Last week's announcement by Intel and Nokia that they will partner to offer embedded wireless internet connectivity in laptops has "upped the ante" for wireless laptops by embedding cellular modems in portable computers, analysts believe.

ABI Research said that the deal has also hit the share prices of competing wireless modem makers Novatel Wireless and Sierra Wireless.

The Nokia/Intel partnership to produce an embedded cellular mini-card modem will accelerate the market for cellular connectivity in notebooks, according to ABI Research senior analyst Philip Solis.

"Intel is also taking a first step towards the inclusion of WiMax wireless broadband in portable computers. The eventual goal is to offer multiple connectivity options," he said.

Cellular modems for laptops come in two form-factors: PC cards, and embedded modems such as the ones Intel and Nokia plan to offer.

While PC cards will continue to be sold on an aftermarket basis for some time, particularly for new air interfaces, ABI predicts that the real future of the market will lie with embedded modems which will make up nearly 17 per cent of the total this year.

Falling prices and increasing shipments mean that expected 2006 revenues of $1bn from cellular PC cards and embedded modems in laptops will increase to nearly $3bn in 2010.