Watch for exponential growth, changing business model for mobile devices

How often do you hear about a 55-fold growth in a single industry?

According to a study by ABI Research, the market for broadband-enabled consumer devices - which range from smart phones and readers to GPS and mobile gaming systems - is expected to grow by a factor of 55 over the next five years.

As mobile broadband becomes more available, many of today's WiFi devices will adjust to access the increasing number of connectivity options.

But even more importantly than device upgrades is the changing business model for data.

"When you embed a cellular or mobile broadband modem in a device, it becomes tied to a particular operator's service billing," says ABI Senior Analyst Jeff Orr, "That changes the device vendors' business model dramatically."

In the study, Orr found that consumers are most comfortable with a model where the connection fee is built into the price of the device, which is the case with eBook readers like the Kindle. However, with other services, the model won't be that simple.

"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?" Orr wrote, "That very unfamiliar service aspect is scary for the device vendors."

Still, the expectation of incredible growth is promising for the future mobile broadband - hopefully, the pricing structure will keep the consumers' interests at heart.

Study: Broadband-Enabled Devices to Grow 55-Fold by 2014 (Industry Week)