not voice.
Are femtocells dead? Hardly. But the model will probably have to change. Customers have spoken, and they’re not going to buy femtocells en masse at current cost levels.