USB cellular modems that allow connection of mobile computing devices to 3G networks are rapidly gaining popularity, new research reports.

ABI Research noted that several modem vendors have launched products into this "growing and increasingly competitive market" since the end of 2006.

A new study from the analyst firm forecasts shipments of these modems to exceed 22 million by 2012.

Dan Shey, principal ABI Research analyst, said: "Proliferation of 3G networks is the primary driver of growth of cellular modems regardless of form factor.

"However, new companies are jumping into the USB modem market because the installed base of devices for USB modems includes laptops and desktops.

"Desktop PCs are ubiquitous around the world and will continue shipping in large volumes, exceeding 140 million units per year through 2011."

In a market characterised by increasing competition, cellular modem shipments (including PC Cards and ExpressCards, USB modems, internal modems and 3G/Wi-Fi routers) will grow to over 68 million units by 2012, representing a compound annual growth rate of 53 per cent.

"There are two factors to watch which will affect the USB modem market. First, the newer companies entering this market are in the Asia-Pacific region, a territory with notoriously price-competitive companies," said Shey.

"Second, since the USB modem attaches externally to the computer, the device has no space or shape limitations.

"This fact will allow modem vendors to differentiate products based on body design and functional features, providing for interesting marketing opportunities."