Worldwide, mobile messaging is a $130 billion industry in 2008, and Portio Research forecasts show that value rising to reach $224 billion by the end of 2013.
SMS still totally dominates the messaging mix. Their research forecasts that even in 2013, messaging will still account for approximately 60 percent of all non-voice service revenues worldwide, and within that SMS will account for some 55 percent of all messaging revenues.
With mobile data revenues expected to account for between 25 and 30 percent of total operator service revenues worldwide by 2013, that means that messaging will account for approximately 17 percent of total operator service revenues by 2013.
SMS will be responsible for approximately 9 percent of total operator service revenues in 2013. Across the planet, everywhere from The Philippines to Croatia, SMS is booming, with forecasts predicting aggressive growth ahead for the next 6 years.
The Portio report looks in detail at the massive opportunities that lie ahead as worldwide mobile messaging markets continue to rise in value by a staggering $20 billion per year for the next 5 years.
Their market study uncovers the incredibly opportunities in the Asia Pacific region, and the rapid growth of messaging use in North America. Complete regional analysis for all regions make this the most comprehensive messaging report available.
Thursday, April 30, 2009
Wednesday, April 29, 2009
PC Shipments in EMEA Have Mixed Results
Following a slow down which started in the final quarter of 2008, Europe, Middle East and Africa (EMEA) PC shipments fell to negative trends in the first quarter of 2009 as anticipated.
In line with forecasts, the PC market in EMEA displayed its first yearly decline since the 2001 recession, with sales recording –10 percent year-on-year growth in 1Q09, according to data released by IDC.
The CEE region remained the most affected bringing down overall EMEA results with a decline in PC shipments of –41 percent, while MEA slowed down as well at –6.1 percent growth. Western Europe held well, however, with shipments decreasing by only –0.5 percent, supported by sustained consumer demand and continued traction for Mini Notebooks.
The business market is directly impacted by lower investment levels and consumer spending also slowed down since January, but the traction for Mini Notebooks helped to sustain consumer demand in Western Europe and contain overall market contraction, and will continue to do so over the coming quarters as vendors, retailers, and telco players will maintain a major push.
Continuing to suffer from a challenging financial situation, most countries in Central Eastern Europe displayed further contraction this quarter. Russia and Ukraine remained severely constrained and several other markets declined as well. Growth in the Middle East also decelerated, but to a much lesser extent thanks to sustained demand for portable PCs.
IDC expects the CEE region to remain strongly negative in the coming quarters, affected by the global economic downturn, which is impacting both commercial and consumer markets," said Stefania Lorenz, research director, Systems, IDC CEMA.
"Within the CEE region, just a few countries reported positive growth, with Czech Republic and Slovakia being the most dynamic. The desktop market in the MEA region reported the lowest drop ever while notebook sales were able to remain afloat, with strong growth for portable PCs in Africa in particular."
PC sales in Western Europe also slowed down, declining by a moderate –0.5 percent year on year, and slightly ahead of forecasts. Commercial sales were directly impacted by the economic downturn and declined by –14.8 percent, affecting both desktop and portable shipments.
However, the consumer market demonstrated some resilience, despite a slowdown in consumer spending as a result of fragile consumer confidence and rising unemployment.
In Western Europe, dynamics in the portable PC market continued to be driven by consumer demand, with Mini Notebooks contributing to an impressive 28 percent growth despite the overall economic slowdown.
The market clearly benefited from continued price declines overall, and retailers deployed aggressive deals and promotions, as cash-trapped customers were increasingly looking for a bargain and opted for low-priced entry-level systems.
In line with forecasts, the PC market in EMEA displayed its first yearly decline since the 2001 recession, with sales recording –10 percent year-on-year growth in 1Q09, according to data released by IDC.
The CEE region remained the most affected bringing down overall EMEA results with a decline in PC shipments of –41 percent, while MEA slowed down as well at –6.1 percent growth. Western Europe held well, however, with shipments decreasing by only –0.5 percent, supported by sustained consumer demand and continued traction for Mini Notebooks.
The business market is directly impacted by lower investment levels and consumer spending also slowed down since January, but the traction for Mini Notebooks helped to sustain consumer demand in Western Europe and contain overall market contraction, and will continue to do so over the coming quarters as vendors, retailers, and telco players will maintain a major push.
Continuing to suffer from a challenging financial situation, most countries in Central Eastern Europe displayed further contraction this quarter. Russia and Ukraine remained severely constrained and several other markets declined as well. Growth in the Middle East also decelerated, but to a much lesser extent thanks to sustained demand for portable PCs.
IDC expects the CEE region to remain strongly negative in the coming quarters, affected by the global economic downturn, which is impacting both commercial and consumer markets," said Stefania Lorenz, research director, Systems, IDC CEMA.
"Within the CEE region, just a few countries reported positive growth, with Czech Republic and Slovakia being the most dynamic. The desktop market in the MEA region reported the lowest drop ever while notebook sales were able to remain afloat, with strong growth for portable PCs in Africa in particular."
PC sales in Western Europe also slowed down, declining by a moderate –0.5 percent year on year, and slightly ahead of forecasts. Commercial sales were directly impacted by the economic downturn and declined by –14.8 percent, affecting both desktop and portable shipments.
However, the consumer market demonstrated some resilience, despite a slowdown in consumer spending as a result of fragile consumer confidence and rising unemployment.
In Western Europe, dynamics in the portable PC market continued to be driven by consumer demand, with Mini Notebooks contributing to an impressive 28 percent growth despite the overall economic slowdown.
The market clearly benefited from continued price declines overall, and retailers deployed aggressive deals and promotions, as cash-trapped customers were increasingly looking for a bargain and opted for low-priced entry-level systems.
Tuesday, April 28, 2009
High Growth Video and Social Network Sites
Online engagement by Internet users is deepening, according to a new market study by The Nielsen Company. This increased engagement is in part a result of a shift toward video content and social networking as popular online subcategories.
In particular, time spent on social networks and video sites has increased astronomically. Advertisers are starting to positively re-assess the value of the online experience and create more meaningful relationships with consumers.
Since 2003, interests of the average online user have shifted significantly. Categories that consisted of portal-oriented browsing sites, such as Shopping Directories and Guides and Internet Tools or Web Services, used to be the top categories for user engagement.
However, today the active Internet user tends to prefer sites that contain more specialized content. This change in preferences is seen in the fact that video and social networking sites have moved to the forefront, becoming the two fastest growing categories in 2009.
Highlights of the Nielsen report include:
- The number of American users frequenting online video destinations has climbed 339 percent since 2003.
- Time spent on video sites has shot up almost 2,000 percent over the same period.
- In the last year alone, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.
- There are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites.
- In the last year alone, time spent on social networking sites has surged 73 percent.
- In February, social network usage exceeded Web-based e-mail usage for the first time.
In particular, time spent on social networks and video sites has increased astronomically. Advertisers are starting to positively re-assess the value of the online experience and create more meaningful relationships with consumers.
Since 2003, interests of the average online user have shifted significantly. Categories that consisted of portal-oriented browsing sites, such as Shopping Directories and Guides and Internet Tools or Web Services, used to be the top categories for user engagement.
However, today the active Internet user tends to prefer sites that contain more specialized content. This change in preferences is seen in the fact that video and social networking sites have moved to the forefront, becoming the two fastest growing categories in 2009.
Highlights of the Nielsen report include:
- The number of American users frequenting online video destinations has climbed 339 percent since 2003.
- Time spent on video sites has shot up almost 2,000 percent over the same period.
- In the last year alone, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.
- There are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites.
- In the last year alone, time spent on social networking sites has surged 73 percent.
- In February, social network usage exceeded Web-based e-mail usage for the first time.
Monday, April 27, 2009
World Digital Terrestrial TV STB Opportunity
The global semiconductor opportunity in standard definition (SD) Digital Terrestrial TV (DTT) Set Top Boxes will peak in 2011 at nearly $500 million.
High-definition DTT Set Top Boxes also offer a short term spike in semiconductor opportunity. However, SD DTT Set Top Boxes are the more sustainable opportunity for semiconductor manufacturers, according to the latest market study by In-Stat.
"The U.S. analog shut off is driving a surge of HD converter boxes in 2008 and 2009," says Gerry Kaufhold, In-Stat analyst. "However, this bubble will wane, while the SD DTT market continues to grow across a broader set of geographic markets."
Their report includes worldwide and regional forecasts for standard definition and HD STB shipments, revenue, bill of materials and component revenue through 2013. Extensive country-level unit/revenue shipment detail for major countries in Europe, North America and Asia -- including HD and DVR segmentation. Plus, the analog shut off timetable by country.
In-Stat's market study found the following:
- Key component categories include the Demux/CPU/AV decoder and the MPEG-2 MP@HL/Graphics IC.
- The European DTT STB Market Value will peak in 2011 at $1.6 billion.
- On a European country basis, UK leads the market, followed by Spain, France, Germany, and then Italy.
- Total DTT STB unit shipments will peak at 44 million in 2009.
- Standard Definition DTT Set Top Box unit shipments will peak in 2011.
High-definition DTT Set Top Boxes also offer a short term spike in semiconductor opportunity. However, SD DTT Set Top Boxes are the more sustainable opportunity for semiconductor manufacturers, according to the latest market study by In-Stat.
"The U.S. analog shut off is driving a surge of HD converter boxes in 2008 and 2009," says Gerry Kaufhold, In-Stat analyst. "However, this bubble will wane, while the SD DTT market continues to grow across a broader set of geographic markets."
Their report includes worldwide and regional forecasts for standard definition and HD STB shipments, revenue, bill of materials and component revenue through 2013. Extensive country-level unit/revenue shipment detail for major countries in Europe, North America and Asia -- including HD and DVR segmentation. Plus, the analog shut off timetable by country.
In-Stat's market study found the following:
- Key component categories include the Demux/CPU/AV decoder and the MPEG-2 MP@HL/Graphics IC.
- The European DTT STB Market Value will peak in 2011 at $1.6 billion.
- On a European country basis, UK leads the market, followed by Spain, France, Germany, and then Italy.
- Total DTT STB unit shipments will peak at 44 million in 2009.
- Standard Definition DTT Set Top Box unit shipments will peak in 2011.
Saturday, April 25, 2009
Advertising: the Growth was Wishful Thinking
If you already tune out and ignore most forms of advertising, then clearly you're not alone. With the exception of a couple of under-developed regions of the globe, most traditional advertisers have acknowledged that fact.
eMarketer reports that the reality has convinced those who were previously hopeful for some sort of a miracle turnaround -- apparently it was wishful thinking. Three major advertising agency buyers around the world are moving beyond their prior denial, and are now forecasting more severe declines in their customer ad spending.
Last month, GroupM, a division of WPP, predicted a 4.4 percent decline in global ad spending for 2009.
That forecast slide was exceeded by one from Carat Insight, owned by Aegis, which put the worldwide ad spending decline for 2009 at 5.8 percent.
ZenithOptimedia, the media-buying unit of Publicis, the world's fourth-largest advertising group, has boldly gone one step further than it's competitors -- by candidly predicting the largest decline.
Last December, ZenithOptimedia had expected merely a 0.2 percent decline for 2009, but the firm's revisited figures now predict nearly a 7 percent decline in worldwide ad spending this year.
In fact, ZenithOptimedia now sees ad spending dropping 11 percent for magazines, 10 percent for radio, 5.5 percent for television, and throughout the worldwide legacy mass-media spectrum.
"A lot of markets we were expecting to show at least modest growth this year are clearly going to be down substantially," Jonathan Barnard of ZenithOptimedia told the Financial Times.
Amid the unrelenting advertising sector gloom, however, there's a temporary upside. Internet advertising around the world continues to grow, projected to be up 8.6 percent this year -- to reach 12.1 percent of overall global ad spending.
However, I believe that online ad spending will suffer a similar fate, as advertisers discover more effective digital marketing methods that can positively impact revenue growth. This topic is sure to be on the agenda of the upcoming Monaco Media Forum, later this year.
Friday, April 24, 2009
STBs in the CE Home Media Server Market
Media server PCs form the majority of the devices used to store and distribute multimedia content in the home. However, set-top boxes (STBs) and consumer electronics (CE) devices such as video game consoles will gain share of the home media server market over the next five years.
ABI Research forecasts that in 2010, STBs and CE devices will together account for a little more than 51 million shipments -- roughly a third of the total world market.
These categories will continue to grow aggressively over the forecast period to 2014. Much of the new growth in media networking will take place in Europe and the Asia-Pacific region.
"STBs and CE devices are the fastest-growing types of home media serving equipment partly because of the tremendous popularity of video game consoles such as the Sony PS3," says senior analyst Jason Blackwell.
The growth in the STB segment is largely due to broadband operator's effort to push deeper into the digital home network by providing additional services and connectivity.
According to ABI, while overall home media server market growth remains quite linear through the likely period of economic recovery, STB and CE segments will outpace the market as a whole.
Operators are adding features to their STBs. One of those that tie into the media server concept is multi-room Personal Video Recorders -- the ability to record a TV show on a PVR in one room and view it via other STBs in other rooms.
Traditionally, most media network products have been classified by retailers along with core computer networking devices such as routers and hubs.
Now vendors are pushing retailers to market them instead as entertainment devices alongside TVs and DVD players. That requires an effort to educate both retailers and consumers. There's also a need to make these systems simpler and more user-friendly.
ABI Research forecasts that in 2010, STBs and CE devices will together account for a little more than 51 million shipments -- roughly a third of the total world market.
These categories will continue to grow aggressively over the forecast period to 2014. Much of the new growth in media networking will take place in Europe and the Asia-Pacific region.
"STBs and CE devices are the fastest-growing types of home media serving equipment partly because of the tremendous popularity of video game consoles such as the Sony PS3," says senior analyst Jason Blackwell.
The growth in the STB segment is largely due to broadband operator's effort to push deeper into the digital home network by providing additional services and connectivity.
According to ABI, while overall home media server market growth remains quite linear through the likely period of economic recovery, STB and CE segments will outpace the market as a whole.
Operators are adding features to their STBs. One of those that tie into the media server concept is multi-room Personal Video Recorders -- the ability to record a TV show on a PVR in one room and view it via other STBs in other rooms.
Traditionally, most media network products have been classified by retailers along with core computer networking devices such as routers and hubs.
Now vendors are pushing retailers to market them instead as entertainment devices alongside TVs and DVD players. That requires an effort to educate both retailers and consumers. There's also a need to make these systems simpler and more user-friendly.
Thursday, April 23, 2009
Blu-Ray Disc Player Growth Projections
Global shipments of Blu-ray disc players, excluding PS3, are expected to total nearly 12 million units this year, according to the latest market study by Futuresource Consulting.
In last year's crucial Q4 period, three million BD players were shipped globally, which represented more than 50 percent of the total for the year. And the trend is continuing, with our projections showing shipments for Q1 2009 will reach 1.2 million units, significantly up on Q1 2008.
All eyes will be on Q4 this year, with Futuresource predicting shipments in excess of six million units in that quarter alone, a healthy year-on-year growth that will successfully propel BD into the next decade.
Sales of HD-capable LCD and plasma TVs, and continued dramatic reductions in BD player prices also continue to fuel interest. In the last quarter of 2008, average retail prices for standalone Blu-ray players fell by 15 percent in most major markets and they're going fall by another 25 percent during the course of this year.
Add to that the raft of movie titles being issued on Blu-ray -- over 1,100 at the end of last year, on track to more than double this year -- coupled with the increase in promotional activity and the continued benefit of growing PS3 ownership, Blu-ray continues to gather momentum in all major markets.
With a lucrative roadmap stretching out for at least the next five to ten years when you factor in the rise of 3D and its associated technologies, which are ideally suited to the BD delivery platform, and there is clearly a long-term opportunity for the industry to further sustain consumer interest in Blu-ray.
In last year's crucial Q4 period, three million BD players were shipped globally, which represented more than 50 percent of the total for the year. And the trend is continuing, with our projections showing shipments for Q1 2009 will reach 1.2 million units, significantly up on Q1 2008.
All eyes will be on Q4 this year, with Futuresource predicting shipments in excess of six million units in that quarter alone, a healthy year-on-year growth that will successfully propel BD into the next decade.
Sales of HD-capable LCD and plasma TVs, and continued dramatic reductions in BD player prices also continue to fuel interest. In the last quarter of 2008, average retail prices for standalone Blu-ray players fell by 15 percent in most major markets and they're going fall by another 25 percent during the course of this year.
Add to that the raft of movie titles being issued on Blu-ray -- over 1,100 at the end of last year, on track to more than double this year -- coupled with the increase in promotional activity and the continued benefit of growing PS3 ownership, Blu-ray continues to gather momentum in all major markets.
With a lucrative roadmap stretching out for at least the next five to ten years when you factor in the rise of 3D and its associated technologies, which are ideally suited to the BD delivery platform, and there is clearly a long-term opportunity for the industry to further sustain consumer interest in Blu-ray.
Wednesday, April 22, 2009
Expansion for Wireless Backhaul Networks
Anticipated growth with data-intensive mobile multimedia applications is creating demand for increased network investment. Worldwide revenues from backhaul leasing are expected to double over the next 30 months, according to a new market study from ABI Research.
The growth curve even accelerates after 2012, resulting in a fivefold revenue increase between 2009 and 2014.
According to ABI Research senior analyst Nadine Manjaro, the main driver is the effort by mobile operators to prepare for an upgrade to LTE 4G technology. "Operators might not deploy LTE immediately," she says, "but they know that before they do, they'll have to upgrade their backhaul capacity."
Lack of backhaul capacity is the primary bottleneck that can prevent a satisfactory user experience. "AT&T Mobility has found that one iPhone user typically generates as much data traffic as 30 basic feature phone users," notes Manjaro.
Wireless network traffic will dramatically increase as smartphone devices becomes the norm and laptop PC card usage increases. Another indicator is the growing capital expenditure on microwave backhaul, which will exceed $8.5 billion in 2009.
ABI believes that fixed-line operators such as BT, Embarq, AT&T, and Verizon Communications will develop new revenue streams by providing leased backhaul services.
Even the business models for backhaul are in flux. "We have observed a movement towards backhaul as a managed service," says Manjaro. "This enables mobile operators to focus on their core business, while guaranteeing a backhaul capacity matched to their changing traffic demands."
The growth curve even accelerates after 2012, resulting in a fivefold revenue increase between 2009 and 2014.
According to ABI Research senior analyst Nadine Manjaro, the main driver is the effort by mobile operators to prepare for an upgrade to LTE 4G technology. "Operators might not deploy LTE immediately," she says, "but they know that before they do, they'll have to upgrade their backhaul capacity."
Lack of backhaul capacity is the primary bottleneck that can prevent a satisfactory user experience. "AT&T Mobility has found that one iPhone user typically generates as much data traffic as 30 basic feature phone users," notes Manjaro.
Wireless network traffic will dramatically increase as smartphone devices becomes the norm and laptop PC card usage increases. Another indicator is the growing capital expenditure on microwave backhaul, which will exceed $8.5 billion in 2009.
ABI believes that fixed-line operators such as BT, Embarq, AT&T, and Verizon Communications will develop new revenue streams by providing leased backhaul services.
Even the business models for backhaul are in flux. "We have observed a movement towards backhaul as a managed service," says Manjaro. "This enables mobile operators to focus on their core business, while guaranteeing a backhaul capacity matched to their changing traffic demands."
Tuesday, April 21, 2009
IT Buyer Best Practices at Small Businesses
Small and medium-sized businesses (SMBs) in the U.S. are using more diverse information sources to first learn about new IT products, services and suppliers.
Despite the growing use of the Internet as a source of information, a trend that will continue, peer group word of mouth still receives high mentions by SMBs, according to a new IDC study.
"A major challenge for providers of advanced technology products and services is how best to reach the 7.9 million SMBs in the United States," said Merle Sandler, research manager for SMB Programs at IDC.
SMBs use multiple information sources, so technology providers need to develop an effective promotional portfolio to ensure visibility in the places where SMBs turn for IT information -- bearing in mind that their preferences vary by business size, vertical industry, and attitude cluster.
Highlights of IDC's market study include:
- Word of mouth is most often cited by small businesses (SBs) and medium-sized businesses (MBs) as how they initially become aware of IT products, technology, and suppliers. However, vendor Web sites and word of mouth tie for first place as a source of more detailed information for both small and medium businesses.
- SMBs differ far more by vertical industry than they do by company size regarding places where they become aware of technology as well as sources for more detailed information. Communications firms cite the highest average number of sources, while banking/finance firms averaged the lowest.
- SMBs differ a great deal by cluster regarding the information sources that they utilize. A well above average share of SMB 2.0 firms mention online sources for both becoming aware of and gathering IT procurement information.
Despite the growing use of the Internet as a source of information, a trend that will continue, peer group word of mouth still receives high mentions by SMBs, according to a new IDC study.
"A major challenge for providers of advanced technology products and services is how best to reach the 7.9 million SMBs in the United States," said Merle Sandler, research manager for SMB Programs at IDC.
SMBs use multiple information sources, so technology providers need to develop an effective promotional portfolio to ensure visibility in the places where SMBs turn for IT information -- bearing in mind that their preferences vary by business size, vertical industry, and attitude cluster.
Highlights of IDC's market study include:
- Word of mouth is most often cited by small businesses (SBs) and medium-sized businesses (MBs) as how they initially become aware of IT products, technology, and suppliers. However, vendor Web sites and word of mouth tie for first place as a source of more detailed information for both small and medium businesses.
- SMBs differ far more by vertical industry than they do by company size regarding places where they become aware of technology as well as sources for more detailed information. Communications firms cite the highest average number of sources, while banking/finance firms averaged the lowest.
- SMBs differ a great deal by cluster regarding the information sources that they utilize. A well above average share of SMB 2.0 firms mention online sources for both becoming aware of and gathering IT procurement information.
Monday, April 20, 2009
Consumers Multitasking and Cutting Services
Over 66 million consumers across demographic categories are using the Internet while concurrently watching television, perhaps not fully paying attention to either, according to the latest market study by In-Stat.
Based on In-Stat's recent survey, 33 percent of all male respondents, across age groups, reported that they are sometimes using a personal computer simultaneously while watching TV.
Among some male age groups the behavior was as high as 50 percent. In contrast, about 25 percent of female respondents reported using a PC while watching TV.
"Consumer multitasking represents an important emerging opportunity for the TV industry" says Gerry Kaufhold, In-Stat analyst.
Local TV stations, TV networks, pay-TV networks, 24-hour news networks, sports leagues, and music channels, can instantly connect to some of their viewers, right now, on both the TV screen and on a notebook or netbook computer screen.
In-Stat's market study found the following:
- One-fifth of all respondents reported doing instant messaging while watching TV, with similar responses among females and males.
- U.S. consumers could drop spending on mobile, broadband and pay TV services by nearly $5 billion due to economic turmoil.
- About 15 percent of U.S. respondents intend to cut back spending on Pay-TV, broadband, and mobile services in response to economic pressures.
Based on In-Stat's recent survey, 33 percent of all male respondents, across age groups, reported that they are sometimes using a personal computer simultaneously while watching TV.
Among some male age groups the behavior was as high as 50 percent. In contrast, about 25 percent of female respondents reported using a PC while watching TV.
"Consumer multitasking represents an important emerging opportunity for the TV industry" says Gerry Kaufhold, In-Stat analyst.
Local TV stations, TV networks, pay-TV networks, 24-hour news networks, sports leagues, and music channels, can instantly connect to some of their viewers, right now, on both the TV screen and on a notebook or netbook computer screen.
In-Stat's market study found the following:
- One-fifth of all respondents reported doing instant messaging while watching TV, with similar responses among females and males.
- U.S. consumers could drop spending on mobile, broadband and pay TV services by nearly $5 billion due to economic turmoil.
- About 15 percent of U.S. respondents intend to cut back spending on Pay-TV, broadband, and mobile services in response to economic pressures.
Saturday, April 18, 2009
SMB Marketers Abandoning Traditional Ads
eMarketer reports that according to a poll of U.S. marketers by Bredin Business Information, the primary challenges in marketing to American small businesses are funding new projects, growing the business with limited resources and increasing awareness.
In addition, marketers say the outlook for small business marketing has changed in 2009. They are increasing their online activities, becoming more focused and conducting segmentation research to better target their customers.
It is no surprise that the local online marketing space is where many small and medium-sized businesses (SMBs) are moving their efforts -- and their marketing investment.
It's apparent that digital marketing has gained increased adoption at the expense of legacy advertising approaches -- in particular yellow page directory listings and direct mail coupons. The leaders in both forms of mass-media publishing failed to migrate their value proposition to the online model.
Clearly, in 2009 more savvy SMB marketers will abandon traditional advertising that delivers a consistently low return on investment. Search engine marketing will garner the most converts. Social media marketing and search engine optimization practices will also increase in adoption.
Borrell Associates estimated SMBs invested $7.4 billion on local online marketing in 2008. That figure accounted for 11 percent of all SMB marketing spending, and more than one-half of total U.S. local digital spending, including Website development.
Friday, April 17, 2009
Pay-TV Crisis: an Over the Top Video Threat
According to The Diffusion Group (TDG), PayTV operators must execute three specific tactics in order to survive the threat of emerging competitors and take advantage of their legacy position in the video entertainment value chain.
TDG believes that PayTV operators must:
- Push existing cable network TV programs online;
- Deliver today's Internet-only content and bonus material directly to the television; and
- Offer broadband TV services without requiring a traditional PayTV subscription (as a stand-alone service).
By executing these three strategies, PayTV operators will enhance their defensive position, gain the attention of the Internet generation, and find an additional $2 billion in annual revenue by 2013. Well, that's if they can move past their current denial of the apparent market trends.
Colin Dixon, senior analyst with TDG points to the emerging threat from Over the Top (OTT) video services as the primary reason why PayTV operators must aggressively pursue online video strategies.
Pent-Up Market Demand
"More than half of adult Internet users are interested in an OTT broadband TV service," notes Dixon. "So much that they would consider canceling their existing PayTV subscription if the OTT service was priced appropriately."
According to Dixon, it will not be long before a variety of companies including consumer electonics OEMs, web-based aggregators, and pure-play OTT providers look to tap into this interest and compete more directly with PayTV operators.
As TV-based web connectivity becomes more prominent, and as web-based content providers more fully exploit these new connections, the local cable company becomes just one of many conduits serving the TV screen.
Dixon notes that this multiplicity of access points has already allowed providers such as Netflix to economically introduce streaming functionality directly to the TV without the burden of proprietary hardware.
"Content providers such as Netflix and Amazon are partnering with CE vendors to deliver their content directly to the TV, going over the top of incumbent set-top boxes. As this happens, these simple services evolve to something more akin to premium movie services at a far more economical price than current Pay TV offerings."
TDG believes that PayTV operators must:
- Push existing cable network TV programs online;
- Deliver today's Internet-only content and bonus material directly to the television; and
- Offer broadband TV services without requiring a traditional PayTV subscription (as a stand-alone service).
By executing these three strategies, PayTV operators will enhance their defensive position, gain the attention of the Internet generation, and find an additional $2 billion in annual revenue by 2013. Well, that's if they can move past their current denial of the apparent market trends.
Colin Dixon, senior analyst with TDG points to the emerging threat from Over the Top (OTT) video services as the primary reason why PayTV operators must aggressively pursue online video strategies.
Pent-Up Market Demand
"More than half of adult Internet users are interested in an OTT broadband TV service," notes Dixon. "So much that they would consider canceling their existing PayTV subscription if the OTT service was priced appropriately."
According to Dixon, it will not be long before a variety of companies including consumer electonics OEMs, web-based aggregators, and pure-play OTT providers look to tap into this interest and compete more directly with PayTV operators.
As TV-based web connectivity becomes more prominent, and as web-based content providers more fully exploit these new connections, the local cable company becomes just one of many conduits serving the TV screen.
Dixon notes that this multiplicity of access points has already allowed providers such as Netflix to economically introduce streaming functionality directly to the TV without the burden of proprietary hardware.
"Content providers such as Netflix and Amazon are partnering with CE vendors to deliver their content directly to the TV, going over the top of incumbent set-top boxes. As this happens, these simple services evolve to something more akin to premium movie services at a far more economical price than current Pay TV offerings."
Thursday, April 16, 2009
U.S. Mobile PC Data Card Usage Insights
ComScore released the results of a market study of U.S. Internet usage via mobile PC data cards, which showed that the subscriber base began to decelerate noticeably in Q4 2008.
The study examined the usage and characteristics of mobile PC data card users through data collected from computers where Internet access via mobile broadband Internet service providers (ISPs) occurred.
Mobile broadband employs cellular telecommunication networks, where users pay subscription fees for access and the connection is made using a PC card, built-in adapter, or connections can be tethered via a cell-phone or PDA.
PC data card adoption grew 163 percent overall in 2008, slightly ahead of the 157 percent growth rate in 2007, a confirmation of the market's strong growth trajectory.
However, despite this rapid adoption curve, Q4 2008 showed the first signs of softness in the market, as sequential quarterly subscriber growth fell to just 5 percent, following sequential growth of 22 percent in Q3 2008 and several preceding quarters of double-digit growth.
"The PC data card market is clearly still in the early stages of its adoption curve, with the overall number of U.S. subscribers multiplying in the past few years," said Serge Matta, comScore senior vice president.
"That said, we've observed a significant deceleration in subscriber growth during Q4 2008 coinciding with the economic downturn, an indication that mobile broadband service may still be seen by many as a luxury rather than a necessity."
Now is the time for mobile broadband providers to solidify their market position, because as the economy begins to recover and discretionary spending resume the market will likely accelerate once again.
The study also compared the Internet usage patterns of mobile broadband PC data card users with the general U.S. Internet population to determine how the availability of mobile broadband affects online time.
It is important to understand whether online access via mobile broadband represents incremental Internet usage or merely a shift in usage time between different access points.
When looking at the population in aggregate, the results indicated that PC data card usage actually represents a time-shift in Internet consumption, as PC data card users spent nearly the same amount of time online (89 hours) as typical U.S. Internet users (90 hours) during Q4 2008.
Of PC data card users with both a PC data card and a wireline ISP, approximately 25 percent of their total online time (22 hours) was spent using a PC data card.
The study examined the usage and characteristics of mobile PC data card users through data collected from computers where Internet access via mobile broadband Internet service providers (ISPs) occurred.
Mobile broadband employs cellular telecommunication networks, where users pay subscription fees for access and the connection is made using a PC card, built-in adapter, or connections can be tethered via a cell-phone or PDA.
PC data card adoption grew 163 percent overall in 2008, slightly ahead of the 157 percent growth rate in 2007, a confirmation of the market's strong growth trajectory.
However, despite this rapid adoption curve, Q4 2008 showed the first signs of softness in the market, as sequential quarterly subscriber growth fell to just 5 percent, following sequential growth of 22 percent in Q3 2008 and several preceding quarters of double-digit growth.
"The PC data card market is clearly still in the early stages of its adoption curve, with the overall number of U.S. subscribers multiplying in the past few years," said Serge Matta, comScore senior vice president.
"That said, we've observed a significant deceleration in subscriber growth during Q4 2008 coinciding with the economic downturn, an indication that mobile broadband service may still be seen by many as a luxury rather than a necessity."
Now is the time for mobile broadband providers to solidify their market position, because as the economy begins to recover and discretionary spending resume the market will likely accelerate once again.
The study also compared the Internet usage patterns of mobile broadband PC data card users with the general U.S. Internet population to determine how the availability of mobile broadband affects online time.
It is important to understand whether online access via mobile broadband represents incremental Internet usage or merely a shift in usage time between different access points.
When looking at the population in aggregate, the results indicated that PC data card usage actually represents a time-shift in Internet consumption, as PC data card users spent nearly the same amount of time online (89 hours) as typical U.S. Internet users (90 hours) during Q4 2008.
Of PC data card users with both a PC data card and a wireline ISP, approximately 25 percent of their total online time (22 hours) was spent using a PC data card.
Wednesday, April 15, 2009
Digital Home Networks are Still Too Complex
Growth for home networking products has been slowing in recent years, due to market saturation and price erosion. The decline is partly due to the current global economic slump -- and forecasts for core home networking device revenues indicate a declining market through 2014.
However, the network connected media device market segment continues to show growth. The result, according to a new market study from ABI Research, is that total revenues for network connected devices will rise from about $74 billion this year to over $94 billion in 2010.
"Network connected media devices such as game consoles, TVs, and set-top boxes offer an opportunity for core networking companies to reorient themselves away from a declining market," says senior analyst Jason Blackwell.
Home network device vendors such as Linksys (Cisco) and Netgear, as well as networking silicon vendors such as Broadcom are targeting these growing product categories aimed at home entertainment networking and connecting consumer electronics devices to the network.
Other vendors targeting this space include Apple, Roku and Vudu.
The best opportunities in the media networking market will arise from the growth of video and audio distribution around the home, as well as from new services that will be offered by service providers.
Initially, Wi-Fi will provide the majority of connections -- Ethernet will place a strong second. Over time, powerline, coax, and high-speed wireless connections will show strong adoption growth rates.
I believe that the major inhibitor to increased market adoption continues to be the complexity that is inherent in most home network devices. They are designed by engineers for their peer group, not for the typical mainstream consumer. Therefore, customer support costs are still relatively high.
However, the network connected media device market segment continues to show growth. The result, according to a new market study from ABI Research, is that total revenues for network connected devices will rise from about $74 billion this year to over $94 billion in 2010.
"Network connected media devices such as game consoles, TVs, and set-top boxes offer an opportunity for core networking companies to reorient themselves away from a declining market," says senior analyst Jason Blackwell.
Home network device vendors such as Linksys (Cisco) and Netgear, as well as networking silicon vendors such as Broadcom are targeting these growing product categories aimed at home entertainment networking and connecting consumer electronics devices to the network.
Other vendors targeting this space include Apple, Roku and Vudu.
The best opportunities in the media networking market will arise from the growth of video and audio distribution around the home, as well as from new services that will be offered by service providers.
Initially, Wi-Fi will provide the majority of connections -- Ethernet will place a strong second. Over time, powerline, coax, and high-speed wireless connections will show strong adoption growth rates.
I believe that the major inhibitor to increased market adoption continues to be the complexity that is inherent in most home network devices. They are designed by engineers for their peer group, not for the typical mainstream consumer. Therefore, customer support costs are still relatively high.
Tuesday, April 14, 2009
Digital Radio Growth in Emerging Markets
Regardless of consumer confidence being at its weakest point in long time, the worldwide market for digital radio experienced year-over-year growth of 85 percent between 2007 and 2008, according to the latest market study by In-Stat.
The Asia-Pacific region, primarily Korea, was the main driver of the growth seen over this time period. However, a market shift is on the way.
"Moving into 2009, developed economies are significantly impacted by the economic turndown. However, developing parts of Asia/Pacific are still experiencing growth in digital radio shipments." says Stephanie Ethier, In-Stat analyst.
The reality of the math is that even modest adoption in heavily populous countries such as China and India drives a large impact in global shipments.
In-Stat's market study found the following:
- Worldwide, the market for both satellite and terrestrial digital radio, combined, will grow to over 55 million unit shipments in 2012.
- Key suppliers of semiconductor digital radio integrated circuits (ICs) for this market include Frontier Silicon, NXP, ST Microelectronics and Texas Instruments.
- A variety of digital radio broadcast standards are being deployed, largely on a geographic basis. Among these include iBiquity's IBOC technology, Eureka 147 (also referred to as digital audio broadcasting (DAB)), terrestrial integrated services digital broadcasting (ISDB-T), Satellite digital audio radio services (S-DARS), and Digital multimedia broadcasting (DMB).
The Asia-Pacific region, primarily Korea, was the main driver of the growth seen over this time period. However, a market shift is on the way.
"Moving into 2009, developed economies are significantly impacted by the economic turndown. However, developing parts of Asia/Pacific are still experiencing growth in digital radio shipments." says Stephanie Ethier, In-Stat analyst.
The reality of the math is that even modest adoption in heavily populous countries such as China and India drives a large impact in global shipments.
In-Stat's market study found the following:
- Worldwide, the market for both satellite and terrestrial digital radio, combined, will grow to over 55 million unit shipments in 2012.
- Key suppliers of semiconductor digital radio integrated circuits (ICs) for this market include Frontier Silicon, NXP, ST Microelectronics and Texas Instruments.
- A variety of digital radio broadcast standards are being deployed, largely on a geographic basis. Among these include iBiquity's IBOC technology, Eureka 147 (also referred to as digital audio broadcasting (DAB)), terrestrial integrated services digital broadcasting (ISDB-T), Satellite digital audio radio services (S-DARS), and Digital multimedia broadcasting (DMB).
Monday, April 13, 2009
Mobile Service Active Infrastructure Sharing
According to ABI Research, the worldwide combined savings from mobile service provider active infrastructure sharing could amount to as much as $60 billion over the next five year period.
The study finds that operators could enjoy at least 40 percent cost savings in addition to those available from passive site sharing.
The distinction between active and passive sharing is important. Passive sharing involves components such as the tower mast or pylons, cables, physical site or rooftop, shelter cabinets, power supply, air-conditioning, alarm systems, etc.
Active sharing includes antennas, antenna systems, backhaul transmission systems and the base station equipment itself. Not surprisingly, passive sharing is seen as a safer alternative, but the cost-saving rewards of active sharing are much greater.
According to senior analyst Aditya Kaul, "With most countries and regions of the world having more than one operator, network sharing is a logical way of pooling resources for common benefit. However, many operators are reluctant to share site electronics, fearing issues of competition, scalability and accountability."
Passive sharing is quite common, even mandatory in some regions. However active sharing has seen limited uptake. The most recent example: Vodafone and O2, which have recently signed a Europe-wide sharing agreement.
O2 and Vodafone are not sharing base stations. The agreement mostly concerns other elements of base station sites: it is largely passive sharing.
However, some active sharing agreements include T-Mobile and 3 in the UK, Telstra/3 and Vodafone/Optus in Australia, and in Sweden, Tele2 with Telia and Tre (3) with Telenor.
"Most of the active sharing has happened in mature markets," says Kaul, "but we see very great potential in emerging markets like India where rural expansion and 3G could drive active sharing."
The study finds that operators could enjoy at least 40 percent cost savings in addition to those available from passive site sharing.
The distinction between active and passive sharing is important. Passive sharing involves components such as the tower mast or pylons, cables, physical site or rooftop, shelter cabinets, power supply, air-conditioning, alarm systems, etc.
Active sharing includes antennas, antenna systems, backhaul transmission systems and the base station equipment itself. Not surprisingly, passive sharing is seen as a safer alternative, but the cost-saving rewards of active sharing are much greater.
According to senior analyst Aditya Kaul, "With most countries and regions of the world having more than one operator, network sharing is a logical way of pooling resources for common benefit. However, many operators are reluctant to share site electronics, fearing issues of competition, scalability and accountability."
Passive sharing is quite common, even mandatory in some regions. However active sharing has seen limited uptake. The most recent example: Vodafone and O2, which have recently signed a Europe-wide sharing agreement.
O2 and Vodafone are not sharing base stations. The agreement mostly concerns other elements of base station sites: it is largely passive sharing.
However, some active sharing agreements include T-Mobile and 3 in the UK, Telstra/3 and Vodafone/Optus in Australia, and in Sweden, Tele2 with Telia and Tre (3) with Telenor.
"Most of the active sharing has happened in mature markets," says Kaul, "but we see very great potential in emerging markets like India where rural expansion and 3G could drive active sharing."
Sunday, April 12, 2009
Bold Broadband Policy: Yes We Can, America
Try to imagine this scenario, that General Motors and Ford were given exclusive franchises to build America's interstate highway system, and also all the highways that connect local communities.
Now imagine that, based upon a financial crisis, these troubled companies decided to convert all "their" local arteries into toll-roads -- they then use incremental toll fees to severely limit all travel to and from small businesses. Why? This handicapping process reduced the need to invest in building better new roads, or repairing the dilapidated ones.
But, wouldn't that short-sighted decision have a detrimental impact on the overall national economy? It's a moot point -- pure fantasy -- you say. The U.S. political leadership would never knowingly risk the nation's social and economic future on the financial viability of a restrictive duopoly.
Or, would they?
The 21st century Global Networked Economy travels across essential broadband infrastructure. The forced introduction of tiered pricing plans in the U.S. has ignited a heated debate, and moved bold local policymakers in New York to decisive action.
Here is Austin, Texas, where I live and work -- we've been warned; your local economy has been targeted for handicapped broadband, prepare for the inevitable. Internet toll booths are now scheduled to arrive in October. Meanwhile, State of Texas policymakers have remained silent, thus far.
In other related news, the U.S. federal government will finally start work on a national broadband policy. One of the few remaining nations in the developed world yet to address this key forward-looking economic development issue, America has lost so much competitive ground to the global leaders that the task at hand is now truly daunting.
What can be done to ensure that the U.S. catches up with Japan, South Korea, France and the others? Surprisingly, in comparison, French consumers still pay less and get significantly more bandwidth per dollar than Americans do on average.
If the Obama administration follows Australia's bold plan of action, where the vested interest of the Australian people are apparently the national priority, then there is hope for swift progress. Where did the Australian's likely get their inspiration? Land of the free, and home of the brave -- my point: Yes, We Can, America
Update: Congressman Eric Massa, Rochester - New York, describes the "huge issue" (see Video opening statement) to a group of local constituents -- why 21st Century Internet access is essential for all Americans.
Five Days on the Digital Dirt Road tells the stories of mainstream Americans who say that they can't wait any longer for the "promise" of broadband Internet access to reach their communities. "When is our time going to come."
The U.S. government can learn much from the current global broadband trailblazer nations, such as South Korea, that have demonstrated the results of meaningful public policy.
Saturday, April 11, 2009
Global Increase in Mobile Messaging Traffic
Communication in the future will be done increasingly through mobile devices. According to TNS Global, 74 percent of the world's digital messages were sent via a mobile device in January 2009, a 15 percent increase over the previous year.
In emerging markets, the trend is even more dramatic -- nine out of 10 messages are sent via mobile phone.
Some of the growth can be attributed to mobile instant messaging. Thirteen percent of all mobile subscribers used the feature, compared to 41 percent of smartphone users.
Other increases in mobile phone usage can be attributed to the abandonment of fixed-line telephone services.
"As mobile devices slowly take away usage share from fixed services in developed markets, in emerging markets consumers are more likely to by-pass fixed communications altogether and go straight to mobiles," said Sam Curtis of TNS.
As for developed countries, the PC e-mail remains the most popular message method, but its use is decreasing.
In Japan, 40 out of 100 e-mails sent are from a mobile device. In North America, 69 percent of those using e-mail on their mobile phone use it daily, compared with 43 percent worldwide.
The trend will increase, TNS says, as smartphones -- such as the popular Apple iPhone -- enter the marketplace and gain share.
Friday, April 10, 2009
Dynamic Digital Signage with Pico Projectors
Here's something very small, with a market upside that's very big. With a potential addressable market measured in the billions of units, In-Stat is now forecasting the market for pico-projectors to exceed $1.1 billion within five years.
Apparently, redesigned mobile phones and accessory projectors will lead the pico-projector market, with computing devices and consumer products following.
"As mobile devices add more multimedia capabilities, embedded pico-projectors can add a big-screen experience to a very small device," says David Chamberlain, In-Stat analyst.
Technological advances in miniaturization, signal processing, and light sources -- including green laser -- are making pico-projectors a realistic feature for small battery powered devices like cellphones, media players, computing devices, and other consumer electronics.
I believe that the applications for handheld projection devices creates yet another interesting impromptu presentation vehicle for people engaged in producing marketing-related digital video content.
While most analysts tend to focus on traditional meeting room or home entertainment presentation scenarios, I'm really intrigued by the potential for low-cost mobile digital signage applications. Just imagine being able to display a video image on a suitable surface in any public place, at any time, and without the usual restrictions.
In-Stat's market study found the following:
- Illumination technologies continue to develop with vendors offering both LED and laser. Green laser is a critical development area.
- Projector module economies of scale will expand the market for embedded pico-projectors to lower-priced cellphones and media players in the near future.
- Among companies offering pico-projectors include 3M, Displaytech, Foxxcon, Light Blue Optics, Oculon, Optoma, Microvision, Toshiba, and TI.
Apparently, redesigned mobile phones and accessory projectors will lead the pico-projector market, with computing devices and consumer products following.
"As mobile devices add more multimedia capabilities, embedded pico-projectors can add a big-screen experience to a very small device," says David Chamberlain, In-Stat analyst.
Technological advances in miniaturization, signal processing, and light sources -- including green laser -- are making pico-projectors a realistic feature for small battery powered devices like cellphones, media players, computing devices, and other consumer electronics.
I believe that the applications for handheld projection devices creates yet another interesting impromptu presentation vehicle for people engaged in producing marketing-related digital video content.
While most analysts tend to focus on traditional meeting room or home entertainment presentation scenarios, I'm really intrigued by the potential for low-cost mobile digital signage applications. Just imagine being able to display a video image on a suitable surface in any public place, at any time, and without the usual restrictions.
In-Stat's market study found the following:
- Illumination technologies continue to develop with vendors offering both LED and laser. Green laser is a critical development area.
- Projector module economies of scale will expand the market for embedded pico-projectors to lower-priced cellphones and media players in the near future.
- Among companies offering pico-projectors include 3M, Displaytech, Foxxcon, Light Blue Optics, Oculon, Optoma, Microvision, Toshiba, and TI.
Thursday, April 09, 2009
Internet Connected Consumer Electronics
According to the latest market study by Parks Associates, approximately 2.5 million broadband households in the U.S. and Canada are ready to purchase an Internet-connected TV -- if priced at a $100 premium over regular TVs.
This market opportunity translates into $250 million in additional revenues for the consumer electronics (CE) industry.
Parks Associates' latest consumer study, entitled "Digital Media Evolution," gauges market demand for Internet-connected devices and the applications people want to use in conjunction with this new capability.
The study covers digital cameras, TVs, digital photo frames, and Blu-ray players and finds digital TVs have the strongest market potential.
The top application consumers want through a connected TV is access to video-on-demand content. At the same time, roughly one-third of broadband households in the U.S. and Canada want on-screen widgets, and 27 percent want to access content stored on their home computers.
"Access to additional content is the key demand driver," said John Barrett, director of research, Parks Associates. In particular, new over-the-top video content.
Most people can get popular video titles through their pay-TV providers, but if they want to watch niche or personal content on their TV, they have to burn or buy DVDs. With a connected TV, they suddenly have lots more options.
This market opportunity translates into $250 million in additional revenues for the consumer electronics (CE) industry.
Parks Associates' latest consumer study, entitled "Digital Media Evolution," gauges market demand for Internet-connected devices and the applications people want to use in conjunction with this new capability.
The study covers digital cameras, TVs, digital photo frames, and Blu-ray players and finds digital TVs have the strongest market potential.
The top application consumers want through a connected TV is access to video-on-demand content. At the same time, roughly one-third of broadband households in the U.S. and Canada want on-screen widgets, and 27 percent want to access content stored on their home computers.
"Access to additional content is the key demand driver," said John Barrett, director of research, Parks Associates. In particular, new over-the-top video content.
Most people can get popular video titles through their pay-TV providers, but if they want to watch niche or personal content on their TV, they have to burn or buy DVDs. With a connected TV, they suddenly have lots more options.
Wednesday, April 08, 2009
Growth of High-Speed Mobile Data Networks
Mobile broadband technologies apparently played a starring role at the CTIA 2009 show in Las Vegas, as North American mobile service providers continue to build out high-speed data networks -- despite the ongoing economic downturn.
In the case of LTE, major operators such as Verizon Wireless are still committed to launching LTE in 2010, although WiMAX has recently taken a hit with Clearwire announcing that it won't launch in any new markets until 2010.
"Despite the impact of tough economic times on North America, the deployment of mobile broadband networks -- and customer adoption of the services they enable -- is continuing," says Tammy Parker, principal analyst at Informa Telecoms & Media.
Broader availability of smartphones, as well as netbooks and laptops with embedded mobile broadband connectivity, is helping spur demand for high-speed data delivery, leading operators to chart their courses to the next generation of technologies that includes LTE and WiMAX.
It behooves operators to stimulate this demand because mobile broadband customers generally deliver the highest average revenue per user (ARPU).
Mobile broadband is already a must-have service for many consumers and businesses, which helps to explain why it will be one of the strongest mobile segments throughout the downturn.
"We've fully revised all our forecasts in light of the economic downturn, but we're still expecting strong growth through 2013 in mobile broadband subscribers, device unit sales and operator data revenues," says Mike Roberts, principal analyst at Informa.
For example in North America mobile broadband accounted for close to 25 percent of total mobile subscribers in 2008 but this will jump to near 75 percent by 2013.
Informa research shows that the U.S. was the world's largest mobile broadband market in 2008 and will retain the position in 2009-13, although its share of the global market will decline as mobile broadband takes off in China, India and other major markets.
The U.S. had 61.9 million mobile broadband subscribers in 2008, up 70 percent from 36.3 million in 2007, and this is set to increase 308 percent to 252.4 million in 2013.
EV-DO/EV-DO Rev. A will be the top mobile broadband systems in the U.S. through 2013, followed by HSPA, but WiMAX and LTE will play significant roles from 2010.
With skyrocketing data usage expected to quickly outstrip the capabilities of today's networks, operators are hoping to deploy new infrastructure that will be capable of higher speeds and more capacity. Although LTE appears to be the next-generation choice worldwide, WiMAX will have its place in the market.
During the CTIA event, operators also addressed their visions for opening mobile networks to more devices, content and applications. Other hot topics included IP backhaul to support next-generation networks, fixed-mobile convergence including the use of femtocells, and mobile applications based on location and social networking.
In the case of LTE, major operators such as Verizon Wireless are still committed to launching LTE in 2010, although WiMAX has recently taken a hit with Clearwire announcing that it won't launch in any new markets until 2010.
"Despite the impact of tough economic times on North America, the deployment of mobile broadband networks -- and customer adoption of the services they enable -- is continuing," says Tammy Parker, principal analyst at Informa Telecoms & Media.
Broader availability of smartphones, as well as netbooks and laptops with embedded mobile broadband connectivity, is helping spur demand for high-speed data delivery, leading operators to chart their courses to the next generation of technologies that includes LTE and WiMAX.
It behooves operators to stimulate this demand because mobile broadband customers generally deliver the highest average revenue per user (ARPU).
Mobile broadband is already a must-have service for many consumers and businesses, which helps to explain why it will be one of the strongest mobile segments throughout the downturn.
"We've fully revised all our forecasts in light of the economic downturn, but we're still expecting strong growth through 2013 in mobile broadband subscribers, device unit sales and operator data revenues," says Mike Roberts, principal analyst at Informa.
For example in North America mobile broadband accounted for close to 25 percent of total mobile subscribers in 2008 but this will jump to near 75 percent by 2013.
Informa research shows that the U.S. was the world's largest mobile broadband market in 2008 and will retain the position in 2009-13, although its share of the global market will decline as mobile broadband takes off in China, India and other major markets.
The U.S. had 61.9 million mobile broadband subscribers in 2008, up 70 percent from 36.3 million in 2007, and this is set to increase 308 percent to 252.4 million in 2013.
EV-DO/EV-DO Rev. A will be the top mobile broadband systems in the U.S. through 2013, followed by HSPA, but WiMAX and LTE will play significant roles from 2010.
With skyrocketing data usage expected to quickly outstrip the capabilities of today's networks, operators are hoping to deploy new infrastructure that will be capable of higher speeds and more capacity. Although LTE appears to be the next-generation choice worldwide, WiMAX will have its place in the market.
During the CTIA event, operators also addressed their visions for opening mobile networks to more devices, content and applications. Other hot topics included IP backhaul to support next-generation networks, fixed-mobile convergence including the use of femtocells, and mobile applications based on location and social networking.
Tuesday, April 07, 2009
Subscriber Upside for Mobile & WiFi Phones
Smartphones are evolving quickly, and differentiation is becoming increasingly based on software and the operating system (OS) rather than form factor, according to the latest market study by Infonetics Research.
Smartphones still compete on hardware features that support key apps like photography or video viewing, but software and applications that enable a user's preferred mobile uses have an increasing influence on device selection -- personalization will be in demand.
For instance, the Android platform may be a work in progress, but the first handset to use it, the G1, is attracting high levels of interest, and future models are likely be optimized for key web applications like social networking. Open source platforms like Android are shaping the new competitive landscape.
Highlights from the Infonetics study include:
- The economic recession had a notable impact on the worldwide mobile phones market in the latter half of 2008, ending in flat manufacturer revenue growth for the year ($156 billion), as consumers and enterprises cut device spending.
- Infonetics forecasts an 8 percent drop in the total number of mobile phones sold in 2009, to 1.1 billion worldwide (down from 1.2 billion in 2008), in line with predictions from Nokia, among others.
- Smartphones were the best-performing segment of the mobile phones market in 2008 and the only segment to show unit and revenue growth in the second half of the year as the world economy entered recession.
- Bucking the general trend, smartphones are expected to out-perform the downturn and show modest growth in 2009, and will be the only mobile phone segment to maintain annual revenue growth over the next five years, and the only to post double-digit annual revenue growth from 2011 through 2013.
- Market penetration of higher-end phones is driven by accelerating HSPA deployments in North America, Western Europe, and developed regions in Asia Pacific.
- As a proportion of the total mobile phone market, W-CDMA gained a couple of percentage points in 2008 at the expense of CDMA2000, and GSM remained proportionately flat.
Smartphones still compete on hardware features that support key apps like photography or video viewing, but software and applications that enable a user's preferred mobile uses have an increasing influence on device selection -- personalization will be in demand.
For instance, the Android platform may be a work in progress, but the first handset to use it, the G1, is attracting high levels of interest, and future models are likely be optimized for key web applications like social networking. Open source platforms like Android are shaping the new competitive landscape.
Highlights from the Infonetics study include:
- The economic recession had a notable impact on the worldwide mobile phones market in the latter half of 2008, ending in flat manufacturer revenue growth for the year ($156 billion), as consumers and enterprises cut device spending.
- Infonetics forecasts an 8 percent drop in the total number of mobile phones sold in 2009, to 1.1 billion worldwide (down from 1.2 billion in 2008), in line with predictions from Nokia, among others.
- Smartphones were the best-performing segment of the mobile phones market in 2008 and the only segment to show unit and revenue growth in the second half of the year as the world economy entered recession.
- Bucking the general trend, smartphones are expected to out-perform the downturn and show modest growth in 2009, and will be the only mobile phone segment to maintain annual revenue growth over the next five years, and the only to post double-digit annual revenue growth from 2011 through 2013.
- Market penetration of higher-end phones is driven by accelerating HSPA deployments in North America, Western Europe, and developed regions in Asia Pacific.
- As a proportion of the total mobile phone market, W-CDMA gained a couple of percentage points in 2008 at the expense of CDMA2000, and GSM remained proportionately flat.
Monday, April 06, 2009
Growth of Digital Cameras in New Devices
Continued uptake of digital cameras in mobile phones, notebook PCs and other CE devices is driving growth in the area-array image sensor market, according to the latest market study by In-Stat.
Worldwide unit shipments of image sensors in camera phones continue to rise, mostly as a result of the continuing penetration of dual-camera phones in Asian markets. These phones utilize both a traditional point-and-shoot camera, as well as a second, inward-facing camera for two-way video communication.
As in most aspects of advanced mobile phone applications, the Asia-Pacific market continues to lead the way for others to follow. A promising new image sensor application is also taking hold.
"Currently a small segment of the market, embedded PC cameras will surpass digital still cameras to become the second-largest application for image sensors by 2011," says Brian O'Rourke, In-Stat analyst.
"A few years ago, only Apple incorporated cameras into desktop and laptop computers -- in 2008, nearly all major PC manufacturers offered embedded PC cameras in mobile PCs."
In-Stat's market study found the following:
- Camera phones comprised nearly 81 percent of area-array image sensor shipments in 2008, a share that is expected to shrink only slightly through 2013.
- Other key applications include: Digital Still Cameras, Camcorders, Security Cameras, Web Cameras, Consumer IP Cameras, Embedded PC Cameras, Embedded LCD Monitor Cameras, Toys, Automotive.
- CMOS sensors dominated image sensor shipments in 2008, with more than an 87 percent share.
- CMOS will make up 62 percent of security camera image sensors by 2013.
- While CMOS is gaining in digital still cameras, it will not surpass CCDs until 2013.
- Among the many competitors in this market are Aptina, MagnaChip, OmniVision Technologies, Sharp, Sony, and Panasonic.
Worldwide unit shipments of image sensors in camera phones continue to rise, mostly as a result of the continuing penetration of dual-camera phones in Asian markets. These phones utilize both a traditional point-and-shoot camera, as well as a second, inward-facing camera for two-way video communication.
As in most aspects of advanced mobile phone applications, the Asia-Pacific market continues to lead the way for others to follow. A promising new image sensor application is also taking hold.
"Currently a small segment of the market, embedded PC cameras will surpass digital still cameras to become the second-largest application for image sensors by 2011," says Brian O'Rourke, In-Stat analyst.
"A few years ago, only Apple incorporated cameras into desktop and laptop computers -- in 2008, nearly all major PC manufacturers offered embedded PC cameras in mobile PCs."
In-Stat's market study found the following:
- Camera phones comprised nearly 81 percent of area-array image sensor shipments in 2008, a share that is expected to shrink only slightly through 2013.
- Other key applications include: Digital Still Cameras, Camcorders, Security Cameras, Web Cameras, Consumer IP Cameras, Embedded PC Cameras, Embedded LCD Monitor Cameras, Toys, Automotive.
- CMOS sensors dominated image sensor shipments in 2008, with more than an 87 percent share.
- CMOS will make up 62 percent of security camera image sensors by 2013.
- While CMOS is gaining in digital still cameras, it will not surpass CCDs until 2013.
- Among the many competitors in this market are Aptina, MagnaChip, OmniVision Technologies, Sharp, Sony, and Panasonic.
Saturday, April 04, 2009
Ups and Downs of Local Advertising in U.S.
Local advertising in the U.S. is in for a big change, according to the latest overall industry assessment by eMarketer. The bad news, according to the Kelsey Group and BIA Advisory Services, is that there will be a decline in the local advertising market in 2013 when compared to 2008.
"By the end of the forecast period, the overall size of the local advertising market will be considerably smaller than it was at the end of 2008," said Tom Buono of BIA. The research firms predict a negative compound annual -1.4 percent overall growth rate, with the largest drop-off in local ad spending occurring this year.
Spending on traditional local media is forecast to dramatically fall from $141.3 billion in 2008 to barely over $112 billion in 2013.
The good news is that the local online ad market is growing, and will continue to make up a larger percentage of the local advertising sector. In 2009, nearly 12 percent of local ad spending will be digital, with dollars focused on Internet yellow pages, local search, e-mail marketing and other legacy online marketing tactics.
In 2013, the digital share will increase to over 22 percent, and might grow even higher if local businesses still believe that advertising is a good investment -- when compared to lower-cost marketing alternatives, such as online social media self-publication.
"The share shift we expect between traditional and digital could actually be more pronounced if the major traditional media are not able to integrate new interactive products into their bundle," said Neal Polachek of Kelsey.
Printed Yellow Pages are likely to suffer some of the worst declines. However, this format is still effective at reaching retired seniors that don't go online, and low income households. Otherwise, telephone directories will increasingly go straight to landfills or be recycled as soon as they're delivered to consumers.
Friday, April 03, 2009
Low-Cost Prosumer Video Camcorder Market
The professional video camcorder market experienced a groundswell of activity in EMEA last year, with incremental growth outstripping the previous year's performance by nearly three to one, according to the latest market study by Futuresource Consulting.
"In 2008 we saw the development of a pure non-tape pro camcorder segment at the lower end of the market -- a significant milestone for the industry and a core driver for last year's phenomenal growth," says Adam Cox, Senior Market Analyst, Futuresource Consulting.
The huge success of the low-cost Sony HVR-HD1000E -- as well as several other entry-level products -- contributed to pro camcorder sector growth in 2008. With new products from Panasonic and JVC due for release in the first half of 2009, further market activity is ensured.
"As the price of broadcast quality hardware continues to decrease, professional video production has become available to a wider audience," says Cox.
"In particular, the prosumer segment has grown significantly over recent years and accounts for almost 30 percent of market volumes; however, the comparatively low cost of products sold into this vertical translates to less than 25 percent of the market in value terms."
The UK continues to be the largest pro camcorder market in the EMEA region, followed by Russia, France and Germany. As a whole, Western Europe commands 65 percent of the EMEA marketplace, with the remainder shared almost equally between Eastern Europe and Middle East/Africa.
HD functionality dominates the market across all these territories, with more than 75 percent of pro camcorders shipped in 2008 capable of shooting in HDV or better. However, the versatility of many of these products means that much footage is still shot in SD.
Moving forward, HD and non-tape segments will continue to drive the market, and as more programs are broadcast in HD the demand for full-HD camcorders for use as backup will grow, allowing HD to fuel market growth for a second time.
"In 2008 we saw the development of a pure non-tape pro camcorder segment at the lower end of the market -- a significant milestone for the industry and a core driver for last year's phenomenal growth," says Adam Cox, Senior Market Analyst, Futuresource Consulting.
The huge success of the low-cost Sony HVR-HD1000E -- as well as several other entry-level products -- contributed to pro camcorder sector growth in 2008. With new products from Panasonic and JVC due for release in the first half of 2009, further market activity is ensured.
"As the price of broadcast quality hardware continues to decrease, professional video production has become available to a wider audience," says Cox.
"In particular, the prosumer segment has grown significantly over recent years and accounts for almost 30 percent of market volumes; however, the comparatively low cost of products sold into this vertical translates to less than 25 percent of the market in value terms."
The UK continues to be the largest pro camcorder market in the EMEA region, followed by Russia, France and Germany. As a whole, Western Europe commands 65 percent of the EMEA marketplace, with the remainder shared almost equally between Eastern Europe and Middle East/Africa.
HD functionality dominates the market across all these territories, with more than 75 percent of pro camcorders shipped in 2008 capable of shooting in HDV or better. However, the versatility of many of these products means that much footage is still shot in SD.
Moving forward, HD and non-tape segments will continue to drive the market, and as more programs are broadcast in HD the demand for full-HD camcorders for use as backup will grow, allowing HD to fuel market growth for a second time.
Thursday, April 02, 2009
Outside Plant and Broadband Public Policy
Here's some interesting insights from the Digital Britain interim report. The civil engineering work required to deploy next-generation access (NGA) infrastructure is a significant part of the business case for a major broadband deployment project, and some estimates put it as high as 80 percent of the overall cost.
Although it is not the only remedy, providing access to existing ducts, and therefore reducing the cost of deploying fiber for Communication Providers (CPs), is one solution that may lower the barriers to entry for CPs, and therefore support meaningful service provider competition.
Ofcom commissioned Analysys Mason to survey a number of UK cities and towns to assess the level of occupancy of the telecoms duct infrastructure, and to investigate the practical issues that CPs may face if deploying new fiber cables -- using the incumbent service provider's existing infrastructure.
The main objective of the survey was to make an indicative assessment of the duct infrastructure to help Ofcom determine whether or not duct access was a viable option in the UK for CPs to deploy new fiber cables in access and backhaul networks.
The key conclusions of their study are:
- Just over half of the duct ends surveyed have at least 42 percent of unoccupied space, 22 percent of surveyed duct-ends were full, and 26 percent of surveyed duct-ends were empty.
- Unoccupied space in the duct infrastructure network is not evenly distributed across the different sections of the network, and is more likely to be congested in the access part of the network than in the backhaul network.
- Unoccupied space in the duct infrastructure network is not evenly distributed across the different towns/cities, and cities where recent civil engineering work was carried out are more likely to have more available space.
- Unoccupied duct-end space will not directly translate into usable duct space for a CP willing to use the ducts, for a number of related reasons -- explained in the report.
Although it is not the only remedy, providing access to existing ducts, and therefore reducing the cost of deploying fiber for Communication Providers (CPs), is one solution that may lower the barriers to entry for CPs, and therefore support meaningful service provider competition.
Ofcom commissioned Analysys Mason to survey a number of UK cities and towns to assess the level of occupancy of the telecoms duct infrastructure, and to investigate the practical issues that CPs may face if deploying new fiber cables -- using the incumbent service provider's existing infrastructure.
The main objective of the survey was to make an indicative assessment of the duct infrastructure to help Ofcom determine whether or not duct access was a viable option in the UK for CPs to deploy new fiber cables in access and backhaul networks.
The key conclusions of their study are:
- Just over half of the duct ends surveyed have at least 42 percent of unoccupied space, 22 percent of surveyed duct-ends were full, and 26 percent of surveyed duct-ends were empty.
- Unoccupied space in the duct infrastructure network is not evenly distributed across the different sections of the network, and is more likely to be congested in the access part of the network than in the backhaul network.
- Unoccupied space in the duct infrastructure network is not evenly distributed across the different towns/cities, and cities where recent civil engineering work was carried out are more likely to have more available space.
- Unoccupied duct-end space will not directly translate into usable duct space for a CP willing to use the ducts, for a number of related reasons -- explained in the report.
Wednesday, April 01, 2009
Broadband & Multichannel TV Subscriptions
Informa Telecoms & Media published the latest market study results from broadband and multichannel TV subscription numbers. Fiber-to-the-x subscriptions approach 50 million, and IPTV advances to 20 million.
According to current research, global fixed broadband subscriptions stood at 422 million at the end of 2008, adding nearly 68 million subscriptions in the year and 16 million in the final quarter.
The biggest access technology remains DSL (65 percent of the total), but FTTx (11 percent) registered its biggest in year gain to date, adding over 11 million subscriptions -- almost exactly the same number as cable broadband (21 percent) -- now stands over 48 million.
The growth of FTTx is part explained by robust growth in Asia-Pacific: the region added 20 percent more subscriptions in 2008 than in 2007. In addition, nine of the world's 10 largest FTTx operators are in the region.
Western Europe has seen broadband growth stagnate, as all but five of its 30 countries now exceed a household penetration level of 50 percent and 20 countries enjoy penetration of over 60 percent.
China, where broadband subscriptions grew by 21 percent over 2008 to reach 82 million subscriptions, passed the USA mid-year to become the world's largest fixed broadband market, though it still has a household penetration level of below 20 percent.
The IPTV total stood at 19.96 million at the end of 2008. Even by the standard of its own past record, growth was steady but not spectacular, registering net additions of 7.5 million. What is significant is the fact that of the four main multichannel TV platforms, IPTV and digital terrestrial (DTT) are increasing their share of the market and now hold 10 percent and 3 percent of the global market, respectively.
Julian Herbert, Principal Analyst at Informa Telecoms & Media said, "It is a fair observation that IPTV has not made the sort of inroads into broadband homes which operators might have expected, but it is wrong to declare that the concept is doomed to fail."
In markets where the bandwidth is available and the marketing and pricing are attractive, IPTV is attracting big volumes of new customers and helping operators to improve retention rates and increase fixed line ARPU.
Look at operators like AT&T -- with over 800,000 net adds in 2008 -- or Free and France Telecom in France, PWCC in Hong Kong or Portugal Telecom: all are growing their market shares strongly in competitive pay-TV markets.
According to current research, global fixed broadband subscriptions stood at 422 million at the end of 2008, adding nearly 68 million subscriptions in the year and 16 million in the final quarter.
The biggest access technology remains DSL (65 percent of the total), but FTTx (11 percent) registered its biggest in year gain to date, adding over 11 million subscriptions -- almost exactly the same number as cable broadband (21 percent) -- now stands over 48 million.
The growth of FTTx is part explained by robust growth in Asia-Pacific: the region added 20 percent more subscriptions in 2008 than in 2007. In addition, nine of the world's 10 largest FTTx operators are in the region.
Western Europe has seen broadband growth stagnate, as all but five of its 30 countries now exceed a household penetration level of 50 percent and 20 countries enjoy penetration of over 60 percent.
China, where broadband subscriptions grew by 21 percent over 2008 to reach 82 million subscriptions, passed the USA mid-year to become the world's largest fixed broadband market, though it still has a household penetration level of below 20 percent.
The IPTV total stood at 19.96 million at the end of 2008. Even by the standard of its own past record, growth was steady but not spectacular, registering net additions of 7.5 million. What is significant is the fact that of the four main multichannel TV platforms, IPTV and digital terrestrial (DTT) are increasing their share of the market and now hold 10 percent and 3 percent of the global market, respectively.
Julian Herbert, Principal Analyst at Informa Telecoms & Media said, "It is a fair observation that IPTV has not made the sort of inroads into broadband homes which operators might have expected, but it is wrong to declare that the concept is doomed to fail."
In markets where the bandwidth is available and the marketing and pricing are attractive, IPTV is attracting big volumes of new customers and helping operators to improve retention rates and increase fixed line ARPU.
Look at operators like AT&T -- with over 800,000 net adds in 2008 -- or Free and France Telecom in France, PWCC in Hong Kong or Portugal Telecom: all are growing their market shares strongly in competitive pay-TV markets.
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