Worlwide Pay-TV Revenue Grew to $240 Billion

Infonetics Research released excerpts from its latest pay-TV market study -- which tracks the telco Internet protocol television (IPTV), cable video, and satellite video entertainment services market.

"We're seeing continued growth in the pay-TV market, driven by providers' ability to offer voice/video/data service bundles, a broad range of linear and on-demand content, and advanced services, such as multi-room DVR and multi-screen video delivery," says Teresa Mastrangelo, directing analyst for video at Infonetics Research.

Although cable MSOs continued to be challenged by competition from IPTV and satellite operators, the overall market remains robust, despite the attractiveness and affordability of over-the-top (OTT) online video entertainment services.

Infonetics latest market study highlights include:

- Worldwide revenue derived by providers of IPTV, cable video, and satellite video services grew to $240 billion in 2010, up 11 percent over 2009.

- Video services experiencing the strongest revenue growth are IPTV services (up 45 percent in 2010) and satellite video services (up 13 percent).

- Cable video services continue to make up (by far) the largest portion of total video service revenue, although growth in the cable video service segment is slowing.

- DIRECTV, which enjoys the highest video service ARPU in the industry, is the global leader for video service revenue.

- The top 20 revenue leaders account for 53 percent of total video services revenue.

- With more than 22.8 million video service subscribers worldwide, Comcast maintains its lead in the race for subscribers.

- In 2010, the fastest growing video services markets were in Asia Pacific and Central and Latin America, driven by analog-to-digital conversion activity and strong new subscriber growth in markets such as Brazil, India, Malaysia, and Mexico.

234 Million Americans Now Use Mobile Devices

comScore released key trends in the U.S. mobile phone industry during the three month average period ending March 2011. The market study surveyed more than 30,000 U.S. mobile subscribers.

During the reporting period, 234 million Americans ages 13 and older used mobile devices.

Device manufacturer Samsung ranked as the top OEM with 24.5 percent of U.S. mobile subscribers. LG ranked second with 20.9 percent share, followed by Motorola (15.8 percent) and RIM (8.4 percent). Apple continued to gain share following the launch of the Verizon iPhone, up 1.1 percentage points to reach 7.9 percent of subscribers.

72.5 million people in the U.S. owned smartphones during the reporting period -- up 15 percent from the preceding three-month period.

Google Android grew 6.0 percentage points to 34.7 percent market share, while RIM ranked second with 27.1 percent. Apple grew 0.5 points to 25.5 percent share, followed by Microsoft (7.5 percent) and Palm (2.8 percent).

In March, 68.6 percent of U.S. mobile subscribers used text messaging on their mobile device. Browsers were used by 38.6 percent of subscribers (up 2.2 percentage points), while downloaded applications were used by 37.3 percent (up 2.9 percentage points).

Accessing of social networking sites or blogs increased 2.6 percentage points, representing 27.3 percent of mobile subscribers. Playing games comprised 25.7 percent of the mobile audience, while listening to music represented 17.9 percent.

Upside for Ad-Supported e-Reader Future Sales

Some people believe that multifaceted media tablets are a more desirable choice than single-purpose e-readers. That said, the U.S. installed base of e-reader devices has more than quadrupled since 2009 and demand remains strong.

eMarketer now estimates more than 20 million e-readers will be in use by the end of 2011 -- reaching 8.7 percent of the U.S. adult population. By 2012, 12 percent of adults will have a Kindle, Sony Reader, NOOK or similar portable e-reader device.

"Two recent developments illustrate the broad reach of e-readers," said eMarketer senior analyst Paul Verna.

First, the Amazon announcement that its lowest-priced Kindle is its best-selling product supports the view that their customers are eager for affordable, no-frills mobile devices that easily enable e-book purchase and consumption.

Second, Liberty Media's $1 billion offer for Barnes & Noble was predicated largely on the book retailer's success with the NOOK Color -- whose list price is nearly double that of the ad-supported Kindle.

eMarketer therefore believes that the upside for product sales at both ends of the e-reader price spectrum bode well for continued adoption of this device category.

Moreover, eMarketer's estimates of e-reader penetration are based on a meta-analysis of several data sources. The penetration figures assume no sharing of devices; where each e-reader corresponds to a single user.

However, many e-reader users indicate that they do share their device. Nielsen reported last year that about a third of e-reader owners share with at least one other person -- meaning they're likely used by millions more people than the reported 12.7 million unit installed base.

Advertising opportunities with e-readers have been limited in the past, but the spring 2011 introduction of the Kindle with "Special Offers" brought the first ad-supported e-reader to market.

"Brand marketers seeking to reach book enthusiasts have a new medium at their disposal with the ad-supported Kindle," said Verna. "Naturally, marketers will want to avoid disrupting the reading experience, but ads on the Kindle screen saver and homepage appear to be hitting the spot where the interests of advertisers, publishers, device-makers and consumers converge."

Multimedia Tablets Create New Opportunities for ISPs

Today's active user of mobile computing devices is in search of constant connectivity -- in order to access the Internet, engage in social networking, and share multimedia content with friends, family or business associates.

The quest for a consistent high-quality on-the-go "connected life" experience is a source of new market development activity for consumer electronics (CE) product manufacturers and their internet service provider (ISP) channel partners.

In-Stat's latest market study suggests that this trend represents an opportunity for traditional mobile phone operators to move beyond the maturing handset market and into the emerging wireless device markets, such as e-readers and tablets.

By 2015 for example, multimedia tablets will have the highest 3G or 4G attach rate among all cellular-enabled portable and computing devices -- with 78 percent of tablets shipping with a 3G/4G modem, according to In-Stat's assessment.

"The emerging tablet market represents one of the strongest opportunities for embedded 3G/4G technology," says Stephanie Ethier, Senior Analyst at In-Stat.

Cellular connectivity will also continue to find its way into e-readers, as well. By 2015, it's forecast that 65 percent of e-readers worldwide will ship with an embedded 3G/4G modem.

In-Stat’s latest research covers the market for non-traditional cellular-connected devices, and includes forecasts for tablets, e-readers, portable navigation devices (PNDs), and digital photo frames.

Additional findings from the In-Stat market study include:

- Approximately 16 million portable and computing devices shipped with 3G/4G cellular connectivity in 2010.

- Over 50 percent of all 3G/4G tablets in 2015 will have LTE WAN connectivity.

- By 2015, 52 percent of cellular-connected portable and computing devices in Asia will be GSM devices.

- The Asia-Pacific region will experience the highest sustainable growth rate among 3G/4G portable and computing devices throughout the forecast period.

Broadband Gateway Revenues will Surpass $10 Billion

The residential gateway opportunity continues to rise in the broadband customer premises equipment (CPE) market. The upside is primarily due to telco service providers favoring gateways over modems, since they fulfill consumer demand and promise greater future revenue possibilities.

As a result of the latest market study by In-Stat, they now forecast that residential gateway revenues will surpass $10 billion in 2015.

"We define residential gateways as essentially any type of broadband modem that also includes routing and/or wireless access point capabilities, says Vahid Dejwakh, Analyst at In-Stat.

More and more different types of modems now also come with embedded Wi-Fi, which qualifies them as residential gateways, and many more telco service providers are supplying residential gateways instead of just DSL broadband modems.

This is not only because customers request gateway features, but also to present possible future service add-ons and to increase the broadband service provider's ability to manage their customer's home network.

Additional findings from the In-Stat market study include:

- Residential gateway shipments will overtake broadband modem shipments in 2014 as more and more devices incorporate Wi-Fi and routing capabilities.

- Worldwide fixed satellite CPE revenues are expected to pass $340 million by 2014.

- Fixed wireless broadband CPE is expected to increase at the fastest pace of all access technologies, with a CAGR of about 10 percent over the next five years.

- Tellabs, Motorola, and Alcatel-Lucent are leaders in FTTH CPE.

Demand for Multimedia Features on Mobile Phones

Responses to surveys of mobile phone service provider business customers in the U.S., China, India, Indonesia, UK, Germany and France conducted by ABI Research indicate that mobile devices providing the best experiences with multimedia, applications, and productivity features are those most favored.

The latest ABI Research global survey results include:

- Multimedia was the top reason Western European respondents chose their current mobile phone; 50 percent of those who plan to upgrade to a smartphone chose applications and Internet access as the top reasons for their smartphone selections.

- More than 50 percent of Indian and Indonesian respondents chose their smartphones based on multimedia capability.

- The top reason stated by 54 percent of Chinese respondents who plan to upgrade to a smartphone is a better multimedia experience; for Indonesians 35 percent will upgrade based on improved multimedia experiences.

- 47 percent of Indians who upgrade to a smartphone chose corporate email and applications as the top reasons to upgrade.

- 60 percent of U.S. smartphone respondents say data services are more important than voice services for business use.

- Wi-Fi for Internet access, location-based services, speakerphones, and touchscreens are the top features rated as extremely or very desirable in a mobile phone by 40 percent of U.S. respondents.

What does this market insight mean to mobile device vendors?

According to ABI Research enterprise practice director Dan Shey, "Now that the mobile device platform environment is stabilizing by brand and form factor, the real work with the enterprise segment begins for the mobile device community."

Businesses now want to translate platform capabilities into real business results. The winners will be those that offer the best combination of functionality, security and -- increasingly -- multimedia capabilities.

Global Annual Telecom Data Traffic Volume Growth

In 2011, the global annual telecom data traffic volume will total almost 8,000 petabytes. That volume will grow at a CAGR of 50 percent over the following years, exceeding 60,000 petabytes in 2016 -- over seven times more than in 2011.

According to the latest market study by ABI Research, the year-on-year growth will be the fastest in 2012 (58 percent) and 2013 (56 percent), slightly slowing down thereafter.

While as of 2011 the web and Internet traffic category is the largest source of traffic, one of the main reasons for the future robust growth is the increasing amount of video traffic.

ABI Research practice director Neil Strother says, "There are basically two types of video use cases that drive heavy traffic: clips from YouTube (and similar sites) that are often shared via other social media, as well as lengthier content like series and even films (e.g. Netflix or LoveFilm video streaming services)."

According to ABI's assessment, video and TV streaming should surpass web and Internet traffic in 2015.

The bigger its screen, the more entertainment the device typically delivers: laptops, media tablets and other devices larger than handsets mimic patterns seen in wired broadband usage, especially when it comes to video.

The increasing uptake of such products is thus another major driver. As a result, the traffic generated by devices other than handsets will grow from about 65 percent of the total in 2011 to over three-fourths in 2016.

How can broadband service providers make the most of this rapidly-changing market?

ABI senior analyst Aapo Markkanen says, "Pricing and data policy are relatively inexpensive ways for operators to differentiate their offerings and ease network congestion, if compared to investments in infrastructure. Operators should better align the pricing and the allowance of data plans with usage patterns. It is an area with a lot of scope for innovation."

Profile of Mobile Location Check-In Service Users

comScore released the results from a study of mobile social networking check-in service users. The study found that 16.7 million U.S. mobile subscribers used location-based check-in services on their phones in March 2011 -- representing 7.1 percent of the entire mobile population.

About 12.7 million check-in users did so on a smartphone -- representing 17.6 percent of the smartphone population. The study also found that they showed a high propensity for mobile media usage, including accessing retail sites and shopping guides, and displayed other characteristics of early adopters -- including a higher interest in tablet devices and accessing tech news, when compared to the average smartphone user.

"Although still in their relative infancy, location-based mobile check-in services are seeing rather impressive adoption among smartphone users," said Mark Donovan, comScore senior vice president of mobile. "The ability to interact with consumers on this micro-local level through special offers, deals and other incentives provides brands with the real-time opportunity to engage consumers through their mobile device."

Check-in service users -- defined as those accessing services such as Facebook Places, Foursquare and Gowalla -- had heavy skews toward 18-24 year olds (26.0 percent) and 25-34 year olds (32.5 percent) in relation to both the total mobile audience and the overall smartphone audience.

They were more likely to be full-time students (23.3 percent) when compared with total mobile (14.6 percent) or overall smartphone users (16.5 percent). Nearly half (46.4 percent) of check-in users were employed full time, slightly less than the percentage of smartphone users who were employed full time (53.3 percent). Both check-in service and smartphone users were more likely to be employed full time than overall mobile users (38.9 percent).

Of the 16.7 million people using check-in services on their mobile devices, 12.7 million (76.3 percent) did so via a smartphone device. Android accounted for the largest share of check-in service users with 36.6 percent checking-in from an Android device, while 33.7 percent of users checked in from an iPhone, with Apple having the highest representation relative to its percentage of the total smartphone market (Index of 132). RIM accounted for 22 percent of check-in service users, while Microsoft, Palm and Symbian each accounted for less than 5 percent.

When compared with an average smartphone owner, social networking check-in users were more likely to access mobile media across a majority of content categories. More than 95 percent of check-in service users used their mobile browser or applications. Nearly 62 percent accessed news. Check-in user behavior was also consistent with that of traditional early adopters, with 40.3 percent of users accessing tech news and 28.2 percent owning a media tablet, both significantly higher than average.

Check-in service users also showed a high propensity for accessing retail-related destinations on their mobile devices. Nearly one-third of users accessed online retail sites on their mobiles, while one-fourth accessed shopping guides.

Check-in service users were also more likely to be exposed to mobile advertising, with nearly 40 percent recalling seeing a web or app ad during the month, compared to just 27.5 percent of smartphone users.

Traditional Media Prospers from Status-Quo Marketing

There are numerous proven alternatives for marketers to reach and engage their target stakeholders in the marketplace, yet many still choose to invest their marketing budget primarily in traditional media -- regardless of the underwhelming results.

What's the forward-looking trend for U.S. advertising spending, and is that insight likely to influence the behavior of those schooled in legacy marketing methods? Will status-quo marketing practices prevail?

eMarketer reports that after plunging by 18.5 percent in 2009, ad spending on traditional media is on a slow rebound. They estimate spending was up 2.1 percent in 2010, to $127.2 billion.

But rather than making a true recovery, spending is forecast to fluctuate in coming years, hovering under $130 billion through 2015 -- far from the $165.94 billion recorded in 2007.

"As advertiser spending continues to more closely reflect the amount of attention consumers give to individual media, each will fare differently," said Nicole Perrin, eMarketer senior editor.

For example, TV and radio are holding on to their audience, and eMarketer forecasts advertising gains for both -- unlike for print media.

TV viewing still has more time per day for the average consumer than any other medium. eMarketer estimates adults spend 4 hours, 24 minutes watching TV and offline video daily, vs. 2 hours, 35 minutes online.

And, TV has kept its share of total daily media time at around 40 percent. However, recent U.S. consumer surveys continue to highlight how most people consistently ignore or tune-out advertising messages. Meaning, the U.S. TV viewership trend clearly doesn't equate to actual advertising impressions.

While online video viewing has been on the rise, about 70 percent of the U.S. adult population still does not watch any full-length television programming on the internet. eMarketer believes those that do tend to prefer traditional TV viewing when possible.

As the viewing audience has kept its attention fixed on TV, so have advertisers continued to make it their greatest spending priority -- again, regardless of the reported advert-avoidance phenomenon.

eMarketer estimates TV spending will continue to rise this year after nearly double-digit growth in 2010. The presidential election and Summer Olympics in 2012 will give it a further boost, growing 6.6 percent to $64.5 billion next year.

Meanwhile, print media and telephone directories will continue to lose money as consumers shift their attention to the web. As newspapers and magazines work out online revenue models, traditional yellow-pages face potential obsolescence as they are replaced by online search -- even among older segments of the population.

How to Rank User Preference for Mobile Phone Apps

Creating a superior product design is part art, part science. How do you design a product that meets the needs of the mass-market, but still incorporates some new features that appeal to the early adopters? The simple answer is that you follow the insights and pointers that surface from studying the emerging trends.

But how does a product designer rank and select the sought-after features with the most user appeal when the realm of possibilities is virtually endless? In the case of mobile phone applications, reaching that objective can be a dynamic and moving target.

Although applications remain, as a whole, relatively stable as far as desirability is concerned, the competition for the number one position tends to be constant.

In 2009, GPS turn-by-turn directions was the most desired cellphone application. In 2010, it was still popular but fell to the number two position -- usurped by users desire to surf the Internet, according to the latest market study by In-Stat.

"The accelerated adoption of open operating systems has created an innovative environment unique to the cellphone market," says Greg Potter, Analyst at In-Stat.

With compelling user interfaces and applications creating competitive advantages, the market has shifted its focus from individual features to improving existing capabilities that will provide the best user experience.

Key findings from the In-Stat market study include:

- Nearly 60 percent of survey respondents indicated that their wireless plan would include voice, messaging, and data.

- The inclusion of a physical QWERTY keyboard is still the preferred method for inputting new contacts.

- At almost 90 percent, respondents said that having a speakerphone was the most desired feature.

- GPS directions and surfing the Internet were cited as something respondents were willing, or might be willing, to pay for.

Demand for Centralized Storage on Home Networks

The number of portable consumer electronics (CE) and computing devices in the home has grown over the last couple of years, with each new device creating more digital media content that ultimately must be stored and archived someplace.

Given this backdrop, the need and use for centralized Network Attached Storage (NAS) will become more practical for one reason -- content access. In a digital home network with multiple computing devices, sharing common storage, content access and media sharing becomes a key component of driving consumer value.

In-Stat says that, based upon the findings of their latest market study, they believe that this will push worldwide consumer NAS unit shipments past 11 million in 2015.

"The concept of centralized storage was originally developed for businesses where access to corporate information through a network connected to multiple devices provided a number of competitive advantages," says Norm Bogen, VP Research at In-Stat.

This context, where benefits are gained connecting multiple devices to a centralized network or storage system, never materialized in the home until recently.

Now, with so many different devices in the home, the value of centralized storage is becoming more apparent. The difference, however, is that the need for home network storage is driven by practicality, while in business the driver is efficiency.


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

- The consumer NAS market opportunity will continue to be driven by consumers that use a number of portable CE and computing devices in the home and demand remote access to their content.

- Europe will claim over 50 percent of all consumer NAS unit shipments in 2015.

- The estimated household penetration of consumer NAS in North America will be 4.4 percent at year-end 2015.

- Worldwide revenue for the consumer NAS market was approximately $678.4 million in 2010.

- The market, which is being led by Buffalo Technologies in terms of units shipped, also includes Apple, Cisco, D-Link, HP, Iomega, LaCie, NETGEAR, Seagate (Maxtor), Thecus, and Western Digital.

72.5 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 March 2011. Their latest market study surveyed more than 30,000 U.S. mobile subscribers.

For the three month average period ending in March 2011, 234 million Americans ages 13 and older used mobile devices.

Device manufacturer Samsung ranked as the top OEM with 24.5 percent of U.S. mobile subscribers. LG ranked second with 20.9 percent share, followed by Motorola (15.8 percent) and RIM (8.4 percent). Apple continued to gain share following the launch of the Verizon iPhone -- up 1.1 percentage points to reach 7.9 percent of subscribers.

72.5 million people in the U.S. owned smartphones during the three months ending in March 2011 -- up 15 percent from the preceding three-month period.

Google Android grew 6.0 percentage points to 34.7 percent market share, while RIM ranked second with 27.1 percent. Apple grew 0.5 points to 25.5 percent share, followed by Microsoft (7.5 percent) and Palm (2.8 percent).

In March, 68.6 percent of U.S. mobile subscribers used text messaging on their mobile device. Browsers were used by 38.6 percent of subscribers (up 2.2 percentage points), while downloaded applications were used by 37.3 percent (up 2.9 percentage points).

Accessing of social networking sites or blogs increased 2.6 percentage points, representing 27.3 percent of mobile subscribers. Playing games comprised 25.7 percent of the mobile audience, while listening to music represented 17.9 percent.

Why Legacy Marketers Drive All Display Ad Spending

Legacy marketers continue to merely shift their obsolete advertising approach online, rather than invest the time and effort to learn how to effectively utilize today's digital media self-publishing opportunities. These traditional marketers have created a revenue bonanza for online social networking sites -- who gladly sell them the display ad space.

Clearly, for those marketers that still see all marketing opportunites through the lens of traditional media buyers, writing a check to Facebook is a comforting alternative to embracing the disruptive transformation that's turning their whole world upside down.

comScore released an overview of the U.S. online display advertising market for Q1 2011, indicating that nearly 1.11 trillion display ads were delivered to U.S. Internet users during the quarter.

Facebook accounted for 346 billion impressions, nearly double the number it delivered in Q1 2010 -- and accounting for nearly one third of all display ad impressions delivered.

"The U.S. online display advertising market maintained its strong momentum from last year with a terrific first quarter," said Jeff Hackett, comScore executive vice president. "We are now seeing more than one trillion display ads delivered every single quarter and nearly 300 individual advertisers spending at least $1 million a quarter on display, numbers which underscore just how large and vibrant the online medium has become."

Facebook's market share has increased 15 percentage points from 16.2 percent in Q1 2010. Yahoo! Sites ranked second during the most recent quarter with 112 billion impressions (10.1 percent), followed by Microsoft Sites with 54 billion impressions (4.8 percent) and AOL, Inc. with 33 billion impressions (3.0 percent).

AT&T ranked as the top online display advertiser in the first quarter with 19.5 billion impressions, accounting for 1.8 percent of display ads. Experian Interactive ranked second with 16.6 billion impressions (1.5 percent), followed by Scottrade ranked third with 11.2 billion (1.0 percent) and Intuit with 11 billion (1.0 percent). Groupon entered the top ten display advertisers at #7 with 7.7 billion impressions (0.7 percent).

Additional findings from the comScore Q1 2011 study include:

- The top advertisers in Q1 by estimated share of online display ad spending were: AT&T (2.1 percent), Experian (1.9 percent), Scottrade (1.6 percent), Toyota (1.2 percent), and Netflix (1.1 percent). Rounding out the top ten were Intuit, Verizon, Progressive, Sprint Nextel and ING, each with 1.0 percent.

- The top consumer goods advertisers ranked by display ad spending were: Procter & Gamble, Mars, Kellogg’s, General Mills and Kraft Foods.

- 95 different advertisers delivered at least 1 billion display ad impressions and 293 advertisers spent at least $1 million on display ads during the quarter.

Top 3 World Regions to Drive Media Tablet Growth

The popularity and anticipated growth in the media tablet sector has upset the portable consumer device world marketplace. That said, the latest market study by In-Stat indicates that tablet demand isn't quite as global as you might think.

The top three world regions -- North America, Asia-Pacific, and Western Europe -- will be responsible for 91 percent of all media tablet unit shipments in 2015.

"There is obviously strong potential for tablets, as there has been with other mobile electronic devices. One key difference, however, is that the commercial market also represents a potential revenue opportunity for tablet OEMs," says Stephanie Ethier, Senior Analyst at In-Stat.

Usage models and user requirements will differ in the commercial market, but as the overall tablet market becomes more defined, the opportunities for tablets within business markets will become more apparent.

In-Stat's latest market research findings include:

- At over 129 billion units, portable media players (PMPs) represented the largest number of portable device units shipped in 2010.

- The e-reader market will remain primarily a North American market, with 58 percent of e-reader units shipped into North America in 2015.

- Personal navigation device (PND) shipments will peak in 2012 and then decline steadily over the remaining forecast period.

- Handheld game console shipments will grow approximately 20 percent over the next year as a result of the Nintendo 3DS launch.

Wealthy Americans Withdraw from Broadcast TV

eMarketer reports that affluent American's relationship with traditional media is in a state of transition, according to data released by The Affluence Collaborative. Moreover, among the younger members of the population, the current status is more negative than positive.

On the one hand, affluent internet users are still using print media. More than 20 percent of those with incomes of at least $500,000 spent 11 or more hours per week reading newspapers. This compared with just 6 percent of the general population. Affluents with incomes between $200,000 to $500,000 landed in between, at 9.1 percent.

Affluent's consumption of magazines also outstrips that of the general population. According to the same survey, 22 percent of affluent internet users earning $500,000 or more read magazines for 11 or more hours per week, contrasted with 4.5 percent of the general population.

Only 11.5 percent of those affluents rarely or never read magazines, while more than 30 percent of the general population said the same. As above, affluents with incomes of $200,000 to $500,000 fell in between the two extremes.

However, broadcast television has clearly lost its appeal. Affluents show a much lower consumption pattern than the general population. Nearly 40 percent of the general population watched 21 or more hours per week of television in February 2011, compared with 21.5 percent of the highest-income respondents.

More than 40 percent of affluents in both groups watch 10 or fewer hours of television a week, compared with 26.5 percent of the general population.

According to April 2011 data from the Luxury Institute, high-net-worth millennials (ages 35 and under) are replacing both television and print with digital media faster than their older financial peers.

Their combined average weekly time spent with online video (1 hour 40 minutes) and DVR (3 hours 47 minutes) was greater than the 4 hours 49 minutes spent watching live TV. Watching online video (78%) was more popular among wealthy millennials than reading magazines (76%) or newspapers (68%).

"This is clearly a tipping point," said Milton Pedraza, CEO of the Luxury Institute. "The rising generation of wealthy consumers are consuming media in vastly different ways than anyone did just a decade ago."

Worldwide Mobile Phone Market Grew 19.8%

The worldwide mobile phone market grew 19.8 percent year-over-year in the first quarter of 2011 (1Q11), fueled by high smartphone growth -- especially in emerging markets -- and gains made by market challengers.

According to the latest market study by International Data Corporation (IDC), vendors shipped 371.8 million units in 1Q11 compared to 310.5 million units in the first quarter of 2010.

Smartphone growth worldwide, particularly in Asia-Pacific (excluding Japan), Middle East and Africa (MEA), and Latin America, helped lift the overall market to a new first-quarter high.

Increasingly, mobile phone makers and carriers are making smartphones affordable to a wider variety of people, which has helped drive the market to new heights. Smartphone-specific vendors, such as HTC, continue to grow sales at a steady clip as a result of this trend.

"Several notable vendors, including feature phone makers, outpaced the overall market, which contributed to share losses of some top suppliers," said Kevin Restivo, senior research analyst at IDC. The growth of companies outside the top 5 vendors shows that the overall market is still very much ripe for share gains.

At the same time, feature phones have represented the majority of mobile phone shipments, but still are under tremendous pressure from smartphones. Even popular quick-messaging devices (phones with a QWERTY keyboard), once a bright spot within the feature phone market, appear to be losing market share as smartphones gain popularity.

Still, IDC does not expect feature phones to disappear quickly as there is still strong demand across the globe.

Nonetheless, IDC expects almost all of the worldwide mobile phone market's growth to be driven by smartphones throughout the forecast to 2015. Increasingly, smartphones will drive market growth. This means feature phone makers will either need to become smartphone dependent or consolidate that part of the market.

In the United States last quarter, Apple's iPhone and the LTE-enabled HTC Thunderbolt were two smartphones introduced at Verizon Wireless that helped keep the category front and center of the overall mobile phone market. Feature phones, including once popular quick messaging devices, continued to lose ground.

Mobile App Downloads Reach 44 Billion by 2016

A new market study by ABI Research reveals that the worldwide mobile applications (apps) industry is well on its way to achieving 44 billion cumulative downloads by 2016.

Google Android and Microsoft Windows Phone 7 are steadily catching up with Apple iOS as adoption picks up pace and expansion of their mobile Operating System (OS) installed bases continues to grow.

The mobile app ecosystem and market model is also expected to evolve with the increasing pool of smartphone and tablet users.

"Given the vast number of choices available, app developers and app stores need to innovate continually in order to maintain consumers’ interest," said ABI Research analyst Fei Feng Seet.

An app called OfferedApp promises to provide a paid app each day in exchange for users completing a simple survey or signing up for an offer with advertisers. Some apps also offer virtual currency or other premiums to consumers who download a featured app from the developer.

However these new marketing tactics are likely to face opposition as iTunes starts to clamp down on such incentivized promotions when they cut into Apple’s revenue from in-app sales.

iTunes is also rumoured to have made modifications to its App Store ranking algorithm: the new ranking system takes into account qualitative information such as reviews, on top of download statistics.

According to ABI practice director Neil Strother, "App store browsing on devices has been an issue with users, who can face difficulty finding an app of interest."

Having many misleading apps hogging the top charts for a week at a time does not help either, so this could not be a better time for Apple to reform its app ecosystem in an environment where competition and consumer heightened expections are increasing the pressure.

Digital Media Use Drives Home Networking Adoption

An increase in digital media use and networked devices in the home -- such as media tablets, set top boxes (STB), HDTVs, smartphones, and web-enabled media players -- has generated a much higher interest in and need for capable home network delivery systems.

Although Wi-Fi networks are still the most dominant form of home networks, the demand for more bandwidth-consuming applications is causing service providers to turn to wired networking solutions that can deliver higher speeds with more reliability than wireless 802.11x standards.

That demand propelled non-Ethernet home networking node shipments past the 40 million units in 2010, according to the latest market study by In-Stat.

"Wiring a home with Ethernet is costly and often requires service providers to send out technicians to drill through walls and pull Cat5 cabling," says Vahid Dejwakh, Analyst at In-Stat.

Instead, service providers are turning to existing home wiring, which can deliver their network -- such as power line, coax cable, and phone line.

However, not only is there competition over the type of wire to deliver the network, there are also different standards within each wire type that are not always interoperable. These standards currently include HomePlug, MoCA, and HomePNA.

In-Stat's latest market study findings include:

- HomePlug shipped the highest number of nodes in 2010.

- MoCA experienced the greatest compound annual growth rate (CAGR) of 46 percent over the 2007 through 2010 time period.

- China is expected to surpass the U.S. in 2011 as the country with the most home networks.

- HomePlug dominates Router/Gateway home networking units throughout the forecast period. The same cannot be said for set top boxes, which is dominated by MoCA.

- G.hn will make impressive gains in set top boxes, becoming the second most popular standard by 2013 and challenging MoCA by 2015.

Demand for Media Tablets, Notebooks and eReaders

If you're looking for signs that the U.S. economy is recovering and that business technology spending has returned, then you should look at the recent purchase activity on 3G and 4G non-handset devices -- such as media tablets, notebooks, and e-readers.

This segment of U.S. business spending has become a larger portion of the overall business wireless spend. According to the latest market study by In-Stat, overall spending in this segment was up nearly 30 percent in 2010 -- when compared with 2009 results.

"A key take away from the research is that the non-handset spending increase trend seems to be universal across all sizes of business," says Greg Potter, Research Analyst at In-Stat.

Apparently, there are several variations in some of the vertical segments but, they too, share a robust 2010 and have a very healthy five-year forecast.

Additional data points from the In-Stat study include:

Enterprise spending makes up over 62 percent of business spending on non-handset data services, spending over $1.9 billion in 2010.

Enterprise (1,000-4,999) will increase spending in 2011 by 19.5 percent in the professional services vertical.

Small Office Home Office (SOHO) spending will surpass $275 billion by 2014.

The healthcare and social services vertical represents the largest share of spending, over $400 million in 2010.

Pay-TV Subscribers Forecast at 1.4 Billion by 2014

Over the last twenty-four months the growth of pay-TV subscriptions has been very unpredictable, with some significant subscriber uptake differences -- depending on the market in question, and the type of services being offered.

Certainly, the reported worldwide economic challenges have negatively impacted much of the video entertainment sector, as consumers actively seek ways to reduce their monthly expenses.

However, the overall global market seems to be improving, as the total number of pay-TV subscribers by year-end 2010 were somewhat greater than year-end 2009 -- by a little over 6 percent, according to the latest market study by In-Stat.

"Nearly every region showed gains or held their own in 2010," said Stephanie Pickering, Industry Analyst at In-Stat. "However, cable providers were impacted, to at least some degree, by a migration to satellite and/or IPTV in virtually every region."

That said, it's very possible that the incumbent Cable pay-TV service providers, in some parts of the world, could introduce new lower-cost IP video offerings -- thereby accepting reduced revenue and profit margins, in recognition of the apparent differences in video entertainment consumer expectations.

In-Stat's latest market study highlights include:

- China has the largest number of pay-TV subscribers with over 160 million.

- The largest regional market of IPTV subscribers is Western Europe with nearly 17.5 million subscribers, of which France has over 10 million, led by Free and Orange.

- Net Servicos de Comunicacao of Brazil is the largest cable operator in the Caribbean and Latin America region.

- AT&T went from the sixth largest Telco TV operator in the world at the end of 2009 to the fourth largest in 2010.

- Total global pay-TV subscribers will approach 1.4 billion by 2014.

Mobile Barcode Scan Usage is On the Upswing

According to a recent eMarketer report, the creative application of mobile barcodes -- such as QR codes -- are a promising new tool for retail marketers that need to activate and measure the impact of static media, in-store displays and product packaging.

"Mobile barcodes hold promise for marketers as a mechanism for activating other media and providing a bridge between the physical and digital worlds," said Noah Elkin, eMarketer principal analyst.

But they also present challenges, including fragmentation between open and proprietary barcode formats and the requirement that consumers download a dedicated application to read the codes.

In Japan, where QR codes originated, 2-D barcode usage is very common. In other parts of the world, usage is on the upswing. So, where is the market growth to date?

According to 3GVision, an Israel-based provider of 1-D and 2-D barcode solutions, the top five countries in terms of barcode scanning growth in Q1 2011 were the U.S., UK, Netherlands, Spain and Canada.

For marketing applications, mobile barcodes hold potential for nearly every industry that needs to impart more information to consumers. And, with applications for retailers, to consumer products brands, to travel marketers, it's difficult to find industries that are not experimenting with mobile barcodes.

Given the emphasis on activating traditional media and enhancing the in-store shopping experience, publishers and retailers, not surprisingly, are leading the way across all markets.

A February 2011 market study by Vision Critical found that 65 percent of U.S smartphone users had seen a QR code. They most likely saw it on product packaging -- indicating where marketers may get the most benefit from using these barcodes.

People tend to apply barcode scanning to obtain information about products or services -- as well as gaining access to coupons and discounts. But there's an apparent difference between consumers who are merely aware of the barcode and have tried scanning them vs. those who scan them on a regular basis.

"Marketers need to work with their carrier and handset partners to capitalize on awareness of 2-D barcodes and push consumers toward adoption and repeat usage," said Elkin. "At this early stage, the more information the better about what content barcodes will activate, how to download the appropriate reader and how to activate the code."

eReader Demand Gains New Momentum in EMEA

According to the latest market study by IDC, more than 1.9 million eReader units were shipped in the EMEA region during 2010, with most of these distributed in Western European markets. Although EMEA accounts for just over 15 percent of the worldwide market, IDC forecasts sales to reach 9.6 million units by 2015 -- generating a 37.9 percent compound annual growth rate (CAGR).

Since their first appearance in 2007, eReaders have experienced much higher growth in North America than in EMEA, mainly as a result of the rapid uptake of Amazon Kindle devices by consumers in the U.S. market.

However, as many European markets experience double-digit growth rates, the EMEA region is now set to expand, roughly matching the size of the North American market by 2015.

Many factors are contributing to this growing trend. Firstly, e-ink technology and long-lasting battery charge have proven to offer an appealing reading experience for avid readers in EMEA -- which justifies the purchase of a specialized reading device instead of an LCD multifunctional device, such as a media tablet.

The price advantage also plays a key role in saving this product category from cannibalization. Current eReader prices are on average much lower than media tablet prices and are expected to decrease yet more throughout the forecast period. Growth potential has also been boosted by recent developments in the education sector.

After successful initial trials, eReaders are being implemented in universities, schools, and public libraries across main European markets as an additional consultation tool for students and users.

"The EMEA market for eReaders is still at an early stage," said Mario Lombardo, senior analyst at IDC EMEA. "Recent developments in the education sector, combined with the inevitable price decrease, are likely to convert these reading devices from trendy gadgets into very accessible commodity goods in the coming years."

In this industry scenario the only real revenue will come from digital content rather than the actual reading device sales. Leading vendors are clearly anticipating this trend and are increasingly positioning themselves as eBook providers rather than mere hardware vendors.

Although all the main vendors are eager to ensure access to content in different languages, availability of eBooks in languages other than English is still fairly limited. Therefore, the U.K. was the main market for eReader shipments in EMEA in 2010, followed by Germany and France.

After success in North America, Amazon has now established itself as a leading vendor in European markets. Having already been selling in Europe through its U.S. Web site for some time, in 2010 the company started direct sales of its Kindle eReaders through local Amazon Web sites in all the main European markets.

This has helped boost Kindle sales, enabling the company to overtake Sony in terms of shipments and capture more than 35 percent market share in EMEA in 2010.

Although eReaders will continue to mainly be a consumer product, the education sector will increasingly drive growth, especially as digital content will be made more available in different languages and the industry will converge even more to an industry standard digital format.

Apple iPad Reaches an 85 Percent Market Share

The Apple iPad commanded 85 percent of the market for media tablets in 2010, according to the latest market study by ABI Research. The tablet market surged in the second half of the year, but it wasn't just tablets.

According to senior practice director Jeff Orr at ABI, "Device categories including netbooks and mobile broadband-enabled eBook Readers showed gains in year-over-year shipment numbers in 2010. The hype that media tablets were displacing portable computers and dedicated CE device purchases simply didn't become a reality."

Samsung's Galaxy Tab ranked a distant second to the iPad in market share, with about 8 percent share, while Archos's Internet Tablet range just barely moved the needle at 2 percent. These top three vendors accounted for 95 percent of the media tablet market between them.

However that market share breakdown isn't carved in stone;

Orr says, "Many new entrants are looking to differentiate themselves from the $600+ ASP of the iPad, so low-feature and low-cost designs will become common. We expect between 40 and 50 million media tablets to ship worldwide in 2011."

So, what of the more distant future trends? There are some scenarios suggesting a possible leveling-off of media tablet demand around 2015-2016, but market and economic variables will multiply with each passing year.

"With increasing choices for consumers and greater opportunities for businesses to consider ultra-mobile devices, we expect multiple device categories to benefit in the near-term," adds Orr.

Global Mobile Payments Market Development Upside

When was the last time that you used a mobile phone to pay for a retail purchase? If you said never, well your answer to this question is likely to change in the foreseeable future. Here's the reasons why.

The growing adoption of web-enabled smartphones is becoming a catalyst to develop the market for mobile payment transaction volume. In fact, transactions will actually increase at a pace greater than the number of users, as individuals adopt mobile payment solutions for an increasing portion of their payments.

As consumers become more familiar with mobile payments, and as the number of retailers supporting these solutions increases, the rate of usage will increase exponentially.

Therefore, it's expected that the number of annual mobile payment transactions will increase to 45 billion in 2015, according to the latest market study by In-Stat.

"Despite mobile payment's perennial failure to launch globally, 2011 will be a significant year for market growth," says Amy Cravens, Senior Analyst at In-Stat.

The interest in mobile payments that's demonstrated by big players worldwide -- including banks, credit card companies, mobile operators, and handset or operating system providers -- is largely driving that upside opportunity. 

Areas expected to generate significant activity in 2011 include:

- Near Field Communications: 2011 is poised to be the year for NFC as it evolves from a concept to a strategy that is actively being pursued.

- Mobile web payments: A big growth area that is highly correlated to smartphone trends.

- App store billing: Handset manufacturers are partnering with mobile payment providers to enable carrier billing and improve consumer purchase experience and carry through.

- Micropayment: Using your mobile phone for small payments by deducting funds from a virtual wallet is gaining momentum.

- Intersection between payments and other applications: Mobile payment concepts are emerging as a means to improve the consumer shopping experience by communicating information and simplifying the shopping experience.

How Wi-Fi Direct Adds New Peer-to-Peer Applications

Wireless LAN technology is evolving and it's about to enable a new series of applications that could present both new challenges and opportunities to broadband service providers. Already on the market in small numbers, Wi-Fi Direct is expected to reach a breakthrough in 2011.

The number of Wi-Fi Direct-enabled devices shipped will reach 173 million, according to the latest market study by In-Stat. Devices shipping with embedded Wi-Fi Direct in 2011 will be led by desktop PCs, digital TVs, mobile phones, and notebook PCs.

Wi-Fi Direct creates a much more powerful Wi-Fi solution, as it enables the premier wireless networking standard to add peer-to-peer capability, with no need for a Wi-Fi access point.

This creates a much more compelling standard, a type of one-stop-shop for wireless connectivity, and brings Wi-Fi into competition with specifications such as Bluetooth. And because Wi-Fi Direct is software based, the marginal cost of Wi-Fi Direct-enabled silicon over basic Wi-Fi silicon is negligible.

"Wi-Fi Direct enjoys wide backing from Wi-Fi silicon vendors," says Brian O'Rourke, Research Director at In-Stat. "Companies such as Atheros, Broadcom, CSR, Intel, Marvell, Qualcomm, Ralink, and Realtek all have plans for widespread release of Wi-Fi Direct-enabled silicon."

In fact, many of these companies received Wi-Fi Direct certification for at least one chip solution in the fourth quarter of 2010, shortly after the specification was released by the Wi-Fi Alliance in October. Ultimately though, the key to Wi-Fi Direct's success will lie in the application programming interface (APIs) software that is developed to make Wi-Fi Direct useful to the consumer.

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

- Every PC, CE device, and mobile phone that ships in 2014 with Wi-Fi silicon will be Wi-Fi Direct-enabled.

- The Wi-Fi Direct-enabled device shipment compounded annual growth rate will be 79 percent between 2011 and 2015.

Asian Mobile Operators Offer Value-Added Apps

Mobile penetration and rapid adoption of broadband access continue to boost total service revenue for wireless operators, but the dilution of Average Revenue Per User (ARPU) -- due to multi-SIMs -- is a cause for concern, according to the latest market study by ABI Research.

Market data shows that 4Q-2010 has seen an increase of $1.4 billion quarter-on-quarter or 2.2 percent growth for Asia-Pacific total mobile service revenue. However, 4Q-2010 ARPU showed a decrease of 2.1 percent from 3Q.

"The overall contraction of ARPU is largely caused by the continued expansion of the subscription base, where remarkably one in five is a newly-added subscription that was not around a year ago," said ABI Research practice director Neil Strother.

More mobile network operators are looking for new ways to generate revenue, which include adding new interactive value-added service (VAS) applications such as mobile TV, mobile payments, mobile wallet, airtime transfer or even free music downloads which encourage more data usage.

With the launch of India's 3G networks, BSNL has also recently introduced VAS such as video SMS and video calls, in an attempt to capture more market share and encourage 3G service adoption.

Mobile phone service providers believe these new offerings will also be likely to improve customer retention -- due to their familiarity and commitment to the services.

The urgency in seeking improved loyalty could not come at a better time, as Mobile Number Portability (MNP) came into effect in January 2010 in India, and country-wide MNP requests crossed 3.8 million at end of February.