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Thursday, October 08, 2015

Outlook for Next-Generation Wi-Fi Hotspot Deployments

The near ubiquitous inclusion of Wi-Fi on smartphones ensures that this wireless technology is becoming a key component of forward-looking mobile service provider business strategy. Wi-Fi will likely support much of the data-intensive wireless traffic, but emerging applications for the Internet of Things (IoT) creates new challenges.

Wireless broadband subscriber demand has already driven changes in market development approaches. Mobile network operators are now increasingly relying upon public Wi-Fi hotspots to support their broader commercial goals and objectives.

According to the latest market study by ABI Research, they forecast that included within the massive global Wi-Fi coverage anticipated in 2020, at least 6 million public locations will support Hotspot 2.0 technologies and associated capabilities.

Although a number of mobile service providers have already upgraded, or committed to upgrade, their public Wi-Fi networks to support next generation Hotspot 2.0 technologies, the adoption remains slow at this time.

Initially, Hotspot 2.0 offered seamless discovery and access, which can potentially enhance the user experience and attract more engagement with the service offerings. Mobile network operators, however, still lack the service delivery platforms to generate revenue streams from this technology.

"Hotspot 2.0 will evolve to allow operators higher flexibility for supporting different policies, which in turn, will encourage implementation of innovative business models, and ultimately wider market adoption" said Ahmed Ali, research analyst at ABI Research.

ABI believes that the rise of IMS-enabled Wi-Fi voice-over-IP (VoIP) communication has boosted confidence in the upside potential for Wi-Fi voice service capabilities, and perhaps there's a much larger role for Wi-Fi technologies within current 4G and emerging 5G mobile networks.

Many mobile network operators that have deployed the technology in countries such as the United States, the United Kingdom, Australia, South Africa and Hong Kong, have launched the service with VoLTE side by side, aiming for a complete seamless voice experience and driving the usage to five-fold by next year.

Migrating to the 802.11ac Wi-Fi standard is another top priority for mobile network operators -- with the primary use-case being hotspot capacity upgrades, in order to release or avoid congestion problems within public spaces.

Following the residential and enterprise Wi-Fi deployment pattern, now metro dual-mode access point shipments should rapidly grow to dominate a significant part of the mobile network vendor equipment marketplace.

"Overall, investment in carrier Wi-Fi solutions remains significant, despite the emergence of seemingly competing technologies like LTE-U and LAA.  User demands as well as competition from other network operators -- such as cable companies -- drive market activity and business case creation," adds Ali.

Wednesday, October 07, 2015

Internet of Things Demands New Battery Technology

As the Internet of Things (IoT) evolves, and more wireless device applications require smartphone tethering in order to function, there's a key component that has the potential to severely limit progress -- the rechargeable battery.

Batteries and charging capacity are two of the biggest limitations of most mobile devices. While the computing, display, audio and connectivity capabilities of these devices have accelerated at a rapid pace, power capacity of lithium-ion batteries has barely increased by around 6 percent each year.

That said, battery-charging technology is about to get a boost. Juniper Research has found that wireless charging is poised to change the way consumers interact with their cars, with an estimated 50 million vehicles offering built-in wireless device charging by 2020, compared with only 4 million this year.

The latest Juniper market study found that the technology will enable a range of new in-vehicle services, such as on-board audio streaming and context-specific app notification filtering -- all made possible through the data exchange and constant power supply.

This advancement will also enable automakers to provide new software-based services through streaming notifications from a smartphone to the vehicle dashboard, rather than needing to constantly update on-board firmware.

"For wireless charging to truly succeed, mobile carriers and phone retailers need to provide consumers with an option for wireless chargers supplied with new devices," said James Moar, analyst at Juniper Research.

With no established standard for wireless charging, manufacturers have been hesitant to adopt the technology for fear of committing to a system that could soon be obsolete. As a result, several manufacturers have begun to provide solutions that cater for two specifications -- Qi and A4WP/PMA.

These de-facto wireless charging solutions are helping to overcome compatibility problems, but as they require more complex components than those geared to a single specification it will keep prices relatively high.

Besides, while several smartphone brands have already incorporated wireless charging capabilities into their handsets, the people who already own these new devices are often unaware of the feature.

This will change as more smartphone brands begin to promote the benefits, with the Samsung Galaxy S6 being the current trailblazer. However, in the short term, most smartphones will continue to be shipped with a wired charger.

Other key findings from the study include:
  • Over a third of all smartphones shipping in 2020 will have wireless charging capability built in, with more older devices enabled by accessories.
  • As well as being present in smartphones, PC makers will harness the technology, with nearly 20 percent of in-use portable computers being capable of charging wirelessly by 2020.

Tuesday, October 06, 2015

IoT Connected Device Revenue will Reach $74 Billion

The Internet of Things (IoT) enables the potential for many new categories of connected devices. In the near term, smart wearables will likely be first to disrupt the consumer electronics landscape, as mind-share and eventually revenue shift from PCs and smartphones to these new devices.

Connected device competition will intensify as vendors compete for the nearly $74 billion in new revenue that will be available by 2020, with smart watches accounting for more than $50 billion in revenue, according to the latest market study by Technology Business Research (TBR).

"Most wearables require a mobile device, PC or both for users to gain the most functionality, helping keep PCs and smartphones in the purchasing conversation, especially in consumer markets," said Jack Narcotta, analyst at TBR.

However, as component and chip makers -- such as Intel, Samsung and Qualcomm -- innovate in areas like processors, displays and batteries, smart wearables will become more advanced and autonomous, relegating PCs and smartphones to mere supporting roles.

TBR research uncovered that most people will choose the connected device they need for a specific task or activity, just-in-time, and they view the PC and smartphone as their information and connectivity hubs.

That being said, TBR believes the influx of smart watches creates opportunities for PC and mobile vendors to strengthen the role and appeal of their legacy devices -- even if they do not participate in the smart watch market.

However, as PC and smartphone user attention shifts to smart wearables, revenue and profit growth from these traditional product segments will surely contract. In fact, consistent year-to-year revenue declines experienced by vendors in the TBR benchmark study amplify the pervasive trends.

While TBR estimates total device revenue for 2Q15 rose 7.9 percent year-to-year to $109.1 billion, the Apple iPhone revenue of $31.4 billion accounted for 28.7 percent of total device revenue in 2Q15.

Apple's 58.8 percent year-to-year revenue growth served as a stark contrast to the cumulative 11.1 percent decline of all remaining vendors and segments.

According to the TBR assessment, companies prepared for changes in customer purchasing behaviors and device use-cases will win in these new markets, and those that capitalize on the smart wearables opportunity will strike a balance of making quick decisions to enter the market and cultivating longer-term strategies that identify the next steps to protect legacy core businesses.

Monday, October 05, 2015

Asia-Pacific and North America Lead Cloud IT Market

Vendors that are still focused primarily on the traditional data center environment will likely continue to experience shrinking market share, as cloud computing applications gain new momentum -- which, in turn, generates more demand for different IT infrastructure.

According to International Data Corporation’s (IDC), vendor revenue from sales of infrastructure products (i.e. server, storage, and Ethernet switch) for cloud IT, including public and private cloud, grew by 25.7 percent year-over-year to $6.9 billion in the second quarter of 2015 (2Q15).

The overall share of cloud IT infrastructure grew by 31.4 percent in 2Q15 -- that's up from 26 percent a year ago. Revenue from infrastructure sales to private cloud grew by 19.5 percent to $2.8 billion, and to public cloud by 30.4 percent to $4.1 billion.

In comparison, revenue in the traditional (non-cloud) IT infrastructure segment decreased by -3.5 percent year over year in the second quarter, with declines in all of the three primary technology segments -- servers, storage and Ethernet switch.

All three cloud computing technology markets showed strong year-over-year growth in both private and public cloud segments, with Ethernet switches experiencing the highest growth in private cloud at 30.1 percent and servers with the highest growth in public cloud at 36.6 percent.

"Cloud IT deployments continue to drive overall IT infrastructure growth, as customers modernize their workload portfolios onto a broad array of hybrid deployment scenarios," said Kuba Stolarski, research director at IDC.

IDC believes that as cloud service providers continue to expand their data center footprints to meet growing cloud services demand, enterprises will increasingly rely on a variety of X-as-a-Service offerings and traditional hosting to help meet the performance, manageability, time to deployment, and TCO requirements of their organizations.

Besides, both private and public clouds will continue to see growing demand from customers who look to optimize their workload deployments based on their own uniquely and varied use-case requirements.

At the regional level, vendor revenues from cloud IT infrastructure sales grew fastest within Japan at 64.8 percent year over year, Asia-Pacific (excluding Japan) at 49.9 percent, Canada at 40.0 percent, and the U.S. market at 23.5 percent.

However, according to the IDC assessment, Central and Eastern Europe declined at -18.0 percent year over year, as the region continues to go through political and economic turmoil, which of course impacts overall IT spending.

Friday, October 02, 2015

Consumer Satisfaction with Smart Home Automation Apps

Within the mainstream marketplace, the notion of an Internet of Things (IoT) still translates into having more potential applications in the home, popularized by innovations like smart thermostats that learn from the user's personal preferences. That said, this is very much a nascent market.

Smart Home devices are supposed to make life easier for the people that use them, but according to the findings from the latest market study by Argus Insights, consumer satisfaction is slowly rising while overall demand continues to decline.

Connectivity has been accomplished, but future success of the smart home market will depend on how smart the products can really be -- making life better for the user, in some perceived or quantifiable way.

According to the new data, distrust from consumers about the reliability of these connected devices is obstructing growth in adoption and that, along with a steady drop in demand, may lead to a challenging holiday sales season for home automation companies.

Argus Insights research and analysis of 45,000 consumer reviews sourced from around the world demonstrates that there is a slow improvement in satisfaction, particularly among home automation customers with smart light bulbs and security kits or hubs.

However, the greatest consumer disappointment was in the category of security cameras. Their report takes a deeper look at user response to security systems -- in particular products from Canary and SimpliSafe, plus several home security cameras.

"These devices are still designed more for the Internet of Things than the Internet of Humans. Mainstream consumers were burned last holiday season by installation and reliability issues and though the remaining consumers in the market overall like these products more, the issues that forced out mainstream adopters after Holiday 2014 remain," said John Feland, CEO at Argus Insights.

Other key findings from the market study:

  • Delight for Smart Home devices is experiencing a slight uptick as companies work to make life easier for consumers.
  • Products that deliver on the promise of a better life in a way that is easy to install and maintain are driving up delight metrics.
  • Distrust from consumers about reliability of the products along with a drop in demand could lead to a disappointing holiday season for Smart Home device manufacturers.

Security Kits and Hubs are the leading the Smart Home device market. SimpliSafe leads in customer satisfaction for its painless installation, intuitive interface and overall value.

Canary, one of SimpliSafe's main competitors, entered the market strong, but more recently users have been complaining of spotty network connection temporarily disabling the device. Therefore, its unreliability is driving down consumer satisfaction.

Nest is recovering from its not-so successful debut. Consumer perceptions of the Nest Cam have increased almost 20 percent since launch, indicating that some of the early issues are being addressed and new customers feel the product is starting to deliver on the Nest brand promise.

Still, according to the Argus assessment, most consumers believe that it's not reliable enough to use as a security camera because of weak mobile notifications and video streaming capabilities.

Thursday, October 01, 2015

IT Security Revenue will Reach $118 Billion by 2019

According to the latest worldwide market study by Technology Business Research (TBR), total revenue for IT security hardware and software products -- including managed and hosted security services -- totaled nearly $50 billion in 2014 and will grow at an 18.9 percent CAGR to more than $118 billion by 2019.

"Customers are opening their wallets in an urgent effort to protect their data and their reputations from increasingly sophisticated attacks," said Jane Wright, senior analyst and security research lead at TBR.

According to the TBR assessment, cyber criminals and hackers are exploiting enterprise user endpoints to infiltrate and navigate customer infrastructures and steal data or disrupt business operations.

To block the attacker entry points, enterprise IT managers will increase their spending for endpoint-based advanced threat detection and response solutions, which will propel revenue growth in the endpoint security segment to an estimated 23.2 percent CAGR through 2019.

However, TBR believes that the top vendors based on endpoint security revenue will command a much smaller combined share of the segment in the future.

More vendors are emerging to address the enterprise endpoint security demands with new technologies, and TBR expects these vendors to capture larger segment shares over the next five years.

Network security revenue growth will slow during the TBR forecast period as customers focus more IT security spending outside of their increasingly porous networks.

To date, network security products account for about 25 percent of the enterprise security market revenue, but TBR believes this will decline to approximately 20 percent by 2019. Moreover, within the network security segment, they expect a major shift among some of the largest vendors.

Vendors are enhancing their security information and event management (SIEM) solutions with more advanced threat protection capabilities such as real-time detection, multi-vector analysis, behavior-based algorithms and more extensive forensics. This has created a new type of product that TBR calls "SuperSIEM."

"The improved threat detection and response capabilities enabled by SuperSIEMs will make a big difference in how well customers are protected from the attack techniques that hackers devise in the future," adds Wright.

Wednesday, September 30, 2015

Cloud Demand Evolves and Tablets Reach Saturation

Personal computing device requirements are shifting across the globe, creating challenges for consumer electronics vendors who must respond to these evolving trends. Cloud computing adoption has contributed to the shift in demand, with pervasive mobile internet access being the enabler.

The worldwide installed base of media tablets will become the next casualty of global market saturation, as shipments of the expensive larger slate devices continue their ongoing decline.

Early media tablet sales in 2010 and 2011 enjoyed several good years of consumer usage with both Apple iOS and Google Android devices actively used for three to four years.

New market intelligence data from ABI Research predicts the installed base of tablets will decrease for the first time in 2016 -- as growth from first-time buyers shifts to limited replacement purchases.

"The global installed base of branded tablets will peak around 373 million units at the close of 2015," said Jeff Orr, Research Director at ABI Research.

Led by North America at 48 percent of the installed base, the operating system mix is expected to be more balanced with 50 percent powered by Android, while 42 percent will use iOS.

According to the ABI assessment, with the recent slowdown in first-time tablet purchases, there are several reasons for change within the tablet installed base.

Replacing tablets with tablets: The experiences with first-generation tablets greatly influence what audiences will purchase the second time around. Unique software apps or content, usability, and durability all play a role in the decision-making process.

Replacing tablets with phablets: A converged solution that marries the best of the smartphone (mobility and cellular voice service) with the larger display of a tablet. Phablets are an increasing percentage of smartphone shipments and are a mobile alternative to replacing a tablet.

Replacing tablets with 2-in-1 PCs: For small business owners looking to maintain the productivity of a PC with the mobility of a tablet, choices for 2-in-1 systems are increasing and now available with Windows 10 OS. Low-cost Chromebooks will also be a viable option for some use-cases.

No replacement purchase: Not all tablets will be replaced. Some get handed down or resold while others stop working or go unused in favor of performing activities on some other device.

"The change is an opportunity for both incumbent media tablet vendors as well as challenger brands and form-factors," adds Orr. We'll have to wait and see how the leading consumer electronics companies respond to the challenge, and how cloud services drive this change.

Tuesday, September 29, 2015

Over-the-Top Voice App Services will Reach $10 Billion

Most modern smartphones can connect to Wi-Fi routers for broadband internet access. Voice calls placed over that connection, via a software app that converts voice to data, can provide superior quality communication when compared with the cell provider's mobile network.

There are now numerous ways to apply this capability, essentially bypassing the mobile network service provider's traditional offerings. As awareness of these use-cases increase, so does market adoption.

Over the Top (OTT) voice app service providers are expected to see an increase in their revenues by 2020, reaching over $10 billion and representing a five-fold increase over the next 5 years, according to the latest global market study by Juniper Research.

Moreover, their market study uncovered that OTT mobile software application providers -- such as Skype and WhatsApp -- would experience a significant rise in traffic and revenue potential as 4G network roll-outs accelerate, thereby increasing their capability to offer high-quality VoIP (Voice over IP) calls.

The worldwide research found that as most mVoIP capabilities were offered as a free or low-cost service, only a small minority of OTT players had generated a significant revenue from their offerings. That said, these apps are highly disruptive to the mobile network provider business model.

Juniper analysts observed that with traditional mobile network operator voice revenues in sharp decline, often as a direct result of smartphone app adoption, several incumbent mobile operators have tried new business models that copy the capabilities of successful OTT app providers.

These competitive strategies include directly offering functionality such as VoLTE (Voice over LTE) and 'operator approved' Wi-Fi calling through the smartphone.

The research also argued that white label OTT services, such as the Fring Alliance, are becoming increasingly important in an attempt to help legacy mobile operators compete with the OTT business model.

However, Juniper analysts caution that such initiatives historically have poor results -- with both the Telefonica TuMe and O2 TuGo service having been discontinued due to low consumer interest and adoption.

Other key findings from the study include:

  • VoLTE will see widespread adoption among MNOs, with operator billed VoLTE revenues approaching $100 billion by 2020, representing 12 percent of the global operator billed service revenue including voice and data services.
  • HD voice adoption has been steadily rising since 2009, with over 130 operators worldwide offering Mobile HD Voice.

Monday, September 28, 2015

Evolution of IT Security Demand Creates Opportunity

IT security is top-of-mind in most enterprise organizations. It's no surprise, given recent events. Worldwide spending on information security will reach $75.4 billion in 2015 -- that's an increase of 4.7 percent over 2014, according to the latest market study by Gartner, Inc.

The increase in spending is being driven by government initiatives, demand for new regulations or legislation and ongoing high-profile data breaches. As a result, affordable security testing or auditing, IT security support outsourcing, and identity or access management present the greatest growth opportunities for technology vendors and cloud service providers.

According to Gartner, spending in areas such as network endpoint protection platforms and consumer security software is starting to see commoditization, leading to a downgrade in the forecast for these established segments during 2015.

While the visibility and growing awareness of the impact of cyber threats keeps attention on security, the bulk of the security software market is composed of mature technology areas where the penetration rate is already high.

"Interest in security technologies is increasingly driven by elements of digital business, particularly cloud computing, mobile computing and now also the Internet of Things (IoT), as well as by the sophisticated and high-impact nature of advanced targeted attacks," said Elizabeth Kim, research analyst at Gartner.

This shifted focus is driving investment in emerging offerings, such as endpoint detection and remediation tools, threat intelligence and cloud security tools, such as encryption. However, strength in these emerging segments cannot compensate for the downgrade of the larger mature segments that are being commoditized.

Other information security market trends include:

Price increases of as much as 20 percent will drive some organizations to forgo security purchasing in 2015, especially in Europe. This trend will create market opportunities for vendors with alternative business models and lower costs, such as more open-source based solutions.

For the past three years, lean-forward organizations have been wary of an advanced-threat environment in which bad actors innovate faster than traditional blocking mechanisms, such as firewalls, intrusion prevention systems (IPSs) and secure Web gateways, can react.

In response, the most widely adopted advanced-threat detection technique deployed is network malware sandboxing, which has appealed to well-staffed incident response teams.

Recently, several high-profile breaches have broadened the perceived need for zero-day malware detection in a sandbox, but it can increase costs for the midsize or under-staffed security client.

Incumbent security platform vendors introduced less costly, often cloud-based, malware detonation sandboxes as platform extensions. That being said, there is growing demand for more automated lower-cost solutions in the global marketplace.

Friday, September 25, 2015

User Experience and New Apps will Expand Wearables

A growing list of vendors, a proliferation of devices, superior user experiences, affordable price points, and steady adoption with more use-cases will fuel growth in the worldwide market for wearable devices.

According to the latest global market study by International Data Corporation (IDC), wearable device shipments will reach 76.1 million units in 2015 -- that's up 163.6 percent from the 28.9 million units shipped in 2014.

By 2019, worldwide shipments will reach 173.4 million units, resulting in a five-year compound annual growth rate (CAGR) of 22.9 percent. Total shipments include both basic and smart wearables, which are two very different product categories.

"Smart wearables only account for about a third of the total market today while basic wearables, led by fitness trackers, account for the rest," said Jitesh Ubrani, senior research analyst at IDC.

Driven by advancements in user interface (UI) and product features, smart wearables are on track to surpass the lower priced, less functional basic wearable category in 2018.

IDC believes that smart wearables will quickly move from being a smartphone accessory, primarily focused on notifications, to a more advanced wearable computer that's capable of doing more processing on its own.

Driving the market and gaining attention is smart wristwear -- including watches and bands, which are capable of running third-party applications. This includes the Apple Watch, Motorola's Moto 360, Samsung's Gear S-series, and Pebble's Time.

"We are at a stage now where more vendors are getting into this segment, setting the stage for more selection and ultimately more volumes," said Ramon Llamas, research manager at IDC.

However, potential buyers that are uninspired by the use-cases for currently available products will be more interested once the second- and third-generation devices come to market with improved hardware capabilities and advanced software applications.

Looking ahead, customers will need to pay close attention to the different operating systems that power smart wristwear. Different smart wristwear operating systems are compatible with certain smartphone operating systems, and sometimes with specific models.

Beyond that, creative user experiences and available new software applications will vary. According to the IDC assessment, just as competition already exists for different smart wristwear designs, this competition will evolve into the operating system and associated software app landscape.