Rise in Global Adoption of GSM-based Mobile

3G Americas announced that GSM-HSPA is expected to reach 4 billion mobile connections worldwide in September 2009. This marks a major milestone for the wireless communications industry.

"Automobiles and telephones, followed by televisions and personal computers, have undeniably changed the world and have greatly shaped the way in which we live our lives," said Chris Pearson, President of 3G Americas.

"Wireless mobile telephony substantially exceeds the impact of any one of these major innovations. In some countries, wireless penetration levels are exceeding 100 percent. Not only people, but machines, are connected through GSM technology, available today on nearly 800 networks in 219 countries worldwide."

In the Americas region the adoption of the 3GPP evolution from GSM to HSPA grew by more than 19 percent in the year ending June 2009 (2Q) to 561 million subscribers with a market share of 72 percent. Globally, GSM-HSPA grew by 20 percent adding nearly 645 million new connections in the same 12 months.

3G subscribers for UMTS-HSPA captured an annual worldwide gain of 57 percent in the year ending June 2009, according to Informa Telecoms & Media. With 377 million subscriptions worldwide at the end of second quarter 2009, UMTS-HSPA added more than 137 million new connections in 12 months.

The Latin America and Caribbean region continues to experience growth. At the end of second quarter 2009, CDMA mobile technologies saw a decline in subscriptions while GSM technologies grew at an annual rate of 22 percent to more than 433 million connections with a 90 percent share of market.

There are 49 UMTS-HSPA networks commercially deployed throughout 24 countries in Latin America and the Caribbean. Worldwide, 277 commercial networks offer HSPA in 116 countries. Additionally, 11 networks have been upgraded to HSPA+.

According to Informa, by the year 2012, UMTS-HSPA will reach a milestone of one billion subscribers.

Newspaper's Secret Appeal, the Advertising

eMarketer reported that more than 70 million U.S. consumers visited newspaper Websites in June 2009, giving the category an active reach of 35.89 percent, according to the latest market study by Nielsen Netview.

"The newspaper audience continues to expand as publishers aggressively capitalize on their investments in digital properties, adding robust features and launching new products to attract a highly valuable consumer audience,” said John F. Sturm, president and CEO of the Newspaper Association of America (NAA).

Because of changes in methodology, Nielsen's figures for June 2009 may not be directly comparable to data from previous years. All the same, Editor & Publisher reported some dramatic gains and losses in time spent at particular newspaper Websites.

Time spent at The New York Times site, for example, fell by nearly 50 percent from June 2008 to June 2009. People spent more time at the sites of the Chicago Tribune and USA TODAY and at Boston.com, by comparison.

The NAA reported that newspaper online advertising revenues fell 13.4 percent in Q1 2009 compared with the previous year. That is much better, however, than the combined drop of 28.3 percent that newspapers saw in print plus online revenues in the same period.

Regardless of the doom and gloom, some are optimistic. Borrell Associates predicts newspaper advertising will be down this year, followed by a 2.4 percenet rebound in 2010. The firm projects further single-digit increases over the next several years.

The biggest growth will be in local print, which Borrell forecasts will hit $10.1 billion in 2014, a 13.4 percent increase over this year.

The NAA and MORI Research results offer puzzling insight -- and it's nothing to do with News. Their study found that newspapers were most likely the primary medium for checking advertising; about 41 percent of those polled. That put them 20 percentage points ahead of the Web.

When you consider the few who still buy newspapers, perhaps this actually makes sense.

The market study also found the following:

- 59 percent of adults who read newspapers said they used them to help plan shopping or make purchase decisions.

- 82 percent reported taking action as a result of newspaper advertising, including clipping a coupon (61%), buying something (50%), visiting Websites to learn more (33%), trying something for the first time (27%), and 73% regularly or occasionally "read" newspaper inserts.

Update: MediaWeek's editorial offers a different perspective of the NAA spin -- "Newspapers have been getting more of their revenue online, but it hasn't been nearly enough to offset the ad sales that have gravitated away from their print editions."

Broadband: Why Asia Leads and U.S. Lags

The U.S. federal government has received nearly 2200 applications requesting nearly $28 billion in stimulus funding for proposed broadband projects. The National Telecommunications and Information Administration and the Rural Utilities Service will pick the winning applicants and announce them in November.

The sobering reality, even if all those applications were approved and funded (clearly, they won't be with only $4 billion available), America would still be a distant laggard in the Global Networked Economy, when compared to the recognized market leaders worldwide.

"The future of broadband is clearly in fiber," according to analyst, Ben Piper, Director of the Strategy Analytics. "The existing Telco xDSL infrastructure is reaching the end of its useful life. Soon it will no longer be able to support increasingly bandwidth-heavy consumer applications."

Rankings just released by Strategy Analytics show that eight of the world's top-ten most fiber broadband-enabled countries are Asian and Eastern European. At the end of 2009, 51 percent of South Korean households will have a fiber optic connection to the Internet, making it the most fiber-connected country worldwide.

Japan, Hong Kong, Taiwan and Lithuania round out the top-five in the rankings. What seperates the market leaders from the followers? Meaningful broadband public policy and substantive government investment are deciding factors.

Singapore will overtake South Korea for the number one position by 2013, according to Strategy Analytics. Part of the Singaporean government's iN2015 initiative is the construction of a 1 Gbps Fiber-to-the-Premises (FTTP) network, currently underway, with mandated 100 percent coverage by January 1, 2013.

Likewise, Australia, which this year launched its $31 billion National Broadband Network (NBN), will catapult from 21st to 8th place worldwide by 2013, according to the Strategy Analytics assessment. The government-backed FTTP based solution aims to deliver 100 Mbps FTTP service to 90 percent of Australian households, schools, and businesses over the next eight years.

Strategy Analytics "Global Broadband Forecast: 1H'09" provides coverage of 60 countries in five discrete regions, and profiles a history and forecasts for the key metrics. Currently, the U.S. is ranked #14 in the list of fiber broadband-enabled countries, just behind United Arab Emirates.

Europe's Hybrid Broadcast-Broadband TV

A consortium of European TV industry leaders announced "Hybrid Broadcast Broadband TV" (HbbTV), a major new pan-European initiative aimed at combining the broadcast and broadband delivery of news, information and entertainment to the end consumer through TVs and set-top boxes with a Web connection.

The cross industry consortium includes broadcasters Canal+, France Televisions, and TF1, German research institute Institut für Rundfunktechnik, satellite operator SES ASTRA, as well as the software and media solutions providers ANT and OpenTV.

The HbbTV specification was developed by industry leaders to effectively manage the rapidly increasing amount of available content targeted at today's end consumer. It is based on elements of existing standards and web technologies including OIPF (Open IPTV Forum), CEA, DVB and W3C.

HbbTV products and services will provide the consumer with a seamless entertainment experience with the combined richness of broadcast and broadband. This entertainment experience will be delivered with the simplicity of one remote control, on one screen and with the ease-of-use of television.

Through the adoption of HbbTV, consumers will be able to access new services from entertainment providers such as broadcasters, online providers and CE manufacturers -- including catch-up TV, video on demand (VoD), interactive advertising, personalization, voting, games and social networking as well as program-related services such as digital text and EPGs.

HbbTV products and services will be developed for all broadcasting technologies including satellite, cable and terrestrial networks. Apparently, the first satellite demonstrations were demonstrated at IFA and IBC 2008.

Green Mobile Base Stations in Rural Sites

The number of worldwide mobile phone base stations has grown from the hundreds of thousands to the many millions, creating greenhouse gases and pollution from the power required to run them, according to the latest market study by In-Stat.

Mobile base stations on an electric grid aren't the real problem, but as cellular spreads to billions of people in emerging countries, off-grid base stations, which are usually powered by diesel generators running 24/7, seem to proliferate.

"While diesel pollution is an environmental issue, what bothers mobile operators the most is the real cost of powering and securing the generators," says Allen Nogee, In-Stat analyst.

Diesel fuel has to be trucked to remote rural sites, and theft of diesel fuel and equipment can cost operators millions of dollars. The solution is for operators to at least partially power remote base stations with wind turbines, solar panels, or both. This is truly a case where it pays to be Green.

In-Stat's market study found the following:

- By 2014, over 230,000 cellular base stations in developing countries will be solar-powered or wind-powered.

- The number of off-grid base stations is growing at 30 percent per year.

- Off-grid base stations are primarily located in Africa, South Asia (including India), South America, Latin America, and the Caribbean.

397 Million Mobile Video Phones, by 2013

The mobile video services upside is limited to a few successful deployments in advanced markets, like the Asia-Pacific region. Elsewhere, the situation is somewhat unpredictable.

Though video-capable phones continue to become more widely available, subscriber uptake of pay-TV services (not free-to-air video broadcast) continues to disappoint.

A combination of poor macroeconomic conditions, sub par 3G network coverage for streamed video services, and pricing that puts mobile video services out of reach for many consumers is contributing to the lackluster growth of mobile video services around the world.

"While mobile video services are expected to eventually grow significantly, until operators combine broadcast, on-demand, and side-loading, revenue will remain a drop in the bucket of overall mobile service revenue," explains Jeff Heynen, directing analyst for broadband and video at Infonetics Research.

The Infonetics market study found the following:

- They expect 397 million mobile video phones to sell worldwide in 2013, creating a market worth tens of billions of dollars.

- Asia-Pacific is the mobile video titan, with the highest volume of mobile video phone sales.

- One primary driver for mobile video adoption is access to live sporting events, particularly soccer, cricket, and motor sports.

- Nokia leads in worldwide DVB-H phone revenue market share.

- Broadcast mobile video content delivered using the Chinese Multimedia Broadcast (CMMB) standard is already reaching 1 million users.

- With an addressable market of hundreds of millions of phones, CMMB will become the world's leading broadcast mobile video technology in the long run.

- The number of mobile video subscribers hit 41 million worldwide in 2008 and is expected to grow to nearly 10-fold by the end of 2013.

Mobile Data Services Still Priced Too High

A recent survey by ABI Research within the U.S. market, of 1000 consumers, defined the current attitudes about cellular modems. It includes one significant result that should grab the attention of mobile phone service operators.

The high-priced subscription still limits increased service adoption.

Cellular modems enable laptop computers -- and devices such as netbooks, e-readers, PNDs and digital cameras -- to access the Internet. Typical cellular modem users currently pay $50-$60/month for mobile data services from service providers.

Respondents who don't currently own cellular modems but are interested in them, however, place a significantly lower value -- somewhere between less than $10 and $30/month -- on that mobile data service.

"Over 47 percent of U.S. survey respondents had at least some interest in cellular modems and their willingness to pay for mobile data service is at half of current market prices," notes senior analyst Jeff Orr.

In the U.S. at least, consumers want a mobile data service costing no more than their home broadband access.

Part of the reason for this is that developed telecommunications markets are more likely to add a cellular modem in addition to their fixed Internet access rather than as a replacement.

Another consideration is that high-speed mobile broadband networks are not ubiquitous -- only certain regions and locations (those offering newer 3G or 4G data networks) presently have coverage, but that may improve over time.

While subscription plan cost is predicted to fall, there is a trade-off with the still less-than-perfect capacity of the networks.

"Could operators say we'll give you mobile broadband performance for $39 a month?" Orr asks. "Yes; but will they be able to deliver on that promise?" We'll have to wait and see.

Growth in Word-of-Mouth Marketing Influence

In its latest market assessment, eMarketer predicts an 8.2 percent decline in U.S. total media advertising spending in 2009, after a 3.6 percent decrease last year.

However, some channels continue to grow -- including word-of-mouth marketing. According to PQ Media, much this growth is due to the rise of new media channels, such as blogs, social networks and other social media sites.

The research firm also found that U.S. word-of-mouth marketing spending on online communities increased 26.6 percent in 2008 to $119 million.

After 37.6 percent compound annual growth from 2003 to 2008, PQ Media predicts total U.S. word-of-mouth marketing spending will continue growing. They estimate an increase of 14.5 percent compounded annually between 2008 and 2013.

Total word-of-mouth marketing spending for 2009 is estimated at more than $1.7 billion, a 10.2 percent year-over-year increase.

Consumer goods firms were the biggest spenders on word-of-mouth marketing in 2008, with a 17.4 share of the total. The food and beverage industry contributed 12.2 percent of spending. Other shares were typically below 10 percent.

Among U.S. Internet users who bought a product based on an Influencer recommendation, 34 percent said that guidance came from a friend or relative. One-quarter followed the advice of a spouse or partner.

In other research, B2B buyers tend to follow the guidance of business associates and recognized sources of qualified influence from independent blogs and groups or communities of interest on professional social networks.

Need to monitor social media but lack the budget for fee-based services? Visit my updated FREE social media tools list and do-it-yourself at no cost.

Content Delivery Network Services Upside

Over the next five years, the worldwide value of Content Delivery Network (CDN) services will pass $2 Billion annually by 2011 and continue growing thereafter, according to the latest market study by In-Stat.

Growth in CDNs is a result of increasing usage of over-the-top internet video, as well as their flexibility to manage content for delivery through multiple delivery channels to multiple device types.

"Over the coming years, In-Stat believes that Data Centers and CDNs will become the dominant approach for sourcing everything on demand," says Gerry Kaufhold, In-Stat analyst.

This will not only enable owners and creators to have more control over their creations, but also provide viewers with more choices in programming and delivery methods.

The question on my mind -- will broadband service providers actively pursue this opportunity to create a two-sided business model, where they offer content owners new hosting services?

In-Stat's market study found the following:

- Adaptive Bit Rate Video approaches will permit IP-networks to deliver a quality User Experience at lower bit rates.

- The North American market will remain the dominant geographic segment for CDNs through 2013. However, Europe and Asia Pacific will see significantly higher growth rates.

- In-Stat believes addressable advertising holds out the promise of a much more efficient use of advertising spending, but all segments of the ecosystem need to participate in the revenues to justify the infrastructure investments that must be made.

OTT and the Internet Set-top Box Opportunity

The latest global market study by MRG demonstrates how Over-the-Top (OTT) video services may offer new opportunities for Pay-TV providers to expand their reach through TV-centric "open" Internet services.

Is this the beginning of the end for walled-garden (closed) Pay-TV services? Well, that depends on your point of view, and perhaps if and when the CE manufacturers can bring new and improved Internet Video-Ready television sets to market.

Revenues in 2012 should exceed $11 billion, with Internet Set-top Box (ISTB) penetration (including game consoles) exceeding 57 million. Besides cost containment practices, MRG identified what kinds of OTT video content consumers want (and will pay for), based on a global consumer survey.

"The real question isn't whether Pay-TV Service Providers (SPs) should implement OTT, as most analysts already agree (they should)," says MRG Analyst Mike Galli.

"The real question is how and with what results, which is why we did a ROI analysis for Tier-1, 2 and 3 IPTV SPs explaining the best practices, cost-loading and break-even points for several different configurations of OTT service."

The MRG report also disputes the belief that smart TVs (TVs with Ethernet ports and Web browsers) will replace ISTBs in the next five years -- as predicted by some Consumer Electronics (CE) pundits.

"ISTBs will continue to be strong players beyond 2015," states MRG President Gary Schultz. "This is illustrated by the evolutionary path ISTBs must follow to stay ahead of the fast changing OTT business."

The MRG report further asserts that many HD (High-Definition) TVs will rely on (external) ISTBs to provide the needed storage, hybrid-processing, progressive download, and EPG-processing capability at an affordable price to deliver HD content.

New 3D Applications for CE Digital Projectors

Global sales of digital projectors were slow in the first half this year. Global Q2 volumes reached nearly 1.3 million units, representing a 16 percent year-on-year drop from Q2 2008, according to the latest market study by Futuresource.

With buyers continuing to hold back on spending, the corporate sector is expected to remain relatively flat for the rest of the year. However, the education market continues to offer strong growth opportunities, with budget levels remaining relatively unaffected.

To underline this point, Q2 sales of interactive whiteboards have grown by 35 percent year-on-year, reaching 180,000 units globally. The second half of 2009 is expected to experience numerous large RFPs, with many emerging countries seeking to invest in IT for their education infrastructures.

While overall market volumes have been weak, some bright spots include the continued emergence of the short throw and Wide XGA categories. With many whiteboard vendors now offering all-in-one board and projector combinations, the short throw solution is proving popular with end users and now represents 10 percent of the market.

The W-XGA category also continues to gain traction as corporate customers increasingly seek to pair the resolution of notebook computers and projectors. W-XGA reached 6 percent of the market in Q2, representing nearly 130 percent year-on-year growth.

High brightness LED based projectors targeting the business to business market are widely expected to have a significant market impact due to the long lifetime and low cost of ownership, perfect for applications such as education, where maintenance costs can be significant.

One of the hot topics in the electronics industry at present is 3D. With 3D movie production intensifying and 3D titles having an encouraging effect on box office revenues the entertainment and consumer electronics industry are keen to drive 3D into the home.

Projectors are in a strong position to take advantage of this roll out of 3D in the home as the consumer experience of 3D viewing is likely to only be enhanced the larger the picture displayed.

One of the other hot products in the projectors market is the new category of Pico Projectors -- tiny battery-powered projection devices. With the portable form factor, low price points and a high flexibility of usage, these products are perfect companion devices for a wide variety of mobile products.

New USB SuperSpeed for Multimedia Devices

With over three billion devices shipped in 2008 alone, USB is the most successful electronic device interface ever, according to the latest market study by In-Stat.

Fueled by new SuperSpeed technology, also known as USB 3.0, and continued adoption across computing, communication and consumer devices, over 4 billion USB-enabled devices will ship in 2013 -- representing a 6.6 percent compound annual growth rate (CAGR) compared to 2008.

Highlights from the In-Stat study include:

- Digital TVs with USB will grow to 140 million units shipped in 2013.

- USB-enabled LCD PC monitors will grow to about 70 million units, propelled by a CAGR of over 150 percent.

- Blueray DVD players with USB will see a CAGR of over 90 percent.

These growth segments will complement the enormous volume of markets such as handsets, where internal USB capability can be found in more than 1 billion units shipped annually, and where USB ports are becoming much more common.

"USB dominates its traditional applications while simultaneously spreading into new applications," says Brian O'Rourke, In-Stat analyst.

SuperSpeed USB silicon vendors hope to open up the number of applications, hence increasing the potential for device interaction and enlarging the USB ecosystem.

Global Entertainment Video Ad Server Market

Revenue from the global advertising server market will reach nearly $185 million in 2013. At $79 million North America represents, by a significant margin, the largest regional market for video ad servers with the runner-up, Asia-Pacific, expected to deliver about $55 million in the same year.

The resulting data are part of new additions to the latest ABI Research video-on-demand market study. New to the report are sections dealing with ad servers and ad splicers.

"Video-on-demand has always been a killer app," says industry analyst Zippy Aima. "But the new driver for this market is consumer desire for more interactivity and more flexibility in what they can do with their video content. Start-over TV, catch-up TV, and similar features are the new benchmarks for VOD uptake."

Broadcast continues to dominate the overall market, followed by cable and telco offerings. Although slightly slowed by the recession, growth in all segments has continued at a relatively steady pace.

"It's not that vendors aren't seeing demand for or implementation of the technologies," Aima notes. "We are, after all, talking about television entertainment."

Nonetheless this is a very competitive market, with many vendors. Differentiation is about feature-sets, but budgets for upgrading content delivery platforms have shrunk.

Aima would not be surprised to see some consolidation in the market over time. There is room for acquisitions because there are so many players in the market. On one hand that's good because it fosters competition and innovation, but on the other it limits the market available to each.

We may not only see bigger vendors absorbing smaller ones, but also non-video-server vendors moving to add video server offerings to their portfolios.

Significant Upside for U.S. Mobile Advertising

eMarketer estimates there will be 280.8 million U.S. mobile phone subscribers by year-end 2009. In contrast, comScore Mobile estimates a slightly lower 233 million, including 29 million smartphone users.

Theoretically, that amounts to more than 200 million targets for mobile advertisements -- a medium projected by eMarketer to reach $760 million in spending in 2009.

In 2013, the market will reach $3.3 billion -- based upon double-digit yearly growth. But, according to the report from comScore Mobile, some types of advertisers are doing a better job of capitalizing on this trend than others.

In April 2009, broadcasting and cable TV, movies and entertainment, and automobile manufacturing were the leading industries using mobile advertising.

Over the past year there's also been more promotion of traditional industries like personal products, apparel, packaged foods and food retail. Certain industries are also seeing great success monetizing their mobile ads.

Downloads, real estate, services and search pages each had 100 percent of their mobile ad inventory paid for. However, struggling with monetization were home and family, health and business information companies.

Only one-fifth of all mobile inventory are house ads. The supply and demand dynamic is reminiscent of the early Internet. That could result in a significant upside for the future of U.S. mobile advertising.

Oxymoron: Easy-to-Configure Home Networks

Are your home network device connections easy and seamless? Not to worry, neither are mine. That said, a growing number of digital media devices for home entertainment are receiving DLNA (Digital Living Network Alliance) certification.

According to a new study from ABI Research, nearly 200 million such products shipped in 2008 -- that number will rise to more than 300 million in 2012, and the growth curve accelerates even faster in the years that follow.

"Consumers increasingly desire ways to connect their various home entertainment devices and distribute digital media content around their homes," says digital home practice director Jason Blackwell.

Without standardization, that is a nightmare. Specifications developed by the DLNA, which are based on the UPnP (Universal Plug and Play) standard, supposedly enable easy, seamless connections in a wide and growing range of consumer electronics devices.

As of today, more than 5,500 devices have received the DLNA "seal of approval." Digital TVs are a huge part of this growth, with more than 170 TVs certified in the first six months of 2009 alone.

Blackwell expects the inclusion of DLNA support in the upcoming Windows 7 operating system to give DNLA a further push into the living room and beyond.

"You could, for example, use a computer running Windows 7 to push a sequence of stored photos out to a digital picture frame," he says. "Much of this new Windows functionality will be implemented through the new version of Windows Media Player, which will have a Play-to command, allowing the user to choose among several DLNA-networked playback devices to display a particular video or other media file."

Windows 7 is scheduled to make its public debut in October.

The next phase of this developing market will see increased participation by broadband service providers, with set-top boxes and gateways becoming an important part of the home network.

Worldwide and U.S. Internet Ad Spend Report

Worldwide spending on Internet advertising contracted for the second consecutive quarter, by 5 percent, to $13.9 billion from $14.7 billion in the same quarter a year ago.

IDC's Worldwide and U.S. Internet Ad Spend Report 2Q09 found that all global regions posted losses, with the exception of the Asia-Pacific region and Japan, which saw slight gains in the second quarter (2Q09).

U.S. spending also declined for the second quarter in a row, by 7 percent year over year, to $6.2 billion from $6.6 billion.

In the United States, all major advertising formats saw year-over-year revenue losses, with search ads being least affected, display ads losing 12 percent, and classifieds shrinking 17 percent.

All major publisher ad sales declined, for the most part at double-digit loss rates, with Google being the only exception, posting low single-digit growth.

Worst affected were Monster.com with a 31 percent decline, suffering from the terrible condition of the classifieds business in the current downturn, and AOL, hit by both the weakness in display ads as well as internal sales problems.

For the coming quarters, there is good news and bad news. The bad news first: Given the 2Q09 numbers and the outlook provided by media companies such as Yahoo!, IDC expects U.S. advertisers to decrease their online spending quarter over quarter in 3Q09 by about the same amount as they did in the first and second quarters of 2009.

The good news: It seems like things are not going to get any worse in the Internet ad industry.

"We think the industry will continue to see losses in the third and fourth quarters, but the growth rates -- or the loss rates -- will eventually begin to improve. However, we also believe the industry may have to wait until mid-2010 until it sees real growth again," said Karsten Weide, program director at IDC.

Exabyte Era Driven by Mobile Device Data

In 2014, the volume of mobile device data sent and received every month by users around the world will exceed -- by a significant amount -- the total data traffic for all of 2008, according to the latest market study from ABI Research.

"When people think of mobile data they think of BlackBerry and iPhone handsets," says senior analyst Jeff Orr. "But the bulk of today's traffic is generated by laptops with PC Card and USB modems."

While add-on cellular modems represented two-thirds of traffic in 2008, computers with embedded 3G or 4G modems will lead in 2014 -- with more than 50 percent of the world's mobile data traffic.

Key findings from the ABI study include:

- Global mobile data traffic surpassed 1.3 Exabytes transferred during 2008. By 2014, an average of 1.6 Exabytes will be sent and received monthly.

- Nearly 74 percent of the world's mobile data traffic will be from Web and Internet access by 2014.

By the same time, 26 percent will come from audio and video streaming. Peer-to-peer file sharing and VoIP contribution to overall mobile data traffic will be less than 1 percent.

- Video streaming will experience the fastest growth of any IP traffic type at a CAGR of 62 percent between 2008 and 2014.

- Western Europe accounted for nearly 31 percent of mobile data traffic in 2008, but the region will yield to Asia-Pacific, which will account for over 28 percent, by 2014.

"The launch of 4G services promises even more data capability -- full multimedia on a greater number of devices," notes Orr.

But it's a more pragmatic approach than 3G: data-centric devices will be adopted first, rather than a large number of phones. As network coverage and service plans satisfy market expectations, a variety of specialized consumer electronics devices with the ability to connect anywhere will emerge.

An Uncertain Outlook for TV Set-Top Boxes

Each of the major set-top box (STB) segments -- including Cable, Satellite, DTT and IPTV -- faces widely different outlooks, according to the latest market study by In-Stat.

Satellite, the largest of the STB segments, experienced a 6 percent growth in 2008, bolstered by triple-digit growth in the Asia-Pacific region. Unit growth is likely steady for 2009 and 2010.

The cable STB market grew 8 percent in 2008 to nearly 45 million units. However, growth in 2009 looks to turn negative in this mature market.

The nascent IPTV STB market grew 55 percent in 2008, but similar growth will not continue. With few new telco TV deployments, unit shipments of IP STBs will experience a marginal increases in 2009 and 2010.

Digital terrestrial (DTT) STBs grew at 200 percent in 2008, driven by high-definition (HD) converter boxes supporting the U.S. analog broadcast TV transition to digital. But, these shipments represent an unsustainable upside. Growth will fall back to 23 percent in 2009 and then will contract by nearly 30 percent in 2010.

Across the STB markets, personal video recorders (PVRs) and a transition to HD are among the major technology drivers. Global PVR unit shipments (across all STB types) exceeded 25 million in 2008, an increase of 14 percent over 2007.

Perhaps hybrid OTT video STBs will experience greater demand. It's currently unclear.

In-Stat's study highlights include the following:

- Multi-room or whole-home PVR service has become available in an increasing number of cities in the U.S. over the last year.

- HD Satellite STBs will comprise 18 percent of total unit shipments in 2009.

- The semiconductor opportunity in standard definition (SD) DTT STBs will peak in 2011 at nearly $500 million.

Personal Media Player World Market Matures

As the worldwide media player market matures, with shipment growth of only 5 percent in 2009, competitors are scrambling to add features such as touchscreens and Wi-Fi connectivity to re-ignite demand, according to the latest In-Stat market study.

Just a few years ago, the Personal Media Player (PMP or MP3) player market was among the strongest growth segments in the portable consumer electronic (CE) industry.

Today, the market is stalled due to weak consumer demand, a poor economic environment, a stalled replacement market, and competition from the iPhone and other audio/video-capable smartphones.

"Among the lone bright spots in the PMP market is Wi-Fi enabled PMPs," says Stephanie Ethier, In-Stat analyst. "Unit shipments of Wi-Fi-enabled PMPs will grow more than four-fold by 2013 from the 14 million units shipped in 2008."

In-Stat's market study found the following:

- Total worldwide shipments of PMP players will reach 225 million in 2009, with Asia Pacific representing the largest geographic market.

- The market is decidedly shifting to video-enabled (multimedia) devices. By 2013, only 15 percent of PMP players will be audio-only devices.

- Among the key PMP competitors are: Apple, Archos, Creative Technology, iRiver, ZVUE Corporation, Microsoft, SanDisk, Samsung, and Toshiba.

- The total semiconductor opportunity for PMP/MP3 player suppliers has peaked and will decline below $5 billion by 2013. NAND Flash and Video processors make up the majority of semiconductor revenue.

- Among the key PMP Semiconductor competitors are: Actions Semiconductor, NVIDIA, Texas Instruments, Toshiba Semiconductor, Freescale Semiconductor (SigmaTel).

Few Monitor, Measure Social Media Marketing

U.S. marketers are "willing" to start a conversation about their brands through social media -- some actually follow-through and do it. But, that's only the beginning of their digital marketing intent, according to a recent eMarketer assessment.

In late 2008, MarketingSherpa surveyed social media marketers about the effectiveness of their practices. Large majorities rated social media marketing effective at influencing brand reputation, increasing awareness and improving search rankings and web site traffic.

Social media was considered less effective, but still useful, for internal communications and driving online sales.

Marketers thought the best specific tactics were user reviews, relationships with bloggers and discussion groups. But they also found those tactics difficult to measure -- only around 10 percent of respondents thought they were very accurately measured.

While one-third of larger businesses had a written policy to manage brand communications, only 13 percent of smaller business did. Among large businesses, 39 percent had no policy despite recognizing its importance, and 9 percent believed it unnecessary. Three-quarters of small businesses had no written policy.

Around one-quarter of businesses of all sizes reported not monitoring social media commentary at all. Nearly one-half of large businesses kept an eye on discussions -- without responding publicly. Another quarter of all firms attempted to contact the writer of a negative comment.

How Economics Drive Open Source Software

A recent market study from IDC reveals that worldwide revenue from open source software (OSS) will grow at a 22.4 percent compound annual growth rate (CAGR) to reach $8.1 billion by 2013.

This IDC forecast is considerably higher than 2008 for three reasons:

1. the bottom-up list used to calculate the revenue has expanded through an exhaustive effort to include more projects in this forecast.
2. open source software has had a much higher level of acceptance over the past 12 months than previously expected.
3. the economy accelerated the uptake and use of open source software in the closing months of 2008.
   

"The open source software market has seen a strong boost from the current economic crisis," said Michael Fauscette, group vice president, IDC.

OSS is increasingly a part of the enterprise software strategy of leading businesses and is seeing mainstream adoption at a strong pace. As the overall software industry continues to consolidate, it will be key for OSS vendors to reach scale if they plan to continue as a standalone business.

Key findings from the IDC study include:

- Large software vendors like IBM, Sun, Dell, HP, and Oracle are making significant amounts of indirect revenue from their activities with and support of OSS. This has greatly aided mainstream adoption and acceptance of OSS.

- Hybrid business models seem to be increasing. It is likely that this will end up as the most prevalent business model, with on-premise vendors adding SaaS, SaaS vendors offering on premise, OSS vendors selling variants, and closed source vendors offering more OSS.

- The opportunity to leverage OSS in ways that increase competitive advantage, such as a part of BPO offerings or as a part of a software appliance, is on the rise and should help increase adoption and growth for OSS vendors.

Dramatic Increase in Streaming Online Video

Americans with Internet access are streaming more TV shows and movies than ever before. Recent data from an Ipsos market study illustrates that in the past 30 days, 26 percent of online Americans have streamed a full-length TV show and 14 percent have streamed a full-length movie.

This is more than two times the levels measured in September 2008. Not surprisingly, young adults 18 to 24 years of age have been the most ardent supporters of this medium.

What is surprising is just how supportive they are -- in the past 30 days, 30 percent have streamed a full-length movie and 51 percent have streamed a full-length TV show, which represent dramatic increases from last year.

The rapid rise in longer form video streaming can be attributed to the swift growth of many digital video OTT websites since last year. Hulu, in particular, has experienced heightened exposure and visitation, and has helped pioneer the transition to ad-supported free streaming of TV shows and movies.

Now that the ad-supported content model is taking off, content providers will be challenged to monetize their content through alternative fee-based methods given the acceptance of the ad-supported or free model. In addition, content providers will need to understand the appropriate level of advertising that streamers will be willing to tolerate for their content.

"The digital video revolution is no longer centered on short clips via YouTube; it is becoming an important distribution channel where any type of full-length video can be instantly accessed for immediate consumption without a fee," explains Brian Pickens, Senior Research Manager at Ipsos MediaCT.

This is not to say that digital video is replacing the TV. Currently, the average American with Internet access watches 15 hours of television per week, compared to less than two hours on their PC.

Furthermore, even among digital video users, 64 percent would rather watch hour-long dramas and half-hour comedies live on their TV than rent or purchase them, or watch them on their PC or portable device.

Asia-Pac Leads Satellite Set-Top Box Growth

Due to remarkable shipment growth in the Asia-Pacific region -- and particularly India -- the worldwide satellite set top box (STB) market grew in 2008, according to the latest market study from In-Stat.

However, outside of Asia-Pacific and Latin America, regional markets remain sluggish or even negative. Another important trend is the rise of High Definition (HD) Digital Video Recorders (DVRs).

"In-Stat expects HD DVRs to overtake shipments of Standard Definition (SD) DVR boxes in 2009, with some providers no longer offering SD DVR boxes," says Michelle Abraham, In-Stat analyst.

More providers will stop offering them in the future, with some going so far as to eliminate all SD boxes from their product lineup in a few years.

In-Stat's market study found the following:

- The worldwide satellite set top box market grew by 6 percent in 2008, bolstered by triple-digit growth in the Asia-Pacific region.

- Thomson was the largest provider of satellite set top boxes in 2008. Other STB providers include Coship, EchoStar, Homecast, Humax, KAONMedia, Pace, Samsung, TechniSat, and Altech UEC.

- The semiconductor Bill of Materials (BOM) for Satellite STBs ranges dramatically from under $25 to well over $100 depending on advanced features, hard drive size and the number of supported video streams.

- Key semiconductor suppliers include ALi, Broadcom, NEC, NXP, STMicroelectronics and Zoran.

- Network connections are becoming increasingly important to support whole-home DVR services, over the top (OTT) video to the TV, place-shifting, and remote DVR scheduling.

Growth for Multi-Service Access Platforms

Infonetics Research tracks vendor market share and market size for multi-service access platforms (MSAPs) and IP digital subscriber line access multiplexers (IP DSLAMs) in China, India, Japan, South Korea, the rest of Asia Pacific, and the region as a whole.

"The Asia Pacific region represents the largest broadband aggregation hardware opportunity in the world, with China leading the way. The amount of money being spent in China on broadband aggregation equipment is astounding, thanks to a swelling middle class, aggressive national broadband initiatives, and heightened competition among China's newly-restructured telcos to launch premium broadband services and hold on to subscribers," said Jeff Heynen, directing analyst for broadband and video at Infonetics Research.

Although the overall DSL market is shrinking due to the shift from copper to fiber-based PON and Ethernet FTTH, the decline will be slowed by service providers deploying ADSL2+ and VDSL2 to deliver triple play services in China, Taiwan, Singapore, Malaysia, Australia, New Zealand, Vietnam, and Indonesia.

- In China, Huawei and ZTE hold the number-one positions in the IP DSLAM and MSAP markets, respectively, in 2008.

- In the rest of Asia Pacific, Alcatel Lucent leads the IP DSLAM market in 2008.

- In general, there is a more nationalistic approach to vendors in Asia Pacific countries, with service providers often preferring to work with local suppliers.

- Incumbent service providers across Asia Pacific are facing the same loss of land-line revenue as their European and North American counterparts, if not greater, thanks to mobile substitution.

- They are turning to bundled voice, video, and Internet services to retain customers while leveraging their existing assets to drive higher revenue.

A Game-Changer: Wireless Networked TV

As part of the continuing trend towards networked home entertainment, television sets will increasingly include wired or wireless connections to online content. A new study from ABI Research forecasts that in 2011, about 20 million TVs offering wireless connectivity will be shipped worldwide.

This segment is expected to show linear growth through the study's forecast horizon of 2014. Network connectivity does already exist in high-end models, and networked TVs are already quite widespread in Japan (the recognized leading market).

According to industry analyst Michael Inouye, "North America, Western Europe, and select Asian countries are seen as the next growth markets, and the 2009 holiday season and 2010 will be the watershed periods when vendors will see whether networked TV should trickle down to mainstream models and really take off there."

Ethernet will handle the wired type of connection in most cases, but will wireless technology prevail? If it does, the most likely candidate is Wi-Fi, although it's true that 802.11b and 802.11g may suffer some latency and interference problems. 802.11n Wi-Fi should provide a fully capable connection, and its growing adoption will improve support for networked TVs.

Many current TV models are nearly capable of being networked, at least for basic functions. Basic networking often only entails additional memory, Ethernet support at the chip level (and active port), and software -- the hardware component being relatively inexpensive.

What will consumers get with a networked TV? A wide variety of online content to choose from -- including news, weather, sport, material from Internet video sites, music, casual gaming, and social networking.

Any broadcast or cable TV network executive that still believes they will have a captive audience is clearly delusional. The trend is undeniable, independent over-the-top video will gain market share at the expense of traditional media.

Global PC Shipments Better than Expected

As in the first quarter of 2009, global PC shipments again came in slightly ahead of expectations in the second quarter (2Q09), lessening fears over the extent of the PC market slump.

Worldwide PC shipments (including Desktop and Portable PCs, but excluding x86 Servers) were down 3.1 percent from the second quarter of 2008 -- a notable improvement over an expected decline of 6.3 percent, according to a market study by IDC.

All regions either met or surpassed expectations. Although the global downturn is still making its effects felt in the PC industry, the slump has been mitigated by a PC market which has seen the computing experience evolve to be more personal, portable, and cost-oriented rather than performance-driven.

Portable PCs continue to be the primary driver of volume and growth with all regions seeing strong Portable shipments.

"These results are a very positive indicator for the second half of the year," said Loren Loverde, program director for IDC's Tracker Program.

"We are seeing continued demand from consumers and limited impact from supply chain factors such as inventory balancing. New product launches in the second half of the year combined with seasonal growth and greater economic confidence resulting from factors such as government stimulus, a more liquid housing market, relatively stable stock market and interest rates, and progress in the auto and financial industries, should support the expected return to growth by year-end."

While the market has outperformed expectations for a second consecutive quarter, the lack of commercial activity remains a drag on growth. The business user segment remains more conservative with spending, focusing on other priorities and preserving cash.

As a result, the segment has not been as motivated by falling prices and new portable designs as the consumer segment.

Despite continued contraction from a year ago, the U.S. market managed a better-than-average sequential performance -- an indication of a stabilizing or improving market.

While the sequential growth may be a hint of recovery, the market's focus on lower-price PCs and Mini Notebooks is likely to drag the value of the market to lower levels. The market continues to rely on consumer purchases, with a substantial weakness in the commercial space.

IDC expects to see more of the same as we enter the busy shopping season of the second half of the year. In the longer term, an expected recovery in the commercial segment should boost growth in 2011.

Market for Smart Meter Energy Management

With over eight million smart meters already deployed in the U.S., the market for residential energy management (REM) has taken the first significant steps in deploying Smart Grid technologies and advanced meter infrastructure (AMI) on a broad scale, according to the latest market study from Parks Associates.

The international research firm, which recently completed the report Residential Energy Management: Company, Alliance & Technology Profiles, says these deployments will open up significant opportunities for companies in the REM value chain.

Public, private, and consumer factors are all driving this growth, and the Federal stimulus bill, with the support of the Obama Administration, allocates $11 billion for smart grid initiatives through 2010.

"Already over six percent of all U.S. meters are smart meters, and utilities throughout the U.S. are announcing new deployments and pilot programs daily," said Bill Ablondi, home systems research, Parks Associates.

"We completed the Profiles report to analyze current players in this area and how their deployments will impact growth in consumer digital lifestyle device and service categories."

Global Upside for Location Based Services

eMarketer reports that consumers are increasingly using GPS-enabled mobile devices to find local businesses, one another and even their family pets. Apparently, this is all part of the growing upside market opportunity.

Gartner is predicting huge gains for mobile location-based services (LBS) in 2009. The market research firm estimates that total LBS subscribers will more than double worldwide this year -- to 95.7 million.

"The LBS industry has matured rapidly in recent months through a mixture of consolidation, improved price/performance of the enabling technologies and compelling location applications," said Annette Zimmermann, analyst at Gartner.

Worldwide revenues from consumer location-based services were under $1 billion in 2008, but Gartner projects they will top $2.2 billion this year. North America's share will be the largest, at $713.7 million.

Subscriber growth will hinge on free. The competitive landscape will change and most mobile carriers need to alter their approach toward offering LBS and dealing with developers.

Currently, about 10 to 15 percent of users in North America and Western Europe take advantage of free services. The researcher expects that share to climb to between 40 and 50 percent by 2013.

The rise of mobile applications and availability of a wider variety of location-based services will continue to fuel popularity -- and new mobile marketing opportunities. Locally tailored digital coupons will go hand in hand with local search.

Navigation applications are still popular in Europe and North America.