Technology | Media | Telecommunications

Friday, April 17, 2015

Wearable Devices will Aid Personalized Digital Marketing

Ever since the first clickable banner ad was produced in 1993, advertising on digital platforms has evolved. The growth in digital advertising has been aided by several improvements, such as programmatic media and big data.

The potential for targeted, personalized advertising -- enabled by new mobile device adoption -- is a key area of interest for digital marketers. Advertising spend on smart watches will reach $68.6 million by 2019, that's up from an estimated $1.5 million this year, according to the latest market study by Juniper Research.

The study found that market growth will be fueled by the entrance of high-profile brands, such as Apple, into the smart watch arena, combined with the ongoing mainstream acceptance of wearable technology.

Juniper believes that the emergence of an additional mobile screen would stimulate interest among advertisers. However, until a significant user base is reached, most ad-spend is likely to take the form of ad-hoc marketing campaigns.


Juniper also notes that leading brands will need to devise and implement new advertising formats, specifically designed to fit the limited size of a typical smart watch screen.

Additionally, the behavioral differences between smartphone and smart watch usage are likely to provide a further challenge. With the smart watch user viewing the screen for seconds, rather than minutes, advertisers will have much less time to engage people with their ad message.

Programmatic Advertising to Lead

Juniper also suggests that programmatic advertising is one of the main drivers within the digital advertising marketplace.

Real-time bidding for ads has evolved over the last couple of years from low levels of implementation to becoming an integral component in the digital advertising realm.

All types of advertising formats are now being traded between advertisers and publishers in the ad exchange markets, where it used to be a place where only the excess or remnant publisher inventory was bartered or sold.

Other findings from the market study include:

  • Native advertising formats are becoming popular due to their ability to mimic the look and feel of the webpage.
  • An evolving array of entities are involved in the digital advertising value network and the complexity is increasing as more technological advances come into the fore.
  • Rich Media advertisements are becoming increasingly prevalent, particularly with regards to in-app advertising.

Thursday, April 16, 2015

OTT Television Ad Revenue will Reach $40 Billion

Over-the-Top (OTT) content distribution has been a disruptive force in an otherwise status-quo video entertainment market. As the viewership of traditional linear broadcast TV continues a slow decline in mature markets, advertisers are seeking other ways to reach consumers.

Revenue from OTT television program advertising -- that is, commercial advertising placed in full-length TV-quality programming delivered via broadband -- is expected to grow nearly four fold between 2015 and 2020, according to the latest market study by TDG.

Their worldwide market study produced what represents the first publicly-available advertising forecast associated exclusively with the delivery of OTT TV content.

According to the TDG assessment, the average ad load for a 30-minute legacy linear program will decline by 38 percent between 2014 and 2020, from approximately eight minutes to around five minutes.

During the same forecast period, average OTT TV ad loads will increase 63 percent, from 3.2 minutes to 5.1 minutes, bringing OTT TV ad loads in line with that of legacy linear TV.


TDG believes that this shift in advertising load is not all bad for content networks.

"The value of legacy linear TV advertising in 2020 will be worth considerably more than today," said Alan Wolk, senior analyst at TDG.

New forms of advertising such as native and sponsored promotions could generate additional revenue and keep total TV ad revenue somewhat stable through 2020 -- producing zero growth in total revenue, but no decline, even as more ad budgets are shifted to OTT TV.

By 2020, OTT TV ad revenue will be approximately $40 billion, just under half of the 2020 projected $85 billion in total TV ad revenue. What's not clear, however, is if marketers will continue to invest in any form of advertising, when there are more effective means of reaching potential customers.

The TDG market study included an in-depth examination of the trends driving and inhibiting the shift from legacy to OTT TV advertising, as well as detailed forecasts for total TV ad revenue.

Wednesday, April 15, 2015

Mobile eTicketing is Gaining Momentum Worldwide

The volume of mobile and online ticketing in both the developed and developing parts of the world is increasing. Online ticketing, along with the increasing adoption of smartphones and tablets, has revolutionized the way consumers purchase e-tickets.

Global ticket purchases via mobile and desktop devices -- including smartphones, media tablets and PCs -- are forecast to reach 32 billion by 2019, that's up from an estimated 16.2 billion this year.

This represents a two-fold growth over the next 4 years, according to the latest worldwide market study by Juniper Research.

The new study found that with digital ticketing services developing fast across the transport and events sector, mobile handsets will account for more than 50 percent of all digital tickets purchased by 2019.

Airlines often use their mobile boarding pass facility as a stepping stone to mobile ticket purchase and further mobile service features. Typical examples include seat selection, actual arrival and departure times, flight schedules, mileage summaries, individual booking summaries and especially loyalty programs.


The research also found that in almost every market, metro and bus ticketing was being driven by smartphone usage. The low price, high frequency and high volume nature of metro bus ticketing was found to be particularly suited for mobile payments.

In addition, it was found that metro bus ticketing is gaining traction through bar-codes delivered via smartphone apps, and through SMS-based solutions -- with the latter witnessing impressive user adoption in European markets such as Sweden and Italy.

The Emergence of Wearable Ticketing

Juniper observed that ticketing software applications will become key for wearable devices, such as smart watches.

"Smart watches with NFC capability offer a convenient replacement for contactless debit-cards and smartphones. Integrating new devices and wearables should be a key strategic directive for all vendors across the ticketing value chain," said Nitin Bhas, principal analyst at Juniper Research.

However, the Juniper market assessment notes that a number of challenges, including scanning capabilities and battery life, needs to be addressed for wider adoption.

Other key findings from the study include:
  • Apple Pay will create a greater awareness of contactless payments via smartphones, resulting in higher adoption and usage of mobile ticketing.
  • One third of airline boarding passes will be issued via mobile devices by 2019.

Tuesday, April 14, 2015

How Over-The-Top Video Raises the Bar for Pay-TV

​Traditional pay-TV service providers in the developed markets have been reacting to ongoing customer churn. Overall growth is now forecast at only 3.7 percent CAGR through 2020, according to the latest market study by ABI Research.

In contrast, over-the-top (OTT) video services continue their strong growth, and should experience 26 percent total revenue growth in 2015 -- with a 24 percent CAGR through 2019.

With the growing popularity of independent OTT services, such as Netflix and HBO Go, customers are starting to demand a similar experience from their pay-TV subscriptions -- including features such as content search, recommendations and mobile device support.

Informed consumers will no longer accept legacy television offerings, as is. The bar of expectations has been raised by the OTT service providers that dared to re-imagine the video entertainment experience.

"Comparatively high priced pay-TV bundles are losing customers to more inexpensive, IP-delivered content," said Eric Abbruzzese, research analyst at ABI Research.

Some pay-TV operators may be able to combat the subscriber losses with the introduction of new set-top box (STB) technologies that utilize IP-capable hardware to deliver similar experiences to those third-party OTT services.

Operators that are first to market with new STBs can expect strong returns -- as much as 10 percent higher ARPU than with legacy technology -- while those introducing the technology later will likely struggle to see similar success.

ABI believes that multi-screen features have become compulsory, with the ever-increasing focus on mobile device usage, and is easily delivered as these more advanced IP-enabled STBs are deployed.

Traditional providers can also embrace lower-cost "pay-TV Lite" services to attract new customers. This potential expansion also helps to balance the financial risks associated with developing a new OTT product to the marketplace.

Those that have already embraced these ideas -- notably Comcast, Dish Network, Liberty Global, and BSkyB -- are on track to see future growth in an otherwise declining market. However, operators that are passive in embracing OTT face the challenge of maintaining subscriber counts -- even within their less-demanding customer base. Over time, even the late adopters will expect better offerings.

While legacy pay-TV will continue to hold majority market share in the near-term, the best chance for continued survival lies in the implementation of a progressive OTT service capability.

Monday, April 13, 2015

Worldwide, Most PC Buyers are Savvy Bargain Hunters

Worldwide personal computer (PC) shipments totaled 68.5 million units in the first quarter of 2015 (1Q15) -- that's a year-on-year decline of -6.7 percent, according to the latest global market study by International Data Corporation (IDC).

Following a strong second half of 2014, the PC market in the first quarter of this year faced multiple headwinds -- including inventory build-up of Windows Bing based notebooks, commercial slow down following the Windows XP refresh and constrained demand in many regions due to unfavorable economic conditions.

As a result, growth and volume declined with Q1 2015 shipments below 69 million units -- that's the lowest recorded volume since Q1 2009.

"Despite the decline, PC shipment in the United States declined at a slower rate than all other regions in first quarter, outperforming worldwide trends for the eleventh consecutive quarter. The strength from key vendors, adoption of emerging products, improvements in the consumer market and in the broader economy are all positive signals," said Rajani Singh, senior research analyst at IDC.


Although shipments did exceed an already cautious forecast, IDC Believes that the market remains heavily dependent on lower pricing, with entry SKU volume leading the demand in most markets.

The adoption of low-cost, open-source, Linux-based Google Chromebooks continues to set the precedent for affordable personal computing -- in the notebook PC category -- both within the consumer and enterprise segments of the market. The shift to Software as a Service (SaaS) and cloud storage has helped to fuel this pervasive trend.

Expensive high-performance PC models require heavy discounts and other promotions to reduce inventory, as consumers and commercial buyers look for bargains. Moreover, the savvy mainstream buyer tends to wait for the next round of new Microsoft Windows PC product introductions, then purchase the equally-capable prior models from the over-stocked retail inventory at a lower price.

Regional highlights from the study include:

United States – with shipments totaling 14.2 million PCs in 1Q 2015, the U.S. market shrank -1.0 percent from the same quarter a year ago. Growth was centered around emerging product categories -- such as Chromebooks and Convertibles. Desktop shipments were also relatively sluggish this quarter.

Europe, Middle East, and Africa (EMEA) – shipments of personal computers in EMEA contracted in the first quarter of 2015. The end of Windows PC promotions and unfavorable currency exchange rates led to a rise of average selling prices and a corresponding decline in PC shipments.

Asia-Pacific (excluding Japan) – volume was close to expectations, as scaled-back IT spending due to the ongoing currency fluctuation impacted countries in the region. Outside of the Lunar New Year effect, China was also impacted by excess commercial notebook PC inventory from earlier quarters.

Japan – volume declined -44 percent from a year ago. A strong Q1 2014 was significantly bolstered by commercial projects and consumer buy-in before a tax-hike, which set the stage for very difficult year-over-year comparisons. A weak Yen further dampened purchasing across segments.

Friday, April 10, 2015

Smart Government Initiatives Drive the Internet of Things

The evolving Internet of Things (IoT) sector within the Asia-Pacific region will continue its rapid expansion, with the number of units connected to increase from 3.1 billion today to 8.6 billion by 2020, according to the latest market study by International Data Corporation (IDC).

Over this same period, the total Asia-Pacific excluding Japan (APeJ) market size will increase from $250 billion to $583 billion in revenue.

"The Internet of Things industry has matured considerably over the past year, with a number of large government initiatives across APeJ, and China in particular, driving demand," said Charles Reed Anderson, associate vice president at IDC. "This increase in market demand has led to an increased focus on IoT from the leading ICT vendors."

China will continue to dominate IoT within the Asia-Pacific region -- accounting for 59 percent of the APeJ market opportunity by 2020 -- and is one of the leading markets globally with nearly 1 out of every 5 units connected by 2020 to be in China.


Assessing Market Size vs Market Maturity

"While the market opportunity in China dwarfs the other leading countries like South Korea, India, Indonesia and Australia -- in terms of dollar value -- that doesn't mean it is the most mature," adds Anderson.

To assess the maturity of a market, IDC compare the total number of things connected to the overall population to get a connections per capita figure.

Based on this calculation, they discovered that the top three most mature markets were South Korea, Australia and New Zealand -- with China ranked sixth out of the 13 APeJ countries.

Their Iot market forecast also looks at which industries are the pioneers of Internet of Things applications. Not surprisingly, Government agencies currently lead the way, as national, regional and city governments attempt to leverage IoT solutions to drive new revenue streams, reduce costs and enhance citizen services as part of their Smart Government initiatives.

According to the IDC assessment, other leading industries in the nascent IoT marketplace include Utilities, Discrete Manufacturing, Healthcare and Retail.

It's important to understand which key industries are driving the local market, since each country has its own unique set of market development catalysts. As an example, the leading industries in Singapore are Telecoms, Consumer and Transport -- none of which are ranked in the APeJ top five industries for market opportunity.

Thursday, April 09, 2015

The State of Broadband Internet Access in America

The seventeen largest cable and telephone service providers in the U.S. -- representing about 94 percent of the market -- acquired 3 million net additional broadband Internet subscribers in 2014, according to the latest market study by Leichtman Research Group.

Annual net broadband additions in 2014 were 114 percent of the total in 2013. These top broadband providers now account for 87.3 million subscribers -- with cable companies having 51.9 million broadband subscribers, and telephone companies having 35.4 million subscribers.

Other key findings from the market study include:

  • The top cable companies netted 89 percent of the broadband additions in 2014 – compared to 82 percent of the broadband additions in 2013.
  • The top cable companies added 2.65 million broadband subscribers in 2014 – 123 percent of the total net additions for the top cable companies in 2013.
  • The top telephone companies added about 345,000 subscribers – 72 percent of the total net additions for the top telephone companies in 2013.
  • AT&T U-verse and Verizon FiOS broadband subscribers now account for 53 percent of telco broadband subscribers – that's up from 37 percent at the end of 2012.
  • The top cable companies had 2.3 million more net additions than telephone companies in 2014 – compared to 1.7 million more net adds in 2013.

According to the Leichtman assessment, at the end of 2014, the top cable and telco broadband providers in the U.S. cumulatively had over 87.3 million subscribers, adding 3 million subscribers in the past year. Otherwise, little has changed in the marketplace (granted, Google Fiber is an anomaly).

Even in the most developed metropolitan markets, broadband service providers still operate in a duopoly environment -- where one dominant cable company and one telco provider serve a captive customer base that has few, if any, alternative choices.

While about four of every five U.S. households now subscribe to broadband at home, there were more broadband net additions in 2014 than in 2013. This was the first year-over-year increase in broadband net adds since 2006 over 2005. Clearly, that's a very welcomed sign of progress -- even if it took a decade to achieve.

However, in order for the major commercial centers within America to be equipped to compete with their leading peer-group cities in the Global Networked Economy, more broadband service provider competition is required to stimulate further [new] infrastructure investment.

Net Neutrality and Other Policy Distractions

Today, the status-quo agenda of federal, state and local government public policy clearly doesn't create the environment for meaningful and significant change. There's little incentive for the two incumbent service providers in each municipality to aspire to better serve their customers with improved broadband performance at a more competitive price.

Moreover, a continued policy focus on the Americans that live in remote or rural parts of the country, who often have no wireline broadband provider, is a distraction from the much greater economic development issue -- that being the globally inferior broadband offerings in the nation's primary centers of commerce.

The rapidly evolving Global Networked Economy of the 21st Century will continue to punish the strategic complacency of political leaders that see the world as it used to be, not as it really is today. This emerging new economy, that favors the bold application of digital business transformation, will reward those forward-thinking nations who apply their superior infrastructure to ensure continued prosperity.

Wednesday, April 08, 2015

How Open Source Advances All Mainstream Computing

Those of us that follow trends in the global consumer electronics market knew that this day would come.  ​Media Tablets will overtake Notebook PCs as the largest mobile computing category this year, according to the latest worldwide market study by ABI Research.

Tablets, now viewed by many analysts to be in direct competition with all forms of notebook PCs, will gain a 52 percent majority share of the mobile computing market by the end of 2015.

ABI Research forecasts the flat overall growth of the notebook PC segment, due to longer replacement cycles and device competition, causing notebook devices to drop from 51 percent market share in 2013 to 48 percent in 2015.

Moreover, the current downward trend will continue beyond this year. Notebook PC market share is forecast to decline again to 47% by year-end 2016.

Although some tablets are competing for share of wallet with notebook PCs, most tablets serve a niche that emphasizes portability and connectivity to the Internet -- where the common computing resources and information repositories reside.

Cloud Computing Fuels Market Segmentation

"Notebooks offer a combination of portability and productivity that has yet to be achieved by any other portable mobile computing device," said Stephanie Van Vactor,  research analyst at ABI Research.

However, while tablets are still very popular -- in both the consumer and enterprise sector -- the adoption rate is beginning to slow, which demonstrates that these devices do not serve the same purpose as the more capable notebook PCs.

According to the ABI assessment, Chromebooks (at the lowest price point) and Ultrabooks (at the highest price point) are experiencing demand in the market and are forecast to reach a combined growth of 47 percent for the calendar year 2015.

That said, the ongoing shift to cloud computing -- and Software-as-a-Service (SaaS) in particular -- will continue to drive further market segmentation, where a limited number of use-cases require the application software to run on a notebook PC.

Low-cost, purpose-built, mobile devices -- such as Google Chromebooks and Android tablets -- take advantage of the pervasive trends, by giving the device end-user the best value for their common computing needs.

Both devices apply open-source models to achieve their goals of enabling affordable and efficient mainstream personal computing advancements. It has become crystal clear, a community-powered approach to develop new hardware and software solutions is the forward-thinking methodology for progressive market development.

Tuesday, April 07, 2015

Mobile App Revenues will Reach $99 Billion in 2019

The market for mobile software applications has evolved dramatically over the past 6 years. However, just 1 percent of applications are now paid for at the point of download.

The vast majority of mobile apps are monetized through advertising, or through either subscribing to content post-download, or through a series of one-off purchases of premium content.

Annual revenues from mobile apps accessed via mobile handsets and tablets are expected to reach $99 billion by 2019, according to the latest worldwide market study by Juniper Research.

The research found that while games would continue to account for the largest share of revenues for the next five years, highest growth would be experienced in areas such as lifestyle applications -- such as dating and navigation -- and via eBook sales.

Mobile App Payment Evolution

According to the Juniper assessment, a significant proportion of online dating activity is now migrating to mobile devices -- with dating accounting for four of the top twenty grossing UK iOS apps in early-2015.

The global study findings argued that with online dating now mainstream, most net growth in the sector is likely to occur via smartphone usage.

Meanwhile, the research observed that navigation apps continued to buck the trend towards freemium and use a  Pay Per Download (PPD) model, with many apps charging a high ($50 plus) one-off price.

However, Juniper believes that even here the model was expected to transition to a subscription-based model -- with features including live traffic updates allowing for ongoing revenue streams.


Few Companies Offer App Stores

Additionally, the research confirmed that while a few mobile network operators still maintained app storefronts, these now accounted for less than 2 percent of app downloads worldwide.

"Operators have finally recognized that they cannot compete with Apple and Google from a content distribution basis. If they are to monetize content, that revenue has to come from bundling content into subscriptions or through leveraging the billing relationship," said Dr Windsor Holden, head of forecasting and consultancy at Juniper Research.

Other findings from the market study include:
  • More than 235 billion apps will be downloaded worldwide this year.
  • Baidu in China is now the second-largest storefront, behind Google.
  • Barely 1 percent of all application purchases are now paid for at the point of download.

Monday, April 06, 2015

Internet of Things Creates Upside in the Vending Industry

Vending in its earliest known form dates back to 215 BC in ancient Egypt, where a device has been identified that dispensed holy water at places of worship when a coin was deposited. In the U.S. market, vending is generally conceded to have begun in 1888 with the Adams Gum company and their penny gum dispensing machines.

Today, the vending machine industry is a global phenomena, and it is now part of the growing Internet of Things (IoT) connected device market opportunity. There are more than 17 million vending machines worldwide. The world's vending operators have either installed or are now considering adding Internet connectivity.

The global installed base of connected vending machines grew by 18.4 percent to 1.16 million units in 2014, according to the latest market study by Berg Insight.

Around 0.56 million of these machines have been installed in North America, whereas 0.15 million of the machines were located in Europe.

The number of connected vending machines in other parts of the world was 0.45 million, mainly in Japan and Australia.

There's already an emerging upside market opportunity. Berg Insight forecasts that the number of connected vending machines worldwide will grow at a CAGR of 18.5 percent to reach 2.7 million units by 2019.

As a result, the global penetration rate will reach 15.3 percent at the end of the forecast period.

The connected vending market has gained momentum as vending operators have started to deploy cashless payment systems and vending telemetry solutions at a larger scale.

The main market driver is currently cashless payments, which has become more and more important as the world moves from coins and bills to electronic payments such as credit cards and mobile wallets.

Vending telemetry solutions are expected to have a more transformational effect on the industry in the coming years.

"The availability of machine data in real-time coupled with state-of-the-art software platforms make it possible for vending operators to reach entirely new levels of operational efficiency," said Lars Kurkinen, senior analyst at Berg Insight.

Vending operators that learn how to benefit from the real-time availability of vending machine data in the best way will have the highest chances of prospering in the vending industry in the next decade.