Social Networking Participation Still Growing

Online social networking participation is still growing. eMarketer estimates that in 2008 nearly 80 million people, 41 percent of the U.S. Internet user population, visited social network sites at least once a month, an 11 percent increase from 2007.

By 2013, an estimated 52 percent of Internet users will be regular social network visitors.

"The steady stream of social network updates and news is now a weekly -- or even daily -- habit for many online users," says Debra Aho Williamson, eMarketer senior analyst. "That stickiness is good news for social networks."

Good news, because social networks have yet to develop viable revenue models. But, there is still time.

"Social network usage is not tapering off -- it is still growing," Ms. Williamson says. "Not only are more consumers joining social networks, but their level of involvement is deepening."

eMarketer projects that 79.7 million people, 40 percent of U.S. Internet users, will create content on social networks at least once a month in 2009, either by updating a profile or communicating publicly.

That activity represents 90.5 percent of social network users -- and a lot of ongoing engagement with social networking sites. "More users are more involved with social networking now than ever before," says Ms. Williamson.

Record Global Growth for Cable Broadband

The cable broadband market posted a record year at $1.2 billion in worldwide revenue as the long-term DOCSIS 3.0 strategy trumped short-term economic concerns.

With telcos spending ever more capital on deep fiber rollouts, cable operators aren't about to roll over and sacrifice the tremendous gains they've made in broadband and telephony subscribers.

Infonetics Research believes operators are going to take as much of a break as they can in 2009 to both digest all the downstream capacity they deployed in 2008, and also to be more strategic with their DOCSIS 3.0-related rollouts.

Highlights of an Infonetics study include:

- 2008 was a banner year for the cable broadband hardware market, worldwide revenue for which jumped 35 percent from the previous year to $1.2 billion, led by aggressive deployments of CMTS downstream ports to support channel bonding.

- For the quarter, the combined CMTS and universal edge QAM (UEQ) markets increased just 3 percent in 4Q08 to $275 million, on the heels of a 28 percent decrease in 3Q08.

- The economic uncertainty and decrease in housing starts in the U.S. contributed to the flat quarter, but will have more of an impact throughout 2009 as cable operators pull back on downstream port roll-outs until subscribers are ready to spend again and upgrade their broadband services.

Worldwide PMP-MP3 Player Market Slows

The growth rate of the once rapidly expanding Personal Media Player (PMP) or MP3 player market will slow considerably over the next five years, accord to a market study by In-Stat.

Now In-Stat estimates that the growth rate has dipped below 10 percent at the end of 2008 for the first time since the market's inception.

"Market maturity, a weak economy, and competition from other multimedia handheld devices -- primarily mobile phones -- are contributing to the slowdown in the global PMP/MP3 player market," says Stephanie Ethier, In-Stat analyst.

While consumers are starting to demand features, such as Wi-Fi on their devices, such enhanced functionality will not be enough to re-energize the historical shipment growth.

In-Stat's market study found the following:

- Worldwide PMP/MP3 player shipments will grow to 245 million units in 2012.

- By 2012, 21 percent of global PMP/MP3 player shipments will be Wi-Fi-enabled.

- Market revenue for PMP/MP3 players peaked in 2008 at $21.6 billion and will decline annually through 2012.

More U.S. Businesses Opt for Voice Over IP

The struggling global economy will slow the growth of Voice over IP (VoIP), but deployments remain wide-ranging at mitigated levels, according to a new market study by In-Stat.

Slightly more than one in three U.S. businesses that have deployed VoIP use it exclusively. Many more businesses use VoIP as a partial voice solution. American businesses are also beginning to embrace voice-enabled IM capabilities, particularly among younger workers.

"IP continues to be a partial voice solution for most businesses with VoIP, particularly among larger businesses," says David Lemelin, In-Stat analyst. "Therefore, there is significant room for growth even among businesses that have already adopted it."

The research, "2008 U.S. Business VoIP Overview: Stick to Fundamentals," covers the U.S. business market for VoIP. The report analyzes and provides detailed end-user survey data by size of business.

In-Stat's market study found the following:

- 32 percent of Enterprise size businesses say the economic situation has slowed their VoIP deployment plans.

- Broadband IP Telephony remains the most common carrier-based business VoIP solution with revenues exceeding $1.1 billion in 2008, compared to $857 million for hosted IP Centrex service within the U.S.

- Adoption varies significantly by size of business, with Enterprise businesses preferring a partial deployment, while SOHO businesses are more likely to go IP-only.

- 13 percent of U.S. businesses use both carrier-based and premises-based IP solutions.

Wireless Cellular Modems Global Upside

Shipment of the wireless cellular modems used to connect laptops and netbooks to the Internet indicate that more than 35 million of the devices reached the market in 2008.

Of that total, the majority were the external USB modems that mobile operators have been pushing for some time. Continued growth has been bolstered as mobile operators have bundled USB modems with netbooks in subsidized price plans.

A further 3.5 million were embedded modems, built into the computers. According to ABI Research principal analyst Philip Solis, "After years of slow growth, the embedded cellular modem market is starting to show signs of life, increasing volumes and exceeding expectations."

ABI Research expects that, building on a good showing of 3.5 million units in 2008, shipments of embedded modems will more than double in 2009.

Qualcomm and Ericsson have been targeting the embedded modem market directly, positioning their products very competitively against each other. Operators, especially in Western Europe, are subsidizing USB modems and offering premium data plans that include free netbook or laptop PCs equipped with embedded modems.

Solis warns that despite the positive picture for embedded modems, the global recession will inevitably have an impact on the market.

In light of the prevailing economic conditions and the resulting slowdown in laptop shipments, ABI Research has lowered its overall forecasts for the cellular modem market for 2009.

However, shipment rates will continue to grow, albeit at a slower place, because this is an under-penetrated market and because of subsidies and other incentives offered by mobile network operators.

Europeans Connecting via Social Networking

ComScore released the results of a market study exploring social networking site usage in Europe, with a particular focus on France, based on data from the comScore World Metrix audience measurement service.

The study showed that 22 million French Internet users visited at least one social networking site in December 2008, reaching 64 percent of the total French Internet audience.

Of the 282.7 million European Internet users age 15 and older who went online via a home or work computer in December 2008, 211 million visited a social networking site -- representing a penetration of 74.6 percent.

Of the 16 individual European countries included in the study, social networking reach was relatively low in France, at 63.9 percent, compared with 79.8 percent in the U.K. or 73.7 percent in Spain.

Despite its relatively low penetration, France's social networking audience (21.7 million visitors in December) was the third largest in Europe behind the U.K. (29.3 million visitors) and Germany (24.9 million visitors).

More than 21.7 million French Internet users visited a social networking site in December 2008, up 45 percent versus the previous year. Facebook.com ranked as the most popular social networking site with 12 million visitors, growing 443 percent over the course of the past year after launching a French language user interface in February.

Skyrock ranked second with 11 million visitors (up 8 percent), followed by another French site, L'internaute Copains d'Avant, which enjoyed impressive 112 percent growth throughout the year to reach 5.8 million visitors in December. MySpace Sites (3 million visitors) and Flickr.com (1.8 million visitors) rounded out the top five.

IP Media Phone Opportunity is Over $7 Billion

The evolution of the IP media phone product segment is just beginning. Nevertheless, the device has the potential to become the forth screen in the home, as well as potentially become a next generation business IP phone.

Service providers and IP phone manufacturers are introducing media phones to add value to traditional voice telephones and enable IP-based services.

Devices, such as the Verizon Hub and AT&T HomeManager, support both IP communications as well as delivery of Internet information and multimedia content.

In-Stat is offering a free copy of their new media phone market research report, entitled The Media Phone Has Arrived."

In-Stat's market study found the following:

- Consumer media phones will generate between $4-$8 billion in annual revenue, worldwide, by 2013.

- Business media phones will generate $3.3 billion in annual revenue, worldwide, in 2013.

- The U.S. market will open up in 2009, with Europe coming on line in 2010.

The research report examines both the consumer and business markets. It covers product requirements, as well as critical commercial policy issues, and includes:

- Five-year unit and revenue forecasts for North America, Europe, Asia and RoW.
- Review of commercially available consumer media phone devices.
- Primary research survey of U.S. consumer broadband households.
- Opinions of IP-PBX and IP phone equipment suppliers.
- Opinions of wireline and cable service providers.

Video Music Soundtracks on a Small Budget

Creating a video composition with a music soundtrack has its challenges. Using commercially published music is often the most troublesome approach, due to copyright limitations and licensing requirements.

Besides, there are several alternatives for videographers that produce content -- even those on a small budget.

Some non-linear video editing software packages include a few sample music tracks -- often referred to as license-free or royalty-free music. There are a variety of online sources that sell stock music, which is also royalty-free. And, there are a few sources that offer songs with creative commons music licenses that you can use at no cost, providing you give attribution to the creator.

However, all those options require that the music still must be customized to fit your specific needs, and trimmed to the exact durations of each segment within your video.

Instead, there's fully automated soundtrack creation software that enables customizing the score by actually adjusting the mix and mood of the soundtrack elements. But, when you add-in the total cost of required sound library discs, this solution can get expensive quickly.

Yet another option is affordable semi-automated musical scoring software that can create a consistent thematic audio experience across an entire video project. These flexible tools offer an assortment of music resources that can be customized to suit the demands of any project -- with no experience in music composition or recording studio engineering required.

As an example, MAGIX Music Maker is part of a new generation of multimedia software. Lots of professionally produced sound samples are supplied with the application. In the Arranger, samples can simply be dragged onto the track, looped, and enhanced with digital audio effects.

There are various synthesizer plug-ins for creating your own sounds. Audio CDs and MP3s can be integrated, re-mixed, or used as sample sound material. All multimedia formats can be combined with one another in several variations on a multi-track dashboard interface.

In case your sounds and samples requirements are still not met, you can download additional Soundpools or purchase DVD collections.

I have experimented with this software to create some MP3 Music Samples -- as you'll hear, the video soundtrack application potential is limited only by your own imagination.

Truly, MAGIX Music Maker is equally designed for the novice user -- with features such as the 1-click song maker to quickly and easily create a complete song -- plus a multitude of advanced capabilities to satisfy the creative experimentation needs of more experienced composers.

I particularly recommend this amazing software for budding prosumers, and small business owners who create short videos for digital signage. I encourage you to view their online video demos for more insights on how you can apply this tool in your own multimedia creations.

Social Media Marketing is Not for Luddites

Who is the top social median within this market segment, and how can this person influence others? This question will be asked more frequently during 2009, as social media marketing moves further into the mainstream.

User-generated content (UGC) -- also known as consumer-generated media (CGM) -- is part of the online experience of millions of U.S. Internet users. From entertainment to communications to e-commerce, consumers are taking charge of the creation, distribution and consumption of digital content. And, apparently, it's growing like wildfire.

Tipping Point, Groundswell, Whatever...
Up from 83 million in 2008, eMarketer estimates the number of UGC creators will grow to 115 million in 2013. Even more important, rising from 116 million in 2008, in 2013 the number of U.S. Internet users consuming some form of UGC will reach 155 million.

For the prosumer stakeholders of the social media marketplace, UGC creates opportunities that were inconceivable 10 years ago, when self-expression consisted of letters to the editor, town hall meetings and call-in shows.

Today, whenever people get fired up about anything, they take to the Web -- to create, read, listen to or view what other people have to say.

"Unfortunately, if things stay as they are, this frenzy of content generation and attention is not likely to produce commensurate rewards for traditional marketers or site publishers," says Paul Verna, eMarketer senior analyst.

The prevailing wisdom used to be that user-generated content would attract advertising volume commensurate with its audience. But, times have changed, and so have the expectations.

"The pinnacle of giddy optimism was Google's November 2006 purchase of YouTube for a jaw-dropping $1.65 billion," Verna says.

Several factors have dampened expectations:

- The inherent unpredictability of UGC and the risks it represents for legacy marketers.

- The absence of advertising standards for UGC and the difficulty in measuring ad effectiveness.

- The expansion of major UGC sites, led by YouTube, into licensed professional media and the resulting flow of dollars toward this newer type of content, which is considered "safer" by legacy advertisers.

- The global recession, which has led many analysts and research firms, including eMarketer, to reduce online ad spending forecasts, even in areas that directly affect estimates of UGC ad spending, such as online video and social networking.

"As these realities set in, content owners, marketers, site publishers, entrepreneurs and everyday opportunists are realizing that there is no easy road to riches in user-generated content," Verna concludes. "Even finding lucrative niches will require patience, risk-taking, creativity and a long-term commitment."

Swan Song for Mass Media Luddism
Of course, at the same time revenue models elude UGC sites, they are still pulling attention away from traditional big media, such as newspapers, magazines, television and radio -- and putting increased financial pressure on them at a time when they can least afford it.

That said, in my opinion, this is all good news. Yes, social media marketing requires thoughtful participation, meaningful commentary, an ongoing investment and the persistence to stay engaged in online communities of interest for the long-term.

Granted, if you're a traditional lazy marketing or PR practitioner, then this clearly isn't your gig. Sing your final death-hymn, and move on, please.

Managed Security Services are for SMBs

Sometime late this year, the estimated number of mobile small-medium businesses (SMBs) in the world who use smartphones when travelling will pass 200 million. In some regions, 99 percent of all businesses are classed as small-medium.

According to a new market study from ABI Research, this SMB market, which has not adopted 802.11 network solutions to a great degree, provides a golden opportunity for Wi-Fi vendors of both equipment and associated services.

"Despite the present economic downturn, this is a growing market," says vice president Stan Schatt. "But SMBs have very particular needs and characteristics, and vendors wishing to serve this market need to pay close attention to them."

Unlike large enterprises, small businesses tend to buy equipment out of current operating cash flow, not capital funds. This could be very important in the current economic doldrums. Where profits dwindle, so does the opportunity. Vendors must be creative in addressing this hurdle.

Part of the solution is finding the right sales channel to reach these customers. Says Schatt, "Many small business owners are not tech-savvy and will favor a sales environment that provides customer education and support."

Managers of SMBs are also particular about choosing equipment designed for their specific needs. They don't want a shrunken version of a system intended for a large enterprise.

ABI says that some vendors learned this during their first foray into this market, and has now re-addressed the demand with products designed from the start for the SMB.

SMB owners are emphatic about the need for physical security but are less knowledgeable about online security threats. Their lack of security expertise means they are a greater opportunity for managed security service providers.

Increased Role for Wi-Fi in the Digital Home

Wi-Fi's existing large installed base in mobile PCs and home networks means that it is likely to be a primary connectivity solution for new consumer electronics (CE) devices, according to the latest market study by In-Stat.

Attach rates for Wi-Fi among game consoles are already approaching 80 percent. In-Stat expects DTV to be another high volume driver, reaching nearly 21 million units shipped with Wi-Fi by 2012.

While growth rates and penetration of Wi-Fi in the living room is growing, Wi-Fi is still dominated by the huge volume of mobile Wi-Fi devices.

Beyond the already established notebook PC segment, Portable Media Players shipped with Wi-Fi will grow to well over 100 million units in 2011 and cellular/Wi-Fi handsets will pass 300 million units by 2012.

"Finalization of IEEE 802.11n will remedy some of the technical issues that constrained Wi-Fi adoption in video-centric CE devices," says Victoria Fodale, In-Stat analyst. "We expect the adoption of Wi-Fi in the living room to accelerate. However, mobile device shipments will still outnumber stationary CE devices by nearly ten to one."

In-Stat market study found the following:

- By 2012, shipments of CE devices with Wi-Fi are expected to reach more than 938 million.

- There were over 87 million wireless networks in the home in 2007.

- Residential gateways are expected to show the strongest growth among Wi-Fi home aggregator devices, which include SOHO/home routers, residential gateways, and standalone access points (APs).

Residential Broadband Intelligent Gateways

Just a few years ago, broadband service providers drew a very clear line defining their responsibility once they connected a residence to their communication network. Typically, they refused to support the in-home network, especially the electronic devices that consumers use.

However, this trend has since changed in the face of fierce competition and in a market where people are looking to connect multiple devices to their home network for rich media distribution around the home.

A recent ABI Research study focused on the residential broadband market forecasts intelligent broadband gateways to produce double-digit annual growth results over the six-year forecast period ending in 2013.

ABI Research industry analyst Serene Fong notes that, "Intelligent broadband gateways will gain popularity and account for more than 40 percent of home networking CPE shipments by 2012."

Basic equipment with limited intelligence and management capabilities currently dominates more than half of the market, but it will soon be phased out as full-fledged intelligent multimedia boxes with high throughput take over.

Broadband households have a much higher propensity to adopt home networks, and the number of households with data networking and gateway solutions will continue to grow. However, a key hurdle that gateway vendors must actively seek to overcome in its development is price.

Home gateways generally cost more upfront compared to available alternatives, which puts them at an obvious disadvantage in any price-sensitive market. Additionally, gateway equipment is usually purchased separately or as a hardware upgrade.

Nevertheless, if it is of any consolation to vendors, future gateway solution deployments are expected to be catalyzed largely by service providers.

Market Upside for Voice-Centric IP Phones

The Internet Protocol (IP) phone market is actually a tale of two drastically different markets -- business and consumer -- with the former thriving and the latter diverging in a drastically different direction, according to the latest study by In-Stat.

By 2012, 31 million voice-centric business IP phones will ship. However, the consumer side of the market is radically different. Among voice-centric IP phones, businesses will outpace consumers more than ten to one.

The nascent consumer market for voice-centric IP phones is being subjugated by the introduction of IP media phones, such as the Verizon Hub and AT&T HomeManager that support both IP communications, as well as delivery of Internet information and multimedia content.

IP-based communication is replacing TDM networks at a steady pace in the workplace, but adoption is slow among consumers. Even where Voice over IP (VoIP) is being used in the home, many consumers don't realize it because IP-based cable voice services are marketed as traditional PSTN voice offerings, supported by traditional analog telephones.

"Within the business market, corded IP phones remain the standard, and will continue to dominate the enterprise IP phone market through 2012," says Norm Bogen, In-Stat analyst. "However, WLAN and IP DECT phones continue to grow, especially within some specific vertical and geographical markets."

In-Stat's market study found the following:

- Cisco, Avaya, and Nortel are leading the market for enterprise IP phones.

- Wi-Fi integration in cellular phones is growing rapidly; however, the majority of Wi-Fi/cellular phones are not designed for VoIP.

- Uniden holds top market share for consumer IP corded phones.

Digital Multimedia Adoption Beyond HDTV

It wasn't long ago that finding a notebook PC with a FireWire port (IEEE 1394) was quite rare. Clearly, it's now a standard interface. Adoption of high-definition digital multimedia continues to drive the need for increasingly faster data transfer options between consumer electronics devices.

As adoption of HDMI (High-Definition Multimedia Interface) ports approaches 100 percent in digital televisions, the interface is now moving into TV set-top boxes, DVD equipment and mobile PCs, according to the latest market study by In-Stat.

Overall, HDMI-enabled product shipments will increase at an annual rate of 23 percent between 2007 and 2012.

In the near future, portable electronic devices, such as digital camcorders, digital still cameras, and portable media players (PMPs) will be among the emerging device categories to watch.

"The rapid escalation of HDMI in standard-definition and Blue laser DVD players and recorders is directly related to HDMI's success in HDTVs," says Brian O'Rourke, In-Stat analyst.

Digital visual interface (DVI) and HDMI, are related, high-bandwidth, unidirectional, uncompressed digital interface standards.

In-Stat's market study found the following:

- HDMI adoption in mobile computers is estimated at nearly a quarter of all systems shipped in 2008.

- IPTV set top boxes will see the highest adoption among pay TV set top boxes, growing to 85 percent penetration and 17.6 million boxes by 2012.

- HDMI penetration in portable media players will approach 10 percent by 2012.

- Rising adoption of HDMI and DisplayPort interfaces will negatively impact DVI adoption. DVI-enabled product shipments will decline at an annual rate of 30 percent through 2012.

Will Americans Adopt Mobile TV in 2009?

The upcoming switchover to all-digital television broadcasting in the U.S. and other major countries will create an unprecedented opportunity for mobile TV services, according to a new market study by ABI Research.

While mobile broadcast TV was pioneered in Japan and South Korea, following the switchover traditional and mobile TV broadcasters and cellular operators in many regions will launch mobile TV services that are forecast to attract over 500 million viewers by 2013.

There's an important distinction to draw between content streamed to mobile handsets over cellular networks, and free-to-air broadcasting to mobile devices equipped with mobile TV tuners.

"Mobile TV users have yet to value the medium properly because it has not been validated as an independent product and service," says senior analyst Jeff Orr. "It has been primarily offered at the end of a long list of more preferred cellular services. However, Mobile TV will soon be positioned in a more proper role as an extension of traditional broadcast TV services."

Mobile TV viewing will not solely be on cellular handsets, but also on MIDs, and automotive infotainment systems. Once the content is available and the services launched, mobile TV will enable more classes of mobile devices that are natural fits for mobile entertainment.

Who will benefit? Content developers and providers; device vendors, especially MID and cellular handset OEMs; and service providers.

Other winners: multimedia and security software, semiconductor and network infrastructure vendors. Once mobile TV users adopt the service at high growth levels, advertisers will also climb on board to target the significant number of new mobile viewers.

ABI Research believes the timing of the market's emergence is good. As 2009 progresses, signs of economic optimism may emerge, and allow the fledgling industry to establish a foothold before the holiday shopping season.

Europe has Highest Mobile Service Adoption

Europe as a region has the highest adoption of mobile services at 121 percent penetration and this is expected to rise to 135 percent by 2012. At these high penetrations, overall service revenue growth through the handset is expected to decline.

However, ARPU is expected to continue growing among business users. According to a new market study by ABI Research, overall business revenue is forecast to grow at a compound annual growth rate (CAGR) of over 4 percent, a significant statistic considering that ARPU from consumer mobile services will stay flat at a CAGR of 0.1 percent.

Says practice director Dan Shey, "Not surprisingly, data services are providing the ARPU uplift driven by the uptake of smartphones, and adoption and usage of mobile e-mail and Internet services."

However, the impact of these drivers as well as others is different for business customers in different occupational segments -- the end result is a unique set of subscriber and ARPU growth rates, penetration, and total revenue opportunity by occupation.

Shey adds, "In the current economic environment, focusing resources on the right business user segments is absolutely essential. Understanding the opportunities specific to each business sub-segment will not only allow mobile suppliers to stay solvent in 2009 but will also position them for growth in better times."

Online Video Upside Continues to Impress

Are we nearing the end of online video viewer growth? Apparently, the upside seems unstoppable -- even in the current world economy. As more data about 2008 Internet usage in the U.S. is released, online video increasingly looks like one of the year's big winners.

U.S. Internet users viewed 12.7 billion online videos during November 2008 alone, up more than one-third over November 2007, according to data released in January 2009 by comScore Video Metrix.

comScore said more than 146 million U.S. Internet users watched an average of 87 videos per viewer in November 2008 -- that's 77 percent of the total U.S. Internet audience.

eMarketer also puts online video viewers at more than three-quarters of U.S. Internet users, and estimates that percentage will rise to 88 percent by 2012. For savvy online marketers, this continued growth raises the question of how much online video can be monetized.

"Although many consumers are loath to sit through ads when watching online video, they seem even less willing to pay directly for content," said David Hallerman, senior analyst at eMarketer.

"As a result, content owners and publishers are focusing on ad-funded models. Except for movies, some premium TV fare and select sports content—which remain attached to transactional models -- most TV-oriented programming has migrated to advertising-based formats," Mr. Hallerman continued.

eMarketer estimates online video advertising spending will grow rapidly to reach $4.6 billion in 2013, up from $587 million in 2008.

Will Online Social Networks Migrate to TV?

Rapidly growing interest in social networking has resulted in many people looking beyond the computer and mobile screens to the living room, according to a new market study by ABI Research.

A survey of over 1000 households conducted by the firm shows that consumers are looking to extend their social networks to the TV, as 36 percent of those who currently use social media on a regular basis say they would like to access their networks on the TV screen.

"Just as video entertainment is moving fluidly across various screens, so is social media," says senior analyst Jason Blackwell.

"We've seen that consumers find increased value through shared entertainment experiences and want to explore and deepen these experiences through communities of interest -- and that's what social TV will ultimately do."

When asked which types of application they would be most interested in for social TV, the answers were somewhat dependent on age. Younger consumers were more interested in engaging with their friends through chat and messaging, while middle-aged respondents were more likely to be interested in more passive social networking behavior such as checking status updates.

The most popular potential application for those over 50 who expressed interest in TV social networking was being able to see what their friends were watching on TV.

"Today we already see tens of millions of consumers engaging in communities in the living room through online console gaming services," adds Blackwell.

"Just as this interest community has seen rapid growth in the past few years, we expect the extension of Web 2.0 technologies to the living room to propel growth in new communities of interest."

A Triple-Play Promise that Never Delivered

Recent spikes in online video consumption have created an opportunity for service providers to offer an integrated three-screen video service, according to the latest assessment by TDG.

Most U.S. broadband service providers are no doubt viewing this opportunity -- especially those with expansive infrastructure investments that need to be rationalized.

"This is the trifecta of video services," notes Michael Greeson, president and principal analyst at TDG.

"Though very few have the assets and acumen to pull it off, rest assured every major cable, satellite, and mobile operator is actively pursuing a three-screen strategy. As our new research suggests, they'd be crazy not to."

As it stands today, people who want to watch TV programming and other video on their TVs, PCs, and mobile devices end up signing contracts with three different providers, receiving three different packages of content, and paying three different fees.

At some point, notes Greeson, services provider might integrate or bundle these disparate services into a single offering with one price, one point of customer contact, and one integrated electronic program guide.

However, in my opinion, the opportunity for a triple-play bonanza has come and gone from the expectations of service providers. In reality, most customers who bought the bundle "promise" typically received little more than a consolidated monthly bill.

TDG's recent study concludes:

- Approximately one-fourth of adult broadband users in the U.S. -- approximately 35 million -- are somewhat likely to sign up for a three-screen video service at a price between $65 and $105 per month.

- More than half of Three-Screen Intenders are between the ages of 25 and 44, though Intenders between the ages of 18 and 24 are significantly more enthusiastic.

- A sizable (undefined) portion of Early Mainstream consumers are poised to embrace a three-screen video offering, not just Early Adopters.

- Three-Screen Intenders are 21 percent more likely than Non-Intenders to use a game console, twice as likely to use an iPhone, and twice as likely to have a TV connected to their home network.

- 92 percent of Intenders view online video on a weekly basis, compared with 78 percent of Non-Intenders.

- Cable operators are preferred as a three-screen provider almost two-to-one over satellite TV providers.

- Real-time weather, news, and sports programming (both local and national) are among the content types most favored for a three-screen video service.

Bleak Forecast for Mobile Phone Carriers

After 25 years of consistent market growth, the mobile phone business now faces huge challenges this year from a bad global economy and a lack of meaningful new service features, according to the latest market study by In-Stat.

The bleak cell phone industry outlook is unprecedented, with dramatic ramifications for device manufacturers, semiconductor manufacturers, infrastructure system vendors and mobile operators alike.

"While the cell phone industry has generally been unaffected by economic ups and downs, the near future is different," says Allen Nogee, In-Stat analyst.

The current economic slowdown is more widespread and deeper than ever experienced during the cellphone's lifetime, and has spread through Europe, Asia, and North America.

In addition, this is the first year without any new major features being added, and last year's new feature, mobile TV, has had very limited success. You may recall the mobile TV anticlimactic results from last year, and the numerous studies that profiled a consistent lack of consumer interest in the service.

In-Stat market study found the following:

- Over 1.2 billon cell phones were estimated to have shipped in 2008, but the growth rate is plummeting.

- For the next five years, cell phone semiconductor revenue will only grow at a 3.3 percent Compound Annual Growth Rate (CAGR).

- Shipments of dual-mode cellular/Wi-Fi phones shipped will quadruple from 2008 to 2012.

- The market for digital baseband semiconductors in WCDMA handsets will reach more than $6 billion annually in 2012.

- In 2008, cell phone semiconductor revenue was expected to reach more than $44.5 billion, up over 6.2 percent over 2007.

Network as the Platform for Economic Power

Do you find yourself online more often? Well, you're not alone. Americans are spending more time online, on both a daily and weekly basis. Home Internet access far outstripped work access time in 2008, according to the latest market study by Harris Interactive.

Both trends could continue in 2009, as America's growing pool of unemployed people use the Internet to search for new jobs, financial aid and 21st century skills training opportunities.

However, Americans are not the trailblazers in usage. That distinction goes to Internet users in China, who invested 44 percent of their leisure time on the Internet in 2008, according to TNS Global.

Americans now rank fifth worldwide, with 30 percent of their leisure time spent online -- virtually tied with Italy (31 percent), Spain and Australia (29 percent each).

The U.S. could potentially move up in the world rankings in coming years, especially if the Obama administration is successful in reversing the declining status of American network infrastructure within the Global Networked Economy.

Since 2001, the average amount of time U.S. adults spent online per week doubled, from 7 hours to 14 hours. Harris Interactive annual telephone poll revealed that average Internet hours grew slowly between 2001 and 2006, but took off in 2007 and increased even more rapidly in 2008.

At-home usage saw a more dramatic surge during that time, according to the USC Annenberg School "Center for the Digital Future." Their yearly survey found that U.S. Internet users spent an average of 15.3 hours per week online in 2007, compared with about 9 hours the year before.

There's reason to be hopeful that the $6 to $9 billion funding for broadband in the stimulus package proposal is a good starting point, or appropriate down payment, on the long-term investment strategy that the U.S. must undertake -- in order to achieve real progress that will turn the tide on economic competitiveness.

It's somewhat ironic that the largest communist legacy nation in the world has surpassed the world's most recognized democratic nation. Clearly, forward-looking public policy can deliver powerful results in the Global Networked Economy -- regardless of the political ideology of a country's leadership.

Decline in Network Infrastructure Equipment

Dell'Oro Group announced that it forecasts the combined worldwide sales for access network infrastructure equipment including Cable, DSL and PON access concentrators will decrease almost 15 percent in 2009 to $4.0 billion.

Their latest market study indicates that this decrease is primarily due to declining subscriber additions and a weak global economy that will slow operator access network upgrade plans.

The report forecasts access concentrator shipment growth for Cable, PON, and VDSL in 2010 and to continue each year through 2013, the duration of the forecast period.

Meanwhile, the trend towards higher-speed networks is expected to result in sharp yearly declines in revenue for slower-speed ADSL infrastructure equipment.

"The weakening global economic situation has caused us to lower our forecast for most segments relative to our July 2008 forecast," said Tam Dell'Oro, Founder of Dell'Oro Group.

"This is especially true for 2009, but there are also implications throughout our forecast horizon even though an economic recovery is expected by 2010. We believe that operators will not change their network upgrade strategies, although we expect them to be more cautious with expenditures which likely result in slower, success-based deployments, added Dell'Oro.

Home Networks Gain Digital Media Devices

Few home network users currently have permanent connections between their Consumer electronics (CE) devices and their home networks. Those that do primarily connect their game console, according to the latest market study by In-Stat.

As more connected CE devices become available, In-Stat expects Blue-ray DVD players and recorders will lead network new digital media client growth.

"The primary reasons that more devices are not connected to home networks are -- consumer awareness/knowledge, availability of network-capable CE products on retail shelves, prices of network-capable CE products, competition with non-network-capable CE products (like docking stations), and lack of perceived need by some consumers," says Joyce Putscher, In-Stat analyst.

In-Stat's market study found the following:

- Almost 43 percent of the Windows PCs used in North American homes in June 2008 had Media Center functionality, up from 32 percent in 2007.

- The worldwide media server-capable device market is estimated at $50 billion in 2008.

- In-Stat's consumer survey reveals that 64 percent of U.S. respondents are somewhat, very or extremely interested in watching Internet-based streaming video on their household TV.

- A proliferating set of competitors are offering a range of Digital Media Adapter/Player/Receiver (DMA/DMP/DMR) devices, including Apple, Cisco, Denon, Hewlett-Packard, Roku, Samsung, and many others.

Software as a Service Finds New Demand

According to IDC, the harsh economic climate will actually accelerate the growth prospects for the Software as a Service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications.

Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams. As such, IDC has increased its SaaS growth projection for 2009 from 36 percent growth to 40.5 percent growth over 2008.

"With a broad slowdown across IT sectors, businesses are increasingly bearish about their short-term ability to invest, whether for stability, growth, or cost savings down the road," said Robert Mahowald, director, On-Demand and SaaS research at IDC.

"But SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times, and several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets."

IDC market study findings include:

- By the end of 2009, 76 percent of U.S. organizations will use at least one SaaS-delivered application for business use.

- The percentage of U.S. firms which plan to spend at least 25 percent of their IT budgets on SaaS applications will increase from 23 percent in 2008 to nearly 45 percent in 2010.

- This market's growth prospects will accelerate the shift to SaaS for the whole value chain as the promise of a recurring revenue stream, and the opportunity to tap OPEX and project-related dollars, will benefit the whole SaaS ecosystem.

- While demand for SaaS is strongest in North America, new contracts from customers in Europe, Middle East, Africa (EMEA) and Asia-Pacific (excluding Japan) also look particularly positive, and IDC expects that by year-end 2009, nearly 35 percent of worldwide revenue will be earned outside of the U.S.

- On the downside, IDC interviews with SaaS providers highlighted several issues, such as cash-flow shortfalls related to slow-paying current clients, liquidity challenges stemming from tight credit at lenders, and -- on the horizon -- limited resources to scale up with expanded infrastructure to support new customers and new service offerings.

Netbook PCs Popular as the Second Device

In November 2008 ABI Research carried out a survey of more than 1000 adult consumers in the United States, aimed at identifying their attitudes to netbook computers and mobile Internet devices (MIDs).

The results are summarized in a Research Brief that provides critical insights into consumer perceptions of these products.

Among many other results, the research found that only 11 percent would use a netbook as their primary computer, while a massive 79 percent view netbooks as a secondary device to be used in addition to a laptop or desktop computer.

Netbooks are smaller, so they're not as easy to use or as powerful as a PC or a laptop, and generally don't include built-in CD or DVD drives. However, the flip side is that the smaller size and weight of netbooks makes them much easier to tote around the home or on-the-go.

According to ABI principal analyst Philip Solis, "While their low price does cause some consumers to view netbooks as a replacement for a laptop given the current economic conditions, the majority view a netbook as being a secondary device."

Even as a device that is secondary to the PC, this has to cut into the laptop market somewhat. When considering another laptop as an additional device mostly for browsing the web and using other Internet-based communications applications, consumers will find netbooks to be an appropriate alternative.

Home Security Providers Under an Attack

Home security monitoring revenues are still the financial bedrock of the U.S. residential security industry, constituting 75 percent of all revenue, according to a new market study.

This new report from Parks Associates finds the number of monitored security households intending to cancel their service is only 4-8 percent higher than normal due to the economic downturn. The report also warns that the resilience of this service category will attract new competitors.

"Traditional security providers must anticipate communications and entertainment service providers will introduce their own home monitoring systems," said Tricia Parks, CEO, Parks Associates.

"There have already been announcements in Canada and Europe for home monitoring using security as a primary application. It is reasonable to presume service providers will do the same in the U.S. market"

Parks reports the number of monitoring service subscribers will not increase as quickly now as in past years due to the drop in new starts and the lower number of households moving into new residences.

However, the current base of customers shows a predilection to keep their monitoring services and may even tolerate a small fee increase.

"A slight rise in monthly fees, such as from $25 to $26.95, will not cause current subscribers to abandon their services," Parks said.

Security providers can use a minor fee increase to offset immediate losses due to slower market growth and increased competition. What is critical, nonetheless, is understanding the exact amount of increase that customers can bear.

More Turbulence Ahead for Mobile Operators

An Informa Telecoms & Media market study suggests that the ongoing financial crisis started to make an impact on the global mobile phone services sector during the second half of 2008.

Informa's view is that the slowdown in the growth of global mobile subscription numbers and the device market is likely to accelerate in 2009.

The world's mobile phone subscription market grew by 18.5 percent in 2008 -- down from 22.5 percent growth in 2007 -- and is set to increase by just 12.7 percent this year, although Informa does note that this reduction in growth is partly due to the effect of natural market development, particularly in Western Europe and USA.

Of more concern to the industry is the 7 percent fall estimated by Informa in the handset replacement market in 2008. Unsurprisingly, the world's developed markets will be hit especially hard with the total device market in Western Europe set to contract by 13 percent in 2009.

Informa estimates that it could take as long as three years for the mobile device market to get back to 2008 sales levels.

"The handset market is facing a difficult period with the average replacement cycle likely to increase by 6-8 months in 2009, which would result in a 5 percent decline in the number of total devices sold globally to 1.16 billion," explains senior forecasting analyst at Informa, Nidhir Maudgalya.

And things could get even worse than this, as depending on the extent of the deterioration of global macroeconomic conditions, the year-over-year fall in the number of total devices sold could double to 10 percent with replacement cycles increasing to up to 12 months.

Informa research suggests there is evidence of a strong regional divide on the impact of the economic downturn. New subscriptions in the emerging markets of Africa and South Asia continue to drive growth and the mobile device market should remain resilient, albeit with users buying basic and low feature handsets.

"India became the world's largest market in terms of net additions in 2008 for the first time with 102 million new mobile subscriptions over the 12-month period, ahead of China," notes Nick Jotischky, Principal Analyst for emerging markets at Informa.

But Jotischky does have a warning for those investors looking to escape the saturation of developed markets. India and other emerging markets have their own difficulties as mobile operators continue to work out how they can deliver profitability in the face of increasingly brutal competition.

Until now, mobile operators have not been substantially impacted by the deterioration of the economic environment and have shown impressive resilience. Contingency plans are being prepared for the year ahead with many operators preparing to lower cost bases and downsize their business.

Handset and network vendors will be affected more than mobile operators in the first instance as the number of consumers choosing not to upgrade devices will increase. This will place an indirect hit on network investments as growth in data usage is not as sustained as expected leading to less than expected pressure on networks and operators electing not to upgrade networks.

Netbook Computer Will Lead the New Growth

The time is right for netbook computers to succeed. According to analysts at ABI Research, a confluence of social and technological factors has created demand that will lead to a market explosion for netbooks over the next few years.

ABI forecasts worldwide shipments of nearly 35 million this year, rising to an estimated 139 million in 2013.

ABI Practice director Kevin Burden describes this evolution as "PDA's began our reliance on instant accessible data while traveling. When PDA functionality converged with cellular voice, smartphones became the new darling of mobile professional technology that many expected to evolve into the hub for all data and communication needs for travelling professionals."

Today, with a better understanding for what a smartphone is, is not, and may never be, along with a reality check on the usefulness of UMPCs, the market remains open for new device types.

Smartphones did a lot to raise our comfort level with mobile technology as well our expectations for how connected we could be and how accessible information and data should be while on the road.

Enter the netbook with its light-weight, medium-sized form factor and low-cost processors leading to moderate overall price points may finally have right-sized mobile technology for productive travels.

While the advent of low-cost, power stingy x86 and ARM processors were the technical keys to netbooks, Burden argues that industry and consumer expectations also needed to evolve before netbooks would meet market acceptance.

In recent years, the industry still expected the smartphones to be more than they turned out to be, and most recently, MIDs were thought to be the next big mobile devices segment, but an unclear usage model continues to confuse the market.

So today, the netbook time has come, and ABI expects them to enjoy very strong market growth.

Europeans Embracing Mobile Broadband

According to a market study by IDC, mobile broadband has grown rapidly in popularity among European consumers during the past 18 months. This uptake has been catalyzed by four main factors -- the upgrading of 3G networks with HSPA, the availability of small USB connection devices, a fall in the price of subscriptions, and a rise in consumer penetration of portable PCs.

"Mobile broadband presents a big opportunity, both now and for several years to come," said John Delaney, IDC's European director of consumer mobile research.

But although the service is simple in concept, its role in the consumer services market is complex. Mobility is only one among a variety of reasons why consumers like mobile broadband. Success in the market will depend critically on a clear understanding of how mobile broadband should be positioned in the spectrum of mobile and Internet services.

Mobile broadband is a new source of revenue for mobile operators and improves the use of 3G networks -- unlike other new mobile services such as TV and gaming, it relates directly to a telcos' core business.

"However, it also substitutes for fixed-line broadband in some circumstances, cannibalizing existing revenues," said Delaney. "As such, it is important for operators with both fixed and mobile networks to understand what factors are driving demand for mobile broadband, what is likely to happen to those factors over the next few years, and what strategies they should adopt to take maximum advantage of the opportunity."

Other findings in the IDC market study include:

- European operators sorely need new service revenues, and mobile broadband promises to satisfy that need by generating revenue that is new and entirely incremental to existing revenue streams.

- The combination of a strongly growing addressable market with prices at fixed-broadband levels, and in increasingly flexible packages, will ensure that consumer demand for mobile broadband remains strong for some time to come.

- The global recession, however, could slow down the penetration of portable PCs and therefore the addressable market for mobile broadband. It may also make consumers more reluctant to commit to a new service contract.

U.S. Hispanics Now More Savvy to Internet

Hispanics in the U.S. are not only online in overwhelming numbers, but they are taking advantage of all that the Internet has to offer. Previous notions of Hispanics not having access to the internet, or being unaware of its possibilities, have been dispelled.

Not only are U.S. Hispanics online, but they turn to the internet for a variety of reasons. According to a recent Ipsos U.S. market study, sixty-three percent of Hispanics say that they access the Internet at least once a month.

These wired Hispanics state that they are turning to the internet for both information and entertainment.

From following the days breaking news, downloading the latest musical hit, uploading photographs of family and friends, or even researching products before they make the final purchase decision -- Hispanics show that the internet is an important tool in their everyday life.

We live in an ever changing world -- and U.S. Hispanics are keeping up with these events and are turning to the internet to do so. While online, 84 percent of U.S. Hispanics said that they read the news at least once per month.

- Men (90 percent) are more likely than women (79 percent) to read the news while on the internet.

- Those under the age of 55 (85 percent) are more likely to read the news online than 55+ (72 percent).

- Virtually all Hispanics with a college degree (97 percent) read the news while online at least once per month.

Almost eighty percent (79 percent) of Hispanics are turning to the internet to research products and they are not just researching, they are buying. While online over half of U.S. Hispanics (53 percent) make a purchase at least once a month.

- U.S. Hispanics aged 35-54 are more likely to purchase products online (62 percent), while Hispanics aged 55+ are least likely (37 percent).

- Gender is not a determining factor as men (51 percent) and women (55 percent) are almost equally likely to make a purchase online.