HD Broadcast DTT STBs to Drive the World Market

The broadcast digital terrestrial television (DTT) set-top box market continues to expand, as countries migrate from standard definition (SD) TV to high definition (HD) programs, and digital video recorders (DVR) become a standard feature.

New products like hybrid web-to-TV set top boxes also will contribute to the long-term growth of DTT STBs pushing revenues to nearly $6 billion by 2014, according to the latest In-Stat market study.

“The bulk of the market value resides in Western Europe and Asia-Pacific with the key growth regions being Latin America and Asia-Pacific,” says Gerry Kaufhold, Principal Analyst at In-Stat.

Sezmi TV will spur moderate growth for HD-DVR STBs in the U.S. market. The Middle East and Africa hold potential but not until the economic situation improves and local governments decide how they will handle subsidizing DTT converter boxes.

Some of the In-Stat market study findings include:

- Europe is embracing High Definition and optional Pay-TV services.

- DVB-T2 will provide a second growth phase for Europe.

- Hybrid Broadcast Broadband services and the UK's YouView approach will increase demand for HD STBs equipped with disk drives and broadband connections.

- Intel is entering the DTT STB market with Metrological's YuiXX Hybrid STB, Amino's Freedom box, Google TV, and others.

- Africa and Latin America will leapfrog directly to MPEG-4 HD and spur long-term growth.

- Semiconductor TAM for all DTT STBs will exceed $500 million in 2014, with approximately 80 percent of the TAM coming from HD boxes.

- Licensing fees are a significant cost of manufacturing HD DTT boxes. By 2014, licensing will account for a higher percentage of the total Bill of Materials (BOM) than Decoders, Tuners or Memory devices.

Americans View 5.4 Billion Video Ads in November

comScore released market study data showing that 172 million U.S. Internet users watched online video content in November. The total U.S. Internet audience engaged in nearly 5.2 billion viewing sessions during the course of the month.

Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property with 145.8 million unique viewers. Yahoo! Sites took the #2 spot with 61.8 million viewers, followed by VEVO with 50.3 million viewers. AOL, Inc., which recently acquired 5min in September, secured fourth place with 47.7 million viewers. Viacom Digital closely followed with 47.3 million viewers.

Google Sites had the highest number of viewing sessions with nearly 2.0 billion, and average time spent per viewer at 271 minutes, or 4.5 hours.

Americans viewed more than 5.4 billion video ads in November, with Hulu generating the highest number of video advertisement impressions at more than 1.1 billion.

Tremor Media Video Network ranked second overall (and highest among video ad networks) with 477 million ad views, followed by ADAP.TV (446 million) and Microsoft Sites (427 million). Video ads reached 49 percent of the total U.S. population an average of 36.8 times during the month.

CWTV.com delivered the highest frequency of video ads to its viewers with an average of 68.5 over the course of the month after recently starting to run full ad-loads comparable to those of television.


Other findings from the November 2010 study include:

- The top video ad networks in terms of their potential reach of the total U.S. population were: ScanScout Network at 44.3 percent, BrightRoll Video Network at 41.5 percent and Break Media at 39.9 percent.

- 84.2 percent of the U.S. Internet audience viewed online video.

- The duration of the average online content video was 5.1 minutes, while the average online video ad was 0.4 minutes.

- Video ads accounted for 15.3 percent of all videos viewed and 1.4 percent of all minutes spent viewing video online.

LTE Wireless Network Investment to Proceed Slowly

When mobile network infrastructure comes to mind in 2011, 4G LTE is likely the focal point. Yet the very meaning of the acronym -- Long-Term Evolution -- is a hint that the required network investment will proceed slowly.

LTE's deployment as the mainstay 4G technology will take place gradually, and won't even begin to gather real momentum until 2013. Nonetheless, LTE is forecast by ABI Research to generate more than $11 billion in service revenue in the U.S market in 2015, with nearly a further $650 million to come from Western Europe.

"The LTE service revenue growth curve for Western Europe is practically a straight line," notes ABI Research director Philip Solis.

That contrasts sharply with constantly accelerating revenue growth in the US, and is largely due to the sometimes exorbitant amounts European network operators paid for their 3G spectrum -- many of those operators want to squeeze every drop of value from their 3G investments before migrating to 4G.

In the U.S. market, though, carriers such as Sprint deployed WiMAX, and began advertising 4G as each city rolled out starting in late 2008. Other carriers, not wanting to be left out in the cold, started jumping on the 4G bandwagon, with Verizon Wireless already launching LTE, and AT&T Wireless bringing its announced launch date forward in 2011.

"Although carriers will appreciate LTE's bandwidth efficiency and users its higher data speeds and lower latency, voice will only start to enter the LTE picture in a meaningful way in 2013 or 2014," adds ABI research analyst Xavier Ortiz.

Existing networks still provide voice services with great coverage and reliability. Using LTE for voice will mean completely abandoning the tried-and-true legacy TDM backhaul and replacing it with IP backhaul at considerable cost.

Carriers will only make that leap when 4G can truly replace 2G and 3G for voice -- although ABI Research recommends making the investment sooner, rather than later.

400 Million Blu-Ray Video Discs Produced in 2010

Worldwide pre-recorded Blu-ray video disc production is on track to exceed 400 million units in 2010, an increase of nearly 60 percent compared with 2009, according to the latest market study by Futuresource Consulting.

When factoring in PS3 titles, overall BD production volumes are somewhat higher.

"Moving forward we expect to see continued expansion in BD video production volumes, with our forecasts indicating that annual global output will reach two billion discs by 2014," says Michael Boreham, Senior Consultant at Futuresource Consulting.

The BD replication industry has seen capacity utilization improve markedly during 2010. As a result of this output expansion, BD capacity utilisation will hit nearly 80 percent in the U.S. market during Q4 of this year and 75 percent in Europe.

This is about as high as it can comfortably get, and given the continued market expansion expected over the next few years, which is being driven by growing player ownership and falling disc prices, the industry will need to invest further in 2011 to prevent peak quarter disc shortages.

Production quantities are boosted by the continued pipeline fill and infrastructure requirements. Studios remain committed to maintaining inventory levels to ensure demand can be met in a growing market and retailers are keen to maintain a good level of copy depth in store, to strongly promote BD and eliminate out-of-stocks and lost sales.

Fiona Hoy, Market Analyst at Futuresource Consulting said, "Bundling discs with hardware is also a factor, and the launch of 3D BD titles has added extra importance to this. As 3D is ideally suited to the BD delivery platform, this is clearly a long-term opportunity for the industry to further sustain consumer interest in packaged entertainment media."

From 2012 we're going to see very strong demand for 3D content, which will fuel additional growth. A number of bundled exclusives are already boosting demand from this sector, such as 'Avatar' with Panasonic displays or 'How To Train Your Dragon' with Samsung displays.

Video is Driving the Residential Services Market

Infonetics Research released excerpts from its latest North American residential voice, data, and video services market study and forecast. There's a growing upside to the video services opportunity, with the transition from increased competition, that will gain new momentum in 2011.

"Considering that revenue from video services will rival that of voice services by 2014, one of the more interesting trends going on in the residential services market is the number of video subscribers that are jumping from cable to satellite and telco IPTV," says Diane Myers, directing analyst at Infonetics Research.

In 2010, residential cable video subscriber numbers are flat, while satellite video subscribers have been increasing slowly but surely over the last few years, and telco IPTV subscribers are up 40 percent from last year.

Myers notes, "Video services are proving to be a hard fought battle. While cable operators have a legacy in North America, they have been unbending in their pricing policies, and as a result are losing record number of subscribers to less expensive alternatives."

Highlights from the Infonetics market study include:

- Telecom service providers are bringing in $245.5 billion from North American households subscribing to voice, video, and Internet access services in 2010.

- This represents a 2.1 percent increase in revenue over 2009.

- Infonetics expects the residential services market to grow to $270 billion in 2014, as revenue from voice services declines while broadband access and video service revenue increases.

- The number of residential mobile broadband subscribers in North America is nearly doubling in 2010 over 2009, to about 15 million, and is forecast by Infonetics to jump to 70 million by 2014.

- In the first half of 2010, AT&T leads in residential mobile voice service revenue with 29 percent, Verizon is second with 26 prercent.

- When mobile voice subscribers are counted, the shares are reversed, with Verizon leading with 29 percent, AT&T second with 26 percent (AT&T generates more revenue per subscriber).

U.S. Online Ad Spending Will Surpass $40 Billion

We now know that 2010 will go down in history as the first time that marketers invested more in online advertising than newspaper advertising, according to the latest eMarketer forecast.

Total newspaper spending, including advertising in print and online editions, will fall to $25.7 billion in 2010, a decline of 6.6 percent. Spending on print newspapers alone will fall more steeply to $22.8 billion.

Meanwhile, a rise of 13.9 percent will push U.S. online ad spending up to $25.8 billion by year's end.

The spending gap will widen significantly next year, as total newspaper advertising spending falls again to $24.6 billion (including $21.4 billion for print) and online climbs to $28.5 billion.

"It's something we've seen coming for a long time, but this is a tipping point," Geoff Ramsey, CEO of eMarketer, told The Wall Street Journal.

Despite a drop in the dollar amount of online newspaper spending in a down economy, online has been accounting for a growing portion of all newspaper ads as print spending declines even more sharply.

In 2010, online makes up about 11.7 percent of all U.S. newspaper ad spending, a proportion set to rise to 13 percent next year.

Ad spending on newspapers is expected to continue its decline. eMarketer estimates that print newspaper spending has already been cut in half since 2006 -- and online has done relatively little to make up the difference.

In contrast, total U.S. online advertising spending will continue double-digit growth through 2014, when it will surpass $40 billion.

U.S. Cable MSOs Ready to Deploy ITV Advertising

With close to 25 million cable digital set-top boxes (STBs) now enabled to deploy interactive features -- using enhanced binary interchange format (EBIF) technology -- U.S. cable operators will likely introduce more interactive advertising services in 2011, according to the latest market study by Heavy Reading.

"After years of empty talk and dashed promises, cable appears closer than ever to establishing a viable, widely deployed platform for ITV advertising and t-commerce," notes Craig Leddy, research analyst with Heavy Reading.

In 2011, consumers increasingly will see ads that enable them to use their TV remote to click for more information, get a coupon, request a sample, answer poll questions, or purchase products directly through their TV.

Deployment of ITV-capable set-tops is fast reaching the level that can support interactive ad initiatives, Leddy says.

Based upon the MSOs' tallies of EBIF-ready STBs, the industry is well on its way to reaching its 25 million goal, though there are still several steps before all of those boxes are running ITV apps.

Cable is forging ahead with ITV ad and t-commerce plans that could give ITV a much-need revenue injection so that apps of all kinds make their way to the TV screen.

Given the rising adoption of over-the-top (OTT) video services, I believe that the challenge for MSO marketing leadership will be to translate the ITV capabilities into a meaningful subscriber benefit. With increasing competition in the U.S. video entertainment market, offering new value-add capabilities for consumers is now a high priority.

Key findings from the market study include:

- The U.S. cable industry is making progress in its effort to create a national platform for ITV advertising.

- Four major programmers are now positioned to accept ITV ad orders by advertisers.

- Initial results of ITV ads and t-commerce are encouraging but must be proven on a mass scale.

- Challenges remain as proponents must win over more programmers, advertisers, and consumers.

- Current efforts precede more ITV activity through tru2way, IP, and cross-platform technology.

Mobile and Video Apps Drive Service Provider Capex

Infonetics Research released its latest Service Provider report -- which analyzes telecom carrier capital expenditures (capex), operational expenses (opex), revenue per user, and subscriber trends by operator, operator type, region, and telecom equipment segment.

"Telecom capital expenditures are bottoming out at $289 billion this year, and our cycle-based forecast model and conversations with service providers indicate that a new investment cycle will start in 2011 and last several years, with capex growing to $321 billion in 2014 before growth slows again" says Stephane Teral, principal analyst for mobile and FMC infrastructure at Infonetics Research.

Overall, capital intensities will continue to slowly decline through at least 2014. because the world's telecommunications infrastructure is essentially built out.

Infonetics market study highlights include:

- From its peak in 2008, worldwide service provider capex declined 5.3 percent in 2009, and is on track to decline another 3 percent in 2010.

- The dip in capex in 2010 is due mainly to the fact that carriers in China, which invested heavily in network upgrades in 2009, have completed their 3G rollouts.

- Infonetics Research forecasts a 1.6 percent pickup in telecom carrier capex in 2011, marking the start of a new investment cycle.

- Despite the overall decline in service provider capex in 2010, some telecom equipment segments are faring well, including video infrastructure and IP routers/carrier Ethernet switches, which saw double-digit worldwide revenue increases in the first half of 2010.

- Infonetics expects the major areas of investment from 2011 to 2014 to be fiber-based wireline broadband (FTTx), 2G mobile network capacity expansion, network migration from 2G to 3G, and migration to LTE (mobile broadband will follow).

- Low equipment pricing resulting from fierce competition between western and Chinese vendors is giving service providers incentive to cap their capex budget and buy more equipment with lower budgets.

Growing Spend on Mobile Marketing and Advertising

The market opportunity for mobile marketing and advertising is growing steadily, and spending on the new content distribution channel is growing in parallel. One six-month period in 2010 saw spending expand in the U.S. by almost 2.5 percent.

A new ABI Research market study forecasts that in 2016, revenue from mobile display ads will reach close to $1.5 billion.

ABI Practice director Neil Strother says, "Although the market for mobile advertising and marketing is starting from a very small base, it is showing steady, solid growth.

The recent survey conducted by ABI Research revealed that about one third of the smartphone owners polled had clicked on at least one mobile advertisement.

Overall spending on mobile ad media has accelerated with the arrival of the autumn back-to-school and end-of-year holiday seasons, and is expected to approach $1 billion by year's end.

Before 2010 this industry was seen as quite experimental, but, says Strother, "There was a shift starting at the end of last year from the pioneering phase to what we might call the early growth phase."

Approximately 20 percent of all major marketers have done something with mobile marketing, and some have ongoing campaigns. According to ABI's assessment, those mobile campaigns can cost $100,000 or more and annual budgets may run to several million dollars.

Mobile marketing and advertising fall into five categories: Text messages, Mobile display (banner) ads, Mobile search, In-application advertising, and In-video advertising.

All of these may have their uses within a campaign -- as does location data -- but Strother observes that, "Today mobile is often seen as a distinct channel, but eventually there will be nothing special about it. Therefore, it will be understood as an integrated part of a campaign's overall strategy."

DVD Downside Transitions to Online Video Upside

American home video retail revenue has fallen consistently over the past five years, according to the latest market study by In-Stat. Moreover, double-digit declines in annual retail sales of DVDs are expected, resulting in a total reduction of $4.6 billion from 2009 to 2014.

Clearly, the U.S. home video entertainment market is in a transition. The progressive media content producers will adapt to the shift in consumer demand. This is now the accepted market reality.

Meanwhile, to replace retail DVD revenue losses, the online digital paid video download and streaming segment -- which includes both purchase and rental -- is expected to show high revenue growth.

Annual revenue of video streaming and download is forecast to grow from $2.3 billion to $6.3 billion within five years, says In-Stat.

The battle lines for online offerings are continuing to be drawn and are intensely competitive. Online à la carte rental of TV episodes will directly compete with online subscription TV services, such as Hulu Plus and Netflix, and may limit the use of incumbent service provider TV Everywhere services.

Further competition will now originate from paid online video stores, such as Apple iTunes, Amazon, Vudu and CinemaNow.

“Video disc rentals will continue their significant decline,” says Keith Nissen, Principal Analyst at In-Stat. "Netflix is already shifting its focus to online streaming, and Red Box is evaluating a similar strategy."

The convenience and utility of the online offerings are simply too compelling. Online rentals permit the selection of any movie or TV program from the Video-on-Demand library. In-Stat believes that, it will be very difficult for physical disc kiosks to compete with the in-home or in-store download-to-rent business model.

In-Stat's latest market study findings include:

- U.S. TV download revenue will more than triple between 2010 and 2014.

- Premium channels (HBO, Showtime, etc.) are in competition with online video subscription services for both subscriber spending, as well as movie licensing rights.

- The emergence of electronic sell-through for online video purchases and rentals will transform the digital entertainment industry over the next five years.

- Online VOD (Video-on-Demand) subscription revenue is expected to approach $3.5 billion by 2014.

U.S. Businesses Using more Smartphones for Data

In-Stat forecasts that American businesses will spend close to $27 billion on wireless data applications in 2010. To fuel data spending, In-Stat expects U.S. mobile service operators to pay $1.4 billion on subsidizing smartphones for those same businesses in 2010.

Overall, U.S. mobile phone service providers will spend close to $1.7 billion on handset subsidies for American businesses.

"Wireless data revenue has been the engine that is driving ARPU growth for U.S. operators," according to Greg Potter, Research Analyst at In-Stat.

Smartphones are the key for data plan usage. As a result, the wireless operators are willing to invest in smartphone subsidies. Those device subsidies, though, will decline through the forecast period as competitive pressures reduces smartphone average sales prices.

In-Stat latest market study found the following:

- Small business (5—99 employees) spending on smartphones will decline 28 percent over the next 5 years.

- Wireless handset spending by U.S. businesses will decline from $4.5 to $3.2 billion from 2010 to 2014 with the largest decline coming in the utility and manufacturing vertical segments in the 10,000+ size of business.

- The total small office/home office sector (SOHO) smartphone market will grow 18 percent in unit shipments in 2014 compared to 2010. The SOHO business category is comprised of U.S. businesses with one to four employees.

- The education and professional services sector will be the highest growth vertical market.

- Smartphone purchases across all verticals and all U.S. business sizes will increase 14 percent in 2014 compared to 2010.

Tablet Advertising: a Salvation for Legacy Marketers

Some traditional marketers apparently can't move on -- they cling to the notion that that the legacy advertising business model can be kept on life-support via new tablet media applications. Recent market studies continue to give them the hope that they crave.

eMarketer reports that the tablet category is going to be a magnet for brand advertisers in 2011. Though many companies had experimented with tablet-like devices -- and eReaders were already a proven entity -- no one had created a gadget that people would actually pay for and use, until now.

eMarketer expects worldwide tablet sales to reach 81.3 million units in 2012, up from 15.7 million in 2010. The Apple iPad will remain the market-share leader through the forecast period, with an expected 69 percent of the global market in 2012 -- that's down from 85 percent share in 2010.

Consumers in the U.S. will be big drivers of tablet sales, accounting for 62 percent of all tablets sold in 2010.

"Because tablets offer so many ways of engaging with content, they represent a huge opportunity for marketers," said Paul Verna, eMarketer senior analyst. “Some brands have experimented with the format by advertising in iPad editions of popular periodicals. Nevertheless, many brands are sitting on the sidelines waiting to see how the tablet market develops."

A Nielsen survey noted that Apple iPad users were more likely than users of iPhones and other connected devices to click on ads of various types, including video, text, multimedia and interactive -- giving yet more false hope to legacy marketers.

The Tablet Ad Bonanza: a Likely False Prophecy
Many believe that mainstream consumer marketers who take the plunge into tablet advertising will be rewarded with an audience that is engaged, predisposed to the Wow-factor -- and therefore primed to purchase.

Survey results indicate that the demographic profile of a typical tablet user is high-income, 18 to 34 years old, male and more likely than average to respond to an ad by completing a purchase -- whether through a tablet app, a website or a phone.

"Just as Apple seized the early-mover advantage by launching a groundbreaking product without the certainty of metrics, brand marketers can edge out the competition by making a bold entrance on the tablet stage," said Verna. "Some improvisation may be required, but the potential rewards far outweigh the risks."

And there you have it; the salvation. Tablet advertising will apparently 'save the day' for those marketers who just can't seem to let go of a bygone era in product marketing history.

HDMI on Mobiles Enable Advanced Video Apps

The global mobile phone market is now a significant opportunity for many consumer technology companies, shipping in the billions of units every year. So, it makes sense that the HDMI audio/video interface chip manufacturers would pursue it.

HDMI on mobile phones enables advanced media-centric applications -- especially HD-enabled camera phones -- to connect to HD video displays, including HDMI-enabled digital television sets. That said, any video that can be seen on the phone can easily be viewed on a TV -- including streamed OTT pay-TV content.

For the first time, the number of mobile phones with HDMI ports will ship in excess of a million units in 2010, according to the latest market study by In-Stat.

Meanwhile, the HDMI interface has become pervasive in all consumer electronics, accounting for over 350 million devices shipping in 2010.

"The emergence of phones that can capture 720p HD video has helped HDMI gain penetration over the last year," says Brian O'Rourke, Principal Analyst at In-Stat.

However, HDMI will face significant challenges in this market. First, phone vendors and mobile service providers must allow it to be included on their devices. Second, HDMI faces increased competition from new interfaces such as the Mobile High-definition Link (MHL).

In-Stat's latest market study findings include:

- Overall HDMI device shipments will increase by 20.8 percent annually through 2014.

- DVI device shipments will increase through 2011 before starting a slow decline.

- HDMI is gaining traction in mobile PCs, graphics cards, and PC monitors.

- DVI device shipments will begin its slow decline in 2011 due to competition from both DisplayPort and HDMI.

Global eBook and Reader Market Upside in 2013

The growing market for eBook readers has been somewhat limited to the United States, and has been led by the affordable Amazon Kindle, Barnes & Noble Nook, and Sony Reader.

But according to the latest market study by ABI Research, starting in 2013 eBook reader markets will start to expand globally. ABI forecasts that more than 30 million readers will ship during 2013, almost double the 2012 total.

"Digitized content is the key," says ABI principal analyst Jeff Orr. "It has been in the United States that the most content has been translated to digital form. The companies that provide the devices maintain tightly-integrated content stores that make access easy."

In two or three years we will enter a period in which much more digital printed matter will become available in other countries and regions. Western Europe will be first, followed by Eastern Europe and Asia, especially China.

While North American eBook consumers may now own more than one reader so as to ensure a wide selection of content, the majority of readers made worldwide are in fact designed and manufactured in China.

China does face three barriers to eBook adoption: the lack of digital content, relatively lower levels of literacy, and device cost. For market success, says Orr, an eBook reader must be priced at less than $100 equivalent. Once these obstacles begin to be overcome, China has the potential to be a major eBook market in its own right.

Most eBook readers today are fairly similar in design and performance, and competition is fierce. This, along with the need to create an entirely new market, has been driving prices down sharply, reinforcing Orr's argument that The device brand isn’t as important as the content.

Success will increasingly depend upon the strength of the relationship between reader and content provider. Non-US markets will be less driven by booksellers, and more by publishers and perhaps even network operators.

Top Ten Broadband Service Values in the World

Hong Kong is confirmed as the best value on earth for consumer broadband -- while Singapore joins the top ten nations worldwide for the first time -- according to the latest market study by Point Topic.

The research data, which is collected on a quarterly basis by industry leading analysts at Point Topic, showcases the best value on offer to consumers around the world.

"Consumers in different countries are faced with very different broadband tariffs, dependent on geography, market and network maturity, local competition and various levels and sources of subsidy," said Fiona Vanier, Senior Analyst at Point Topic.

In the standalone tariffs that Point Topic tracks, advertised bandwidth can vary from 150kbps up to 1Gbps. Many come with data limits, email addresses or static IPs and that is before any 'special offers' are accounted for.

To help comparison, Point Topic has analyzed the amount a consumer will actually pay for a megabit of bandwidth. For this analysis Point Topic has calculated the total cost for the first year of a broadband subscription.

Nine of the ten best value tariffs are either pure fiber-to-the-home or hybrid offerings where fiber is a significant part of the local loop. The exception is Germany where Unity Media offer a cable service that is very competitive.

Rankings can change very quickly. If a particular broadband service provider upgrades its network or decides to introduce a new tariff, it can result in a significant improvement in the cost on offer to the consumer.

"Prices are stabilizing in many markets around the world and overall in the last quarter there was an average increase globally. However, there are plenty of countries that are still rolling out new networks and ISPs that are announcing new tariffs," added Vanier.

Even in relatively mature markets, like Singapore or Italy, there is room for improvement as the new tariffs from StarHub and Fastweb demonstrate.

Faster downstream speeds do usually mean a lower price per megabit but the bandwidth has to be used for those savings to be achieved.

"Bandwidth will continue to increase as fiber edges closer to the consumer. Higher speeds generally mean better value for the consumer. All that remains is to work out how best to use it," concluded Vanier.

Lowest Cost/Megabit by Country, Operator and Tariff

The Top 10 (PPP rates)
Country, ISP and tariff $/Mb
Hong Kong, HKBN, (bb Fibre Home 1000) 0.028
Japan, KDDI, (FTTH AU-Hikari Mansion Giga) 0.048
Romania, Romtelecom, (Clicknet Power) 0.163
Sweden, Riksnet, (Riksnet Broadband 100) 0.182
Latvia, Lattelecom, (Fibre Internet 4) 0.241
China, China Tietong, (J3 Shared 100M VDSL Unlimited) 0.247
Singapore, StarHub Cable Vision, (MaxInfinity Supreme) 0.271
Russia, Beeline (VimpelCom), (High Speed 22G) 0.353
Germany, UnityMedia, (1play Internet) 0.415
Finland, Elisa, (Laajakaista Super 100M/10M) 0.443

The first year of a broadband subscription includes a number of costs. In addition to the monthly rental a consumer can pay for the installation, the activation and the cost of the equipment. Adding these together and converting to a common base using purchasing power parity (PPP) exchange rates from the United Nations and then calculating the amount per megabit of bandwidth produces a listing from which the lowest cost per megabit for a generally available, standalone (broadband only) tariff in each country is selected. A total of 70 countries provided enough data to qualify for this analysis.

60.7 Million People in the U.S. Own Smartphones

comScore reported key trends in the U.S. mobile phone industry during the three month average period ending October 2010. The October report found Samsung to be the top handset manufacturer overall with 24.2 percent market share, while RIM led among smartphone platforms with 35.8 percent market share.

For the three month average period ending in October, 234 million Americans ages 13 and older used mobile devices. Device manufacturer Samsung ranked as the top OEM with 24.2 percent of U.S. mobile subscribers -- up 1.1 percentage points from the three month period ending in July.

LG ranked second with 21.0 percent share, followed by Motorola (17.7 percent share), RIM (9.3 percent share, up 0.3 percentage points) and Nokia (7.1 percent share).

60.7 million people in the U.S. owned smartphones during the three months ending in October, up 14 percent from the preceding three month period, representing 1 out of every 4 mobile subscribers. RIM was the leading mobile smartphone platform in the U.S. with 35.8 percent share of U.S. smartphone subscribers.

They were followed by Apple with 24.6 percent share (up 0.8 percentage points). Google Android saw another month of strong growth, rising 6.5 percentage points to capture 23.5 percent of smartphone subscribers. Microsoft accounted for 9.7 percent of smartphone subscribers, while Palm rounded out the top five with 3.9 percent.

Despite losing share to Android, most smartphone platforms continue to gain subscribers as the smartphone market overall continues to grow.

In October, 68.1 percent of U.S. mobile subscribers used text messaging on their mobile device, up 2.1 percentage points versus the prior three month period, while browsers were used by 36.2 percent of U.S. mobile subscribers (up 2.6 percentage points).

Subscribers who used downloaded applications comprised 33.7 percent of the mobile audience, representing an increase of 2.3 percentage points. Accessing of social networking sites or blogs increased 2.4 percentage points, representing 24.2 percent of mobile subscribers.

Playing games represented 23.7 percent of the mobile audience (up 1.4 percentage points), while listening to music increased 0.9 percentage points, representing 15.4 percent of subscribers.

115 Million 4G LTE Subscribers Forecast by 2014

While it's still true that LTE, the 4G mobile network standard, is destined to become the globally dominant wireless airlink, several formidable challenges will make its widespread adoption slower than many expect.

As an example, spectrum has to be cleared, licensed, and either allocated or sold off before LTE gains meaningful momentum. As every country has its own telecommunications regulations, these factors will take varying periods of time to be resolved.

However, despite this difficult path to adoption and growth, according to the latest market study by In-Stat, the number of LTE subscribers will approach 115 million by 2014.

"U.S. operator LTE CAPEX spending will drive wireless leadership from Asia and Europe to North America," says Chris Kissel, Industry Analyst for In-Stat.

From 2009 to 2014, more than one quarter of global LTE CAPEX spending will occur in the U.S. market. As a result, the U.S. will have more LTE subscribers than the entire Asia-Pacific region by the end of 2014 -- even though it will have less than half the POPs.

In-Stat's latest market study found the following:

- Although the vast majority of LTE subscribers will be FDD-LTE, TD-LTE will have a CAGR through 2014 of almost twice that of FDD-LTE.

- Working through technology partners, Huawei and Ericsson, Vodafone purchased 1,500 LTE base stations in Germany in 2010.

- LTE networks will have better than half of all last mile backhaul capacity in North America by 2014.

- Despite the potential for LTE services in China and India, Japan is very likely to have the most LTE subscribers in Asia-Pacific by the end of 2014.

Upside for the Bundling of Mobile Phone Advertising

eMarketer reports that U.S. local mobile phone advertising revenue is likely to increase at a compound annual growth rate (CAGR) of 57 percent from 2009 through 2014, according to the latest market study by BIA/Kelsey.

Local spending on the mobile ad channel is set to rise from $404 million this year to $692 million in 2011 and over $2 billion by 2014, according to their current forecast.

"We expect to see more bundling of mobile advertising by digital and local media companies, in an effort to lower the barriers for adoption by small and medium-sized businesses," said Michael Boland, program director at BIA/Kelsey.

As a result, mobile advertising will move down market to SMB and mid-market segments, increasing the overall revenue opportunity and share of geo-targeted ads.

This down-market shift will be coupled with large advertiser evolution and adoption of mobile local ad distribution.

BIA/Kelsey forecasts mobile ad revenues to increase from $790 million this year to just under $3 billion in 2014. In terms of ad formats, they expect a shift in favor of search engine marketing (SEM) over the same period.

eMarketer's own estimate is a similar $743.1 million in mobile spending this year, rising to a somewhat more conservative $2.55 billion in 2014.

Display ads will remain the dominant format, however, with search approaching but not surpassing it, according to eMarketer's forecast.

Why IP STBs Require Consumer Electronics Design

In the competitive and rapidly evolving pay-TV market, broadband service providers are now planning to add complementary online video services that require the installation of new hybrid IP set-top boxes (STB).

In many cases, service providers are now reacting to the market entry and adoption of low-cost on-demand pay-TV offerings.

The legacy pay-TV providers hope that the addition of more HD channels and new Over-the-Top (OTT) video services will be strong contributors to demand for their entertainment offerings over the next few years, according to the latest market study by In-Stat.

"Since telcos in most geographic regions have significant competitors for TV services, many are working in concert with set top box manufacturers to develop new boxes," says Michelle Abraham, Industry Analyst for In-Stat.

Vendors are also enhancing their STBs to make installation and remote management of boxes easier for telcos.

Moreover, most of the traditional pay-TV STB design characteristics typically do not compare well with the more design-savvy consumer electronics (CE) devices that are common in the digital home environment.

Therefore, given the raised bar of customer expectations, pay-TV service providers must now improve the functional design and operational user interface of in-home products -- in order to compete more effectively with the CE market leaders.

In-Stat's latest market study found the following:

- The IP set top box market will grow 24 percent in 2010.

- Motorola remained the market share leader in 2009 with 27 percent.

- There is some vendor consolidation taking place with ADB buying Pirelli in 2010.

- Excluding the Middle East/Africa and Latin America regions, which are growing from a small base, the North American market will see the strongest growth over the forecast period.

- In-Stat expects slower price erosion on STB silicon, since many SoCs have already eliminated other discrete ICs.

Global 3DTV Sales to Exceed Four Million in 2010

3DTV prices have fallen by close to 40 percent in some cases, and adoption of 3DTV is occurring at a faster rate in most territories than it did for high-definition television (HDTV), according to the latest market study by Futuresource Consulting.

Futuresource expects global sales of 3DTVs to exceed four million this year. Across Western Europe alone, 1.2 million 3DTVs will be sold, rising to more than three million in 2011. In the U.S. market, more than five million 3DTVs will be sold next year.

"3DTV will continue to provide premium brand CE manufacturers with a way to differentiate themselves from the competition and add value for consumers," says Bill Foster, Senior Technology Consultant at Futuresource Consulting.

For systems that use active glasses technology, manufacturers are now able to embed 3D chipsets at a relatively low cost, allowing them to increase their margins while still keeping 3D affordable.

Passive glasses technology, as used in cinemas, is still more expensive to produce for the home and will remain costly for some time, as the TV requires a polarised screen.

In addition, passive systems are unable to show 3D in full 1080p, as the picture on the screen is polarized, with half the image delivered to the left eye and half to the right.

As the television market continues to be commoditized, with traditional factors like screen size, display thickness and the quality of image reaching their peak, 3D capability will increasingly be bundled with other features like connectivity, web services and energy efficiency to add a new dimension beyond the battle for price point.

At a smaller screen size, auto-stereoscopic 3D devices are commercially viable as they are viewed close-up by a single person. The highest profile device to be announced so far is the Nintendo 3DS -- due for launch in early 2011 and featuring a 3.53-inch display.

But the developers of these small displays readily admit that scaling to larger sizes for a living room environment presents a significant technical challenge.

60 Million 3D Mobile Video Devices Ship in 2014

The major Hollywood movie studios are already taking 3D content from cinemas to the home as TV manufacturers ship increasing numbers of 3D-ready TV sets.

While these efforts are aimed at the consumer home theater environment, the trend is enabling the next evolution -- 3D video on mobile devices.

In-Stat anticipates that the number of 3D-enabled mobile devices shipped in 2014 will surpass 60 million units.

"Due to advancements in auto-stereoscopic 3D technology, a type of 3D technology that does not require glasses to view 3D images, 3D technology is finding its way into mobile devices," says Stephanie Ethier, Senior Analyst at In-Stat.

The more predictable viewing distance of mobile devices enables a compelling and convenient 3D experience. Additionally, many of the chipsets found in today's smartphones have the processing power to handle 3D content.

Therefore, according to In-Stat's assessment, the smartphones promise the largest opportunity for mobile 3D technology suppliers over the next five years.

- Auto-stereoscopic 3D is necessary for 3D mobile device consumer acceptance.

- By 2012, 3D-enabled smartphones will represent 45 percent of all 3D-enabled mobile devices shipments.

- Penetration rates will be highest in the handheld game console market segment.

- Tablets, smartphones, and handheld game consoles, will incorporate 3D more quickly than other portable devices.

Mobile Network Sharing Can Enable 3G Everywhere

The latest global market study by ABI Research indicates that there are currently more than 500 3G network commitments, and over 300 4G WiMAX and LTE announcements worldwide.

This equates to more than two billion of the world's population being covered by high-speed wireless mobile data networks. The demand for wireless broadband data networks continues to rise across the globe.

"While many networks in U.S. and Europe are working towards complete coverage for 3G services, some mobile operators in other regions find themselves tangled up with government bureaucracy, which impedes progress in upgrading the network technology," said Neil Strother, mobile services director at ABI.

India has at last concluded its 3G spectrum auction after repeated delays; Thailand's attempt to catch up with 3G licensing has once again stalled due to reorganization of the national telecoms regulator.

ABI Research estimates that nearly 82 percent of the population in Western Europe is currently covered by 3G networks, while only about 12 percent of Asia-Pacific's population has access to 3G services.

"3G coverage in the Asia-Pacific region is set to rise dramatically in the next few years as Chinese and Indian operators such as China Unicom and Bharti Airtel begin actively rolling out new data networks," notes ABI research associate Fei Feng Seet.

Network sharing has became more common in a number of mature markets. For example, French mobile operator SFR will be sharing the rural build-out of its UMTS network with domestic rivals Orange France and Bouygues Telecom.

Meanwhile, T-mobile and Orange UK have formed a new joint venture called "Everything Everywhere" in a bid to share costs and spectrum. Mobile network sharing can provide a swift transition to increased broadband adoption, and all trailing nations would be wise to implement public policy that encourages this forward-looking business model.

Demand Grows for Low-Cost Pay-TV Option in U.S.

In a recent market study, Ipsos looked at usage scenarios with the most common Over-the-Top (OTT) video offerings -- assuming free ad-supported content wasn't available -- in an attempt to predict the growing demand for low-cost pay-TV service models in the U.S. market.

To make the scenarios as realistic as possible for study participants, the Netflix subscription was priced at $9 per month, Apple iTunes downloads were priced at $1 with no advertising support, and Hulu streams were priced at $1 with advertising support.

When analyzing differences by age, it was clear that young adults (18-34 years old) were driving growth in paid viewership through OTT video platforms -- with over half (51 percent) interested in viewing their regularly watched programs through a low-cost pay-TV option.

"While Hulu has set a precedent for free post-airing streams with ad support, growth continues to be driven by the 18-34 year old audience as more post-broadcast content is moved into payment models such as monthly subscriptions and pay-per download or stream fees" said Brian Cruikshank, Executive VP at Ipsos.

According to the Ipsos assessment, for both Apple and Hulu, the per stream payment model will fuel the strongest growth in OTT video viewing. Not surprisingly, Apple's pay per download/stream follows the model it established with music. Meanwhile, Netflix has a rapidly growing customer base who prefer to receive OTT video bundled via a monthly subscription.

The strength of a per download/stream model is particularly acute for the 18-34 year old audience who are coveted by advertisers. Among this age group, a Hulu TV show streamed for $1 with ad support rivals the Netflix monthly subscription and iTunes per stream options.

Ipsos found the share of preference results were consistent across Hulu, Netflix and iTunes among those who selected a fee-based digital viewing option for their regularly watched TV shows.

Study participants were asked to classify 20 popular TV shows ranging across genres, into different involvement categories. It appeared that consumers are more likely to regularly re-watch comedies online than the other genres, and that reality TV show viewing is more of an occasional activity.

Furthermore, while genre had very little impact on share-of-preference for Hulu, U.S. consumers are more likely to choose the Netflix monthly subscription model for dramas than comedies -- particularly to catch up on the entire missed season.

TV show preferences can impact whether someone chooses to watch online. Most shows had 40-50 percent of regular viewers willing to select one of the post-broadcast OTT video options. In contrast, approximately 60 percent of those who regularly watch documentaries and niche shows will choose one of the OTT options.

Canadian Social Media Marketing in Perspective

When most industry analysts profile digital marketing and online advertising in North America, the focus is typically on the U.S. market. That said, Canada has a relatively high internet access penetration and growing social network usage rates.

According to a recent eMarketer report, Canadian social network users view social media as their online home -- a hub for communication, entertainment and information.

"Canadians readily adopt social network activities, often at rates higher than users in the U.S., but gaining the trust of users on a social network is a brand manager's biggest obstacle," said Mike Froggatt, eMarketer research analyst.

In 2010, eMarketer estimates that about 15.1 million internet users in Canada will have visited social networking sites at least monthly -- up from 13.6 million in 2009.

Penetration will rise from 59 percent of the internet audience this year to 68 percent by 2014 -- when 18.4 million people in Canada will be socializing online at least once a month.

Facebook is the top social networking site in the country, Windows Live is second, with Twitter coming in third and LinkedIn is forth -- ranked by unique monthly visitors, according to comScore.

"As internet users increase the time they spend on social networks, social media accounts for an increasing share of advertising impressions," said Froggatt. "Prices remain low because of abundant inventory, but increasing budgets and competition for inventory will drive prices up. As a result, now is the time for brand managers to test new social media campaigns on users."

Hybrid STBs Key Role for Pay-TV Service Providers

Most television sets are manufactured in Asia. As the major consumer electronics brands plan to introduce new smart TV models at the upcoming CES event in January, manufacturers are increasingly adding Internet connectivity as a standard feature. This phenomenon will include the high-growth Chinese market.

China's connected TV market originally launched in 2009, with over 2 million web TV set shipments and about a quarter million web TV set-top box (STB) shipments.

The fast development of the web TV market is driven by competition between the giant domestic TV vendors in China and the low incremental cost for connected TV functionality -- helping drive wider user acceptance.

As a result, In-Stat now forecasts web-enabled TV shipments will exceed 15 million units by 2014. However, the web TV STB market does face some challenges, associated with its limited sales channel and high retail pricing.

According to In-Stat's market assessment, some telecom operators are deploying web TV STBs coupled with subscriptions to their high bandwidth Internet access, but they do so while keeping a low profile -- due to local regulation concerns.

In-Stat's market study revealed the following findings:

- With the triple-play policy being pushed by the Chinese government, more licensed content providers for web TV sets will emerge.

- Web TV is becoming standard on large screen LED and LCD TV sets.

- The penetration rate of web TV is likely to increase from 8 to 50 percent in the next five years.

- Consumers are willing to pay for web TV content, if the content is in HD quality and current.

- Cable STBs with VoIP functions have already emerged in China.

- In contrast, in the U.S. market over 137 million web-enabled CE devices will ship in 2014.

- Hybrid web-to-TV STBs are emerging as a vital tool to enable broadcasters and pay-TV service providers to provision new over-the-top (OTT) video entertainment offerings.

Broadband Cable TV Equipment Market Downside

Infonetics Research released its 2010 third quarter market study of the Cable TV hardware systems and services industry. The results are mixed; there are several significant declines, and the future is somewhat uncertain -- with no sign of an imminent recovery.

After four quarters of sequential growth, a decline in the cable aggregation systems market was inevitable, and it happened in the third quarter of 2010, with a 23 percent drop in worldwide revenue -- CMTS revenue was down 27 percent; edge QAM revenue was up slightly.

"In North America, CMTS revenue was down 30 percent, as Comcast and other operators slowed their DOCSIS 3.0 rollouts because they've either reached their homes-passed goals or they are waiting on new line cards," notes Jeff Heynen, directing analyst for broadband access at Infonetics Research.

The Infonetics market study included the following findings:

- CMTS port shipments and revenue declined in all world regions in 3Q10, including double-digit percent declines in North America, Asia Pacific, and EMEA.

- The drop in CMTS sales pushed the overall market down to $352 million worldwide in 3Q10, from $458 in 2Q10.

- The overall cable broadband equipment market is up 15 percent year-over-year, from 3Q09 to 3Q10.

- Worldwide edge QAM revenue increased just over 1 percent from 2Q10 to 3Q10 due to an uptick in QAM channels shipped for DOCSIS/M-CMTS applications.

- Motorola was the only major CMTS vendor to see an increase in port shipments in 3Q10, increasing its shipments to operators in Asia Pacific and Central and Latin America.

- Cisco maintained its lead in worldwide CMTS market share, and also captured more than two-thirds of the North American CMTS market in 3Q10.

- Harmonic held on to the top spot among edge QAM vendors, further distancing itself from BigBand Networks.

- Comcast's proposed converged multiservice access platform (CMAP) is expected to see trials and early deployments in 2011, and will rely on both edge QAMs to deliver increased narrowcast video capacity, and CMTS downstream ports to deliver more DOCSIS capacity to subscribers.

OTT Video and New Rules of Home Entertainment

Over-the-top (OTT) video services are gaining momentum, enabled by new devices entering the digital home. Over 53 million U.S. broadband households currently view TV programs over the Internet, according to the latest market study by In-Stat.

A growing 85 percent of these users already view online TV content on multiple devices -- including personal computers, TVs, and mobile handsets. By 2014, there will be over 200 million web-enabled wireline Consumer Electronic (CE) devices in operation in the U.S. market.

When PCs and mobile devices are added in, the average U.S. consumer will own between 5-10 web-enabled devices to choose from for viewing Internet-based digital entertainment.

"Today, content is consumed in a myriad of ways over a plethora of devices," says Keith Nissen, Principal Analyst at In-Stat.

The relationship between the user, the content they view, and the device they watch it on, has become complex. Traditional viewing habits no longer apply and, as a result, a new and amorphous set of rules have taken over.