Technology | Media | Telecommunications

Wednesday, June 30, 2010

55 Million Smartphones Ship in First Quarter 2010

The smartphone markets around the globe continue to build upon their strong 4Q-2009 performance in the first three months of 2010. According to the latest market study by ABI Research, a little more than 55 million smartphones shipped during the quarter.

In fact that represents a drop of about one million compared to 4Q-2009, but seasonal sales cycles always produce lower results in the first quarter of any year compared to the previous quarter.

According to ABI senior analyst Michael Morgan, "Normally we would see a much greater decline in shipments in the first quarter; the fact that the drop was so relatively small highlights the continuing dynamic growth of the smartphone market."

Much of the fastest growth is being seen in markets that previously had little penetration by expensive, cutting-edge smartphones. With new less expensive models becoming available, the global smartphone market is becoming much more diverse.

An example is provided by Nokia. Its shipments rose QoQ from 20.8 million to 21.5 million despite the usual quarterly decline, building on an explosive last quarter of 2009 which saw the firm's smartphone shipments expand 25 percent.

Growth came largely on the strength of its new models -- such as the “C” and “X” lines which are really experience-focused, lower-cost smartphones that directly address those newer markets.

Nokia has a history of success in lower-cost feature phone markets, but until recently their smartphone lineup was exclusively high-end.

"These are not iPhone-killers," notes Morgan. "They're simpler, lower-end devices, not bleeding-edge top-of-the-line technologies, but they can still deliver satisfying social networking and other basic smartphone experiences."

Apple iPhone shipments also rose slightly, from 8.7 to 8.8 million, partly on the back of strong performance in markets such as Japan and China. The smartphone market as a whole was probably buoyed by improving first quarter holiday season demand from the Asia-Pacific region.

Tuesday, June 29, 2010

138 Million People Watching OTT Video in the U.S.

Technologies such as high definition television (HDTV), digital video recorders (DVR) and the Internet are creating higher quality convenient experiences for U.S. consumers.

As a result, the amount of video Americans consume continues to rise, according to the latest market study by The Nielsen Company. Over the last two years, ownership of HDTVs, DVRs and smartphones have increased at double- and triple-digit rates.

"Consumers are driven by the convenience and quality that today's technology now enables," said Matt O'Grady, Executive Vice President, Audience Measurement at Nielsen. "New mobile devices and enhanced TV quality allow viewers to engage in more content than ever before."

More than half of U.S. TV households now have HDTV, up 189 percent from the first quarter of 2008, and more than one-third now have DVRs, up 51 percent. High-speed broadband Internet access, now in 63.5 percent of homes, has created a better user experience for watching online videos and nearly a quarter of households have smartphones, enabling consumers to place-shift and watch video wherever they are.

Despite the common perception that viewers of videos on mobile phones are predominantly teens, more than half (55 percent) are adults aged 25-49. While mobile online video viewing is still fairly limited, year over year growth is notable at 51.2 percent.

Television viewers watched 2 more hours of TV per month in the first quarter of 2010 compared to the same period a year prior (158:25 vs. 156:24). They are also continuing to simultaneously use the Internet while watching TV, with the average time spent doing both activities up 9.8 percent to 3 hours and 41 minutes.

As of Q1 2010 the 292 million people in the U.S. with TVs spend on average 158 hours, 25 minutes each month tuning into television. Q1 2010 data shows that 138 million people watching video on the Internet spent on average 3 hours, 10 minutes during the month doing so.

As of 1Q10 the 20.3 million people who watch mobile video in the U.S. spend on average 3 hrs, 37 minutes each month watching video on a mobile phone.

Monday, June 28, 2010

Hybrid Broadcast-Broadband Set-Top Box Upside

Global demand for digital set-top boxes reached  a record high in 2009, with worldwide set top box (STB) unit shipments increasing 11 percent, according the the latest market study by In-Stat. Increased demand for both satellite and terrestrial pay-TV STBs fueled the market growth, with market share fragmented across many vendors.

Even after a record year, the market likely faces numerous challenges. "The set top box market will be solid for the next few years. However, there are some emerging threats that will test the market's long-term viability," says Mike Paxton, an analyst at In-Stat.

According to In-Stat's assessment, the foremost threats are:

- Over-the-top (OTT) video offerings could permit consumers to downgrade or disconnect their current pay-TV service.

- Software platforms that enable consumer electronic (CE) devices to function like, or even replace, a traditional set top box.

- Other consumer electronic devices, such as video game consoles and TV sets, can increasingly replicate the capabilities of a digital set top box.

In-Stat's market study found the following:

- STB unit shipments in 2010 are projected to decrease slightly, returning to 2008 levels.

- Hybrid set top boxes that integrate IP video with an existing broadcast TV platform will ship in significant numbers in 2011, particularly in Europe.

- Sustained demand for advanced set top box products like HD-capable set top boxes and PVR-enabled products, coupled with the continuing analog-to-digital television transition, will keep the set top box market vibrant through at least 2012.

- Satellite set top boxes, the largest market segment, accounted for 48 percent of 2009 global set top box unit shipments.

- Competition in the set top box market is increasing. In 2009, seventeen STB manufacturers shipped over one million units.

Saturday, June 26, 2010

UK Online Advertiser Spending Gains Momentum


eMarketer reports that UK advertising spending suffered a double-digit drop in 2009, according to several sources. However, the Internet defied this downward trend. UK advertisers spent £3.54 billion ($5.56 billion) online in 2009 -- 5.7 percent more than in 2008.

Online spending growth will speed up in 2010 to 7 percent before moderating in 2011. The London Olympics in 2012 will also provide a boost in spending increases.

"On the whole, digital marketers in the UK rose to the challenge of budget restraint with sound strategies and imagination," said Karin von Abrams, eMarketer senior analyst. "Because Internet ad spending continued to grow during the economic downturn, online marketers are also well placed to capitalize on the recovery, whether this is slow and halting, or steady and more rapid."

The Web already claimed a larger share of UK ad revenues than TV in 2009 -- according to MAGNA and ZenithOptimedia, and will consolidate this dominance over the next five years.

Both these sources separate newspapers and magazines when calculating print ad revenues. But. taken together, print ad spending estimates by MAGNA will reach £3.78 billion this year, just under eMarketer's forecast of UK online ad spending.

Several other estimates of UK online ad spending for 2010 are more conservative.

Much of the variation between sources derives from different methodologies, but all firms agree on significant gains to online spending this year.

"The Web has emerged from the recession with impressive momentum," said Ms. von Abrams. "The Internet's reputation for delivering ROI is intact, even enhanced. Digital, in all its forms, is increasingly central to all marketing activities and consumer behavior."

Friday, June 25, 2010

Wi-Fi Home Networks Enable HD Video Distribution

The digital home Local Area Network (LAN) will increasingly become instrumental in enabling HD video distribution within a residence, and in particular emerging over-the-top (OTT) video entertainment services.

Wired Ethernet is still the preferred method to interconnect devices on the network, such as broadband routers and digital media player set-top boxes. However, in larger homes there are times where using Ethernet cables isn't practical. Most consumers attempt to use Wi-Fi routers to provide wireless connectivity.

Using a legacy Wi-Fi router to stream HD video can be problematic, because high-definition video requires greater bandwidth. New high-speed gigabit routers are therefore becoming the preferred wireless home networking standard.

2009 was a premier year for the latest Wi-Fi standard, 802.11n. The current 802.11n devices showed significantly stronger growth than 802.11g, according to the latest market study by In-Stat. 802.11n grew 76 percent year-over-year -- compared with an annual decline of 14 percent for 802.11g.

"The wireless LAN (WLAN) market continued to grow in 2009, despite the decline of the worldwide overall market," says Vahid Dejwakh, In-Stat analyst.

In-Stat's market study found the following:

- Worldwide revenue was up 5.2 percent in 2009 compared with 2008.

- NETGEAR and D-Link took the lead in WLAN shipment market shares, at 23 percent and 18 percent respectively.

- 68.5 million WLAN units shipped in 2009.

- Small Office Home Office (SOHO) router revenues increased to $1.16 billion in 2009.

- North America accounted for 46 percent of all WLAN shipments in Q409.

Thursday, June 24, 2010

Mobile TV Services are Likely to Overcome Barriers

Several factors hindered the widespread global deployment and adoption of mobile cellular and broadcast TV services. According to the latest market study by ABI Research, the market inhibitors are finally being addressed.

Worldwide mobile TV service adoption will accelerate starting in 2012 through 2015, when total market revenues are forecast to exceed $20 billion.

The three most important market barriers have been:

- The lack of free and simulcast local and national TV programs as a primer for fee-based premium content in most countries -- outside of Japan and South Korea.

- Limited analog-to-digital TV transitions in most regions that would allow broadcasters to simulcast mobile and terrestrial TV services. Most developed countries will complete that transition by 2012.

- 3G cellular service throughput and latency performance are inadequate for mobile TV. The deployment of 4G networks over the next few years will enable a significantly improved mobile TV experience.

According to ABI's principal analyst Fritz Jordan, "Mobile network operators have been hampered by their lack of media industry experience, by mobile broadcasting rights, and premium content. Also, there are still few mobile devices containing the chipset required to pick up free-to-air mobile broadcast TV services."

On the bright side, however, once the analog-to-digital TV conversion is complete, the barriers-to-entry for broadcasters will be low -- they will leverage existing content licenses and rights and invest just $100,000 or so per tower to provide mobile TV services.

A further disruptive influence on the direction of the market is the proliferation of new types of mobile devices with larger, high resolution displays and richer multimedia capabilities than cellular handsets.

Says Jordan, "Since mobile TV won't be just the province of cellular operators but also of broadcast TV providers, we will see more TV-centric mobile devices -- automotive infotainment systems, media tablets, MIDs, and netbooks."

Mobile consumers won't be forced to go through a mobile operator and have to pay for voice, messaging, email and Internet plans first, just to get mobile TV.

Wednesday, June 23, 2010

Why Smartphone Apps Competition Will Intensify

News and entertainment smartphone applications (apps) are downloaded the most, but productivity apps apparently generate the most revenues, according to the latest market study by In-Stat.

Productivity applications -- such as mapping, business and enterprise applications and phone tools or utilities -- generate 59 percent of all smartphone application revenue.

According to In-Stat assessment, the competition in the smartphone app market will intensify over the next few years as developer ecosystems become more competitive with the Apple iPhone app store.

There are more than eight common smartphone Operating Systems (OS), and the number is likely to grow rather than shrink. Google will exploit its Internet dominance, and Apple will leverage its development community and stable platform. Microsoft is placing its market recovery bet on Windows Mobile 7.

In-Stat's market study found the following:

- Games and Music & Radio are the top 2 news and entertainment smartphone apps downloaded.

- Although Mobile VoIP was the highest 2010 growth segment of social networking and messaging applications, e-mail apps continue to dominate the category in terms of total downloads.

- The number of Android apps downloaded is growing at the fastest rate; however, Apple applications still dominate both free and paid downloads.

- In-Stat predicts that 2012 witnesses the last of the Palm OS application downloads.

Tuesday, June 22, 2010

TV Widgets Must Enhance the Viewing Experience

A growing set of consumer electronics (CE) devices -- ranging from web-enabled TVs, to Blu-ray players and over-the-top set-top boxes -- now support TV application widgets. Among these TV apps are those that enable users to view YouTube videos, access Netflix subscription services, or obtain weather forecasts directly on the TV using a broadband Internet connection.

The rapid growth of web-enabled CE devices -- which In-Stat projects will to 83.4 million by 2014 -- is the foundation for a vibrant TV Widget Market.

Most CE device manufacturers are introducing software developer platforms that support application widgets. However, In-Stat research indicates only a modest consumer interest in performing PC-centric applications on the TV.

Consumers have higher interest in TV applications that enhance and/or augment the viewing experience, rather than simply provide information that is readily accessible via other screens.

"Consumers want more than simply displaying additional data on the TV screen, such as baseball statistics, consumers want new and unique TV functionality" Keith Nissen, In-Stat analyst.

For example, for live broadcast television applications --such as sporting events -- there is strong interest for TV widgets that let the viewer control the camera angle being displayed on screen.

Other findings from the In-Stat study include:

- By 2013, TV applications have the potential to generate over $1.7 billion in annual revenue.

- Households with adults under 40 years of age have the highest interest in using TV widgets.

- Screen control, news and entertainment information have broad appeal across all age groups.

- TV widgets, such as multi-session games, are highly valued by small user segments. These represent a significant revenue opportunity.

- There is substantial interest in TV widgets that enable local online purchases, such as pizza delivery or movie tickets.

- Viewing YouTube videos on the TV are favored only by households in the 18-24 age group.

Monday, June 21, 2010

Exploring Telco 2.0 Broadband Business Models

Both the fixed and mobile broadband service provider markets will continue to grow in revenues -- up to $416 billion in 2020 -- according to the latest market study published by the Telco 2.0 Initiative at STL Partners.

Their report finds that broadband service providers will benefit from both new types of broadband wholesale and more sophisticated direct-to-consumer retail propositions and service tariffs. They believe that recent introductions of new tiered and capped wireless Internet data plans are early evidence of this trend.

Key findings from the Telco 2.0 report include:

- Global broadband access is forecast to increase from $274 billion in 2010, to $416 billion in 2020, an increase of 52 percent in revenue terms.

- More than half the revenue growth will come from wholesale and two-sided fees for improved access capacity and quality.

- By 2020, mobile broadband will be worth $138 billion, or 32 percent of the total broadband industry revenues.

- Three new revenue streams are identified as: Bulk Wholesale, Comes with data and Slice and Dice.

- New upstream customers are forecast to generate over $90 billion in broadband revenues globally by 2020.

Many operators fear the supposed risks of becoming "dumb pipes," but their study suggests the forecast market value means the term "happy pipe" is more appropriate for some. Certain telecom carriers will be able to add further value through enhanced Telco 2.0 services and platforms.

That said, the basic carriage of IP data can be profitable and a source of substantial service provider growth.

On the conventional retail broadband side, the big winners are fiber-based fixed services and mobile data for smartphones. ADSL and cable revenues will peak in mid-decade, and then decline with substitution from the progressive deployment of fiber.

PC-based mobile broadband retail revenues will grow strongly in the short term, before being impacted by price competition and a shift from user-paid retail subscriptions to new wholesale-enabled models.

According to Chris Barraclough, co-author of the report and Managing Director of Telco 2.0, "it's not about throwing away existing operator business models, but about evolving them to generate additional value. In two-sided business models, there are upstream and downstream customers -- upstream customers are typically enterprises or merchants seeking to reach their markets -- the so-called downstream customers."

Saturday, June 19, 2010

Top 5 Mobile Smartphone Apps in the U.S. Market


U.S. mobile phone service subscribers are finally becoming more sophisticated, like their counterparts in other more advanced mobile markets, using their smartphone applications (apps) at a higher rate.

eMarketer reports that according to the latest comScore study, the total number of mobile app users in the U.S. increased by 28 percent from April 2009 to April 2010.

Several app categories saw usage grow much faster. Social networking apps grew their user base by 240 percent during the period, to more than 14.5 million mobile users. Other categories gaining in user adoption include weather apps -- at more than 18 million and maps at about 16.8 million.

Social networking is the fastest-growing mobile content category, relative to browser access -- with nearly 30 million mobile users visiting the sites through mobile browsers.

"Social networking is by far the fastest-growing mobile activity right now," said Mark Donovan, comScore senior vice president of mobile.

The most-used app across nearly all smartphone operating systems also falls into the social networking category. The top social Website, Facebook, is entrenched as the most widely used app by owners of BlackBerrys, iPhones and other smartphones.

Only users of Google's Android operating system are more likely to use Google Maps than Facebook. See the above chart for examples of the top 5 mobile smartphone apps in the U.S. market, categorized by device operating system.

Other top apps across operating systems included offerings in the fast-growing and highly popular weather and maps categories.

Friday, June 18, 2010

HD Video Driving Transition to SuperSpeed USB

The potential to eliminate slower interface connections -- to save space and allow smaller consumer electronics device designs -- is driving integration of SuperSpeed USB (3.0) into netbooks and other mobile PCs, according to the latest market study by In-Stat.

Today, 97 percent of the mobile PC market uses high-speed USB (2.0), however by 2014 In-Stat expects the market to transition completely to SuperSpeed USB.

"In the past, new interface technologies were adopted more quickly in desktops," says Brian O'Rourke, In-Stat analyst.

However, the landscape is shifting. Mobile PCs are omitting optical and large hard disk drives, which increases the need for faster interfaces to connect to external storage solutions. This makes SuperSpeed USB a higher priority in mobile PCs.

I believe that the accelerated adoption of HD video formats, that produce significantly larger files than SD formats, will create new momentum to quickly utilize faster device connectivity standards.

In-Stat's market study found the following:

- High-speed USB is expected to peak in 2011 at 2.9 billion units then decrease slowly over the remainder of the forecast as SuperSpeed gains traction.

- USB penetration of the LCD monitor market will see a compound annual growth rate (CAGR) of 107.5 percent from 2009 to 2014.

- 225 million SuperSpeed USB flash drives will ship in 2014.

- SuperSpeed will sweep through the USB-enabled hard drive market by 2013.

- From 2009 to 2014, the average selling price of SuperSpeed USB discrete peripheral controllers will experience a -21.8 percent CAGR.

Thursday, June 17, 2010

Mixed Outlook for the U.S. Mobile Broadband Market

The market for mobile broadband connectivity for portable devices has previously been slow to gain momentum in North America. Only in the past 18 months has the U.S. market participants taken significant steps toward fostering broader adoption -- beyond the early-adopter mobile business user.

According to a new International Data Corporation (IDC) forecast, the U.S. mobile broadband market will potentially grow from 6.5 million subscribers in 2009 to 30.2 million in 2014 -- which accounts for a compound annual growth rate (CAGR) of 36.1 percent over the forecast period.

The introduction of subsidized netbook and tablet PCs, changes to pricing structures, and the early availability of 4G with WiMAX will begin to spur interest among the consumer segment about the power of mobile broadband as a secondary access method beyond wired broadband.

IDC believes that although the possibility of mobile broadband becoming a primary access technology remains somewhat a figment of our imagination, it's not beyond the realm of possibility in the longer term.

"Mobile broadband is growing in importance for both consumers adopting the service and the operators offering connectivity," says Carrie MacGillivray, program manager, Mobility Services at IDC.

Diversity in pricing plans, new computing devices capable of mobile broadband connections, and the promise of a 4G world with faster speeds are a tempting proposition for customers looking to be ubiquitously connected regardless of location, anytime.

The evolving landscape of new wireless connected devices -- such as Apple's iPad and Amazon's Kindle -- will also have a positive impact on this market. As devices such as tablets, which are rich in digital media experiences, become more broadly available and consumed, the appetite for instantaneous connectivity will drive growth around mobile broadband.

It was hoped that that 2010 would be the year where growing interest and adoption of these services gained new momentum. However, the recent wireless broadband monthly service bandwidth cap trend unfortunately will create market uncertainty -- as some subscribers hesitate to use their smartphones to access the Internet.

Wednesday, June 16, 2010

Most 4G Wireless Networks Arrive in 2012 to 2014

Yet another market study has uncovered delays in the planned migration to forth-generation wireless networks. Infonetics Research recently published their 4G Strategies: Global Service Provider Survey.

Senior Infonetics analysts asked operators about their 4G network build-out plans, deployment strategies, challenges, technical and commercial drivers -- plus, the 4G services, applications, and devices they plan to offer.

"Better spectral efficiency tops the list of technical drivers for service providers upgrading to 4G," notes Richard Webb, directing analyst for WiMAX, microwave, and mobile devices at Infonetics.

"We asked service providers around the world when they anticipate their 4G networks will be complete with commercial services running. Two-thirds said 2012 to 2014, which is a realistic timeframe when an equipment and device ecosystem based upon an IMT-Advanced definition of 4G seems likely," adds Stéphane Téral, Infonetics Research's principal analyst for mobile and FMC infrastructure.

Infonetics surveyed knowledgeable purchase decision-makers at wireless service providers in Europe, the Middle East, and Africa (52 percent), North America (24 percent), Asia Pacific (24 percent), and Central and Latin America (5 percent) that operate a wireless network and have plans to deploy 4G.

Infonetics 4G Survey Summary Results Follow:

- 82 percent of service provider respondents plan to follow the W-CDMA to LTE deployment scenario, and of those, 53 percent plan to deploy HSPA+ before LTE.

- Half of the service providers believe 4G downlink speed will be between 25Mbps and 50Mbps at service launch, while 42 percent believe downlink speeds will be in excess of 50Mbps, suggesting that operators are getting more ambitious.

- 82 percent of service providers say they plan to launch mobile VPN services, showing the growing importance of the mobile enterprise business.

- Service providers appear to have sorted out their voice migration strategy (which was unclear in a similar Infonetics survey conducted last year), with IMS identified as the key architecture.

- Over half of the service providers surveyed plan to offer voice services over 4G one year after commercial launch.

Tuesday, June 15, 2010

4G Wireless Service Deployments Still Troubled

Will the evolution to forth-generation wireless services follow the path of its predecessor, troubled by the lack of a cohesive industry effort to reach mainstream adoption? Apparently, the path to full 4G deployment could be more troublesome than prior 3G technologies.

To date, 4G wireless technologies are challenged by a multiple of wireless standards, limited availability of spectrum, constricting business models, as well as a host of other market and industry issues. That said, it could still reach a successful outcome, in spite of all the missteps.

According to the latest market study by In-Stat, the new generation of data-centric mobile devices -- such as smartphones, netbooks, and tablets -- are already straining current 3G networks. Regardless, even with these market and technical hurdles, baseband modem integration into mobile devices will reach 2 billion by 2014.

In-Stat's assessment includes the following:

- The transition to 4G communication standards has begun, somewhat slowly, with 3.6 percent of mobile devices with baseband connectivity expected to be using 4G standards in 2014.

- Despite the early lead of WiMAX, LTE is expected to account for over 60 percent of 4G-enabled mobile devices in 2014.

- Integration of baseband solutions is expected to increase, resulting in an 11.0 percent CAGR (Compound Annual Growth Rate) of broadband-enabled mobile devices.

- Smartphones and computing devices are the only devices expected to transition to 4G technologies over the next five years. Handsets and mobile CE devices will remain on 2G/3G networks because of lower performance, cost, and power requirements.

Monday, June 14, 2010

Silicon Upside for Next-Generation Ultra-Slim TVs

During the past thirty years, television channel tuners have moved beyond TV sets, and found their way into Cable TV set-top boxes and Cable Modems, PC-TV tuners, and Digital Terrestrial TV (DTT) set-top boxes. Many satellite and telco pay-TV set-top boxes also include broadcast TV tuners.

Although traditional can-type TV tuners are still the mainstream approach being used for high-volume television sets, the next-generation of ultra-slim TVs will need compact Silicon Tuners to enable thinner circuit boards, according to the latest market study by In-Stat.

Smaller-screen TVs that need to add digital reception capabilities will also benefit from smaller, less power-hungry Silicon Tuners.

"During this decade, the global market for TV Tuners will make an epochal transition from traditional can-type TV Tuners to all solid state Silicon Tuners" says Gerry Kaufhold, In-Stat analyst.

The silicon tuner contenders have already displaced the can tuners in most Satellite TV and Cable TV set-top boxes, and in Personal Video Recorder (PVR) end-products.

In-Stat's market study findings include:

- The worldwide silicon tuner market will top $500 Million by 2014.

- Western European Shipments of silicon tuners in TV sets will exceed 16 million units in 2014.

- Asia Pacific shipments of silicon TV tuners in set-top boxes will more than triple between 2010 and 2014.

- Silicon Tuners create pull-through for Systems-on Chips (SoCs) that include demodulators, video decoders and graphics capabilities.

- Can-type Tuners will gradually lose market share to Silicon Tuners through 2014.

Saturday, June 12, 2010

Netflix Factor: Evolution of U.S. Online Video Users


U.S. online video viewership has risen steadily and is expected to grow through 2014. eMarketer estimates that growth will slow from between 8 and 9 percent a year from 2010 through 2012 to about 5.2 percent in 2014 -- when 77 percent of all U.S. Internet users will be routinely watching online video content.

Growth in online video viewership was increasing more quickly between 2008 and 2009, by 11.3 percent. At the same time, streaming and downloading of full-length movies increased much more dramatically. According to Ipsos OTX, the percentage of Web users who watched long-form online video more than doubled between September 2008 and October 2009.

Such rapid increases in downloading and streaming mean full-length movie -- and, by likely extension, TV -- content is on a faster growth track than online video viewing as a whole. One factor behind the turn toward long-form content is the success of Hulu -- which The Nielsen Company ranked second to YouTube in overall video streams viewed in April 2010.

In addition, the increase in Internet-enabled TV sets and other over-the-top video viewing devices supports the trend. In-Stat expects U.S. shipments of Web-enabled devices that support TV applications to increase from 14.6 million this year to 83.4 million by 2014.

The demographics of online video viewing also help to explain why Internet users have gone beyond short-form clips to adopt full-length TV and movie viewing on the Web. eMarketer estimates the highest penetration of online video viewing is among 18- to 24-year-old consumer -- with 25- to 34-year-olds and teens not far behind. By the middle of this decade, those age groups will be at saturation points of above 90 percent penetration.

Retrevo found that 29 percent of under-25 year-old consumers get all or most of their TV online, compared with 8 percent of the video viewing population as a whole. They're used to consuming TV content online, and they'll be helped by a new generation of devices that makes this transition much easier than it's been to date.

"If the first iteration of online video was about pet tricks on YouTube, the next wave will be about professionally produced full-length content such as TV shows, movies and live sports," said Paul Verna, eMarketer senior analyst. "This shift will be propelled by a combination of technology integration, demographics and a growing comfort level with the idea of watching video hosted on Websites."

I believe the current online video adoption (via ad-supported sites) trend leads to a predictable shift in consumer video entertainment consumption. That's why the "Netflix factor" is so intriguing to media industry analysts -- because YouTube and Hulu are perhaps the best training ground for future over-the-top video subscription prospects to discover the alternative low-cost pay-TV offerings.

Friday, June 11, 2010

Growing Application Downloads on Mobile Phones

comScore reported key trends within the U.S. mobile phone services market during the three months ending April 2010 -- compared to the preceding three-month period.

During that period, 234 million Americans age 13 and older were mobile subscribers, with device manufacturer Samsung ranking as the top OEM at a 22.1 percent share of U.S. mobile subscribers -- up one point from the prior three month period. LG ranked second with 21.8 percent share, followed by Motorola (21.6 percent share, down 1.3 percentage points), RIM (8.4 percent share) and Nokia (8.1 percent share).

In a ranking of the top mobile operators in the U.S., Verizon led the market with 31.1 percent of mobile subscribers. AT&T ranked second with 25.2 percent market share -- up 0.2 percentage points from the period ending January 2010. Sprint narrowly grabbed the number three position with 12.0 percent market share, closely trailed by T-Mobile (12.0 percent), while Tracfone gained 0.3 points to capture 5.1 percent of the market.

In an average month during the February through April 2010 time period, 64.6 percent of U.S. mobile subscribers used text messaging (SMS) on their mobile device -- up 1.1 percentage points versus the prior three month period, while browsers were used by 31.1 percent of U.S. mobile subscribers -- up 2.5 percentage points.

Subscribers who used downloaded applications comprised 29.8 percent of the mobile audience, representing a substantial increase of 3.1 percentage points over the prior three month period.

Accessing of social networking sites and blogs also continued to grow, increasing 2.8 percentage points to 19.9 percent of mobile subscribers.

Thursday, June 10, 2010

Mobile Social Networking Application Users Triple

comScore recently performed a U.S. market study of the fastest-growing mobile application (apps) and browser content categories. Social networking led as the top-gaining category for both application and browser access. The study also found that accessing bank accounts was one of the fastest-gaining categories.

"With mobile media consumption on the rise, the discussion of how consumers are accessing content -- whether it is via application, browser or both -- continues to be an important factor for companies looking to invest further in their mobile brands," said Mark Donovan, comScore senior vice president of mobile.

Regarding market penetration, 78 percent of smartphone users accessed their browser in April 2010, while 80 percent accessed applications. In comparison, just 19 percent of feature phone users accessed their browser, with 17 percent accessing applications.

Although smartphone users are driving growth in browser (up 111 percent in the past year) and application (up 112 percent) access, feature phone users still make up nearly half of all users accessing mobile browsers and apps.

In April 2010, 69.6 million mobile users accessed an application on their phone, an increase of 28 percent from the previous year. Several application categories experienced triple-digit growth in the past year, emphasizing the increasing popularity of this method as a form of mobile content access.

Social Networking experienced the strongest growth in app access, increasing 240 percent to 14.5 million users. Accessing News apps followed, growing 124 percent to 9.3 million users, while Sports Information apps experienced a 113-percent surge to nearly 7.7 million users. Bank Accounts apps also more than doubled their audience, growing to nearly 5 million users in April.

Nearly 73 million mobile users accessed their browser in April, an increase of 31 percent from the previous year. Social Networking ranked as the fastest-growing category accessed via browser, growing 90 percent from the previous year to reach almost 30 million users, followed by Bank Accounts (69 percent to 13.2 million users).

Online Retail sites also experienced a significant increase in audience usage via browser, increasing 47 percent to 7.3 million users, as Americans continued to show adoption of the mobile retail channel.

That said, social networking is by far the fastest-growing mobile activity right now. With 20 percent of mobile service subscribers now accessing social networking sites via their mobile phone.

Wednesday, June 09, 2010

Global Pay-TV Market to Top $250 Billion in 2014

Infonetics Research released the first edition of its 2010 biannual Pay-TV Video Services and Subscribers report -- which tracks telco IPTV, cable video, and satellite video services and subscribers.

"Increased competition among video service operators will help keep monthly subscription fees in check, which will offset some of the growth expected from incremental revenue via video on demand (VoD), digital video recording (DVR), and start-over services," notes Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research.

According to Infonetics, the biggest single threat to traditional pay-TV revenue growth is the continued rise of online Over-the-Top (OTT) video viewing, where consumers can downgrade or eliminate their monthly TV subscription in favor of streamed content delivered over the Internet via ad-supported sites like Hulu and YouTube -- and by online-only pay-TV service platforms, such as Netflix and Amazon.

Infonetics Video Services Market Study Highlights Include:

- Worldwide pay-TV revenue derived by service providers and cable companies for IPTV, cable video, and satellite video services is forecast to top $250 billion in 2014.

- Average revenue per user (ARPU) for telco IPTV services in most regions remains lower than ARPU for cable and satellite services.

- Still, telco IPTV service revenue is forecast to grow over the next five years -- good news for service providers trying to stem the growing loss of revenue from decreasing fixed access lines.

- Operators such as AT&T, Verizon, Belgacom, Deutsche Telekom, Orange, Iliad, and China Telecom are adding video subscribers, selling them on a combination of exclusive content, higher picture quality, and low introductory subscription fees.

- In North America, the top two providers of pay-TV video services -- in terms of annual revenue -- are Comcast and DirecTV.

- In EMEA, Sky is the revenue share leader by far, with its presence in the UK, Ireland, Germany, Italy, and Austria.

Tuesday, June 08, 2010

178 Million U.S. Consumers Watching Online Video

comScore released April 2010 data showing that 178 million U.S. Internet users watched online video during the month. Recently launched in December 2009, Vevo (which includes viewing from the Vevo channel on YouTube) attracted 43.6 million viewers in April, representing a quarter of the U.S. online video audience.

U.S. Internet users watched 30.3 billion videos in April, with Google Sites ranking as the top video property with 13.1 billion videos, representing 43.2 percent of all videos viewed online. YouTube accounted for the vast majority of videos viewed at the property.

Hulu ranked second with 958 million videos, or 3.2 percent of all online videos viewed. Microsoft Sites ranked third with 644 million (2.1 percent), followed by Viacom Digital with 384 million (1.3 percent) and Yahoo! Sites with 371 million (1.2 percent).

Nearly 178 million viewers watched an average of 171 videos per viewer during the month of April. Google Sites attracted 136.3 million unique viewers during the month (96.0 videos per viewer), followed by Yahoo! Sites with 49.5 million viewers (7.5 videos per viewer), and Fox Interactive Media with 43.8 million viewers (7.3 videos per viewer). Vevo jumped 4 positions in the April ranking taking the #4 spot with 43.6 million viewers, an average of 7.6 videos per viewer.

In April, Tremor Media ranked as the top video ad network with a potential reach of 92.6 million viewers, or 52.1 percent of the total video viewing audience. ScanScout Network ranked second with a potential reach of 80.7 million viewers (45.4 percent penetration) followed by Advertising.com Video Network with 78.4 million viewers (44.1 percent).

Other notable comScore findings from April 2010 include:

- The top video ad networks in terms of their actual reach delivered were: Joost Video Network (by Adconion Media Group) with 36.6 percent penetration of online video viewers, BrightRoll Video Network with 19.5 percent, and BBE with 18.5 percent.

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

- 135.7 million viewers watched 13.0 billion videos on YouTube.com (96.0 videos per viewer).

- The average Hulu viewer watched 24.7 videos, totaling 2.5 hours of video per viewer.

- The duration of the average online video was 4.4 minutes.

Monday, June 07, 2010

Smart Pipes and Broadband Value-Added Services

More service providers are evolving their business model to include "Smart Pipe" offerings. The market for consumer Broadband Value-Added Services (BVAS) grew by 30 percent during 2009 based on revenue gains and by 13 percent in subscribers, according to the latest market study by Point Topic.

The run rate for consumer BVAS revenues went from $39.6 billion to $48.9 billion during 2009. This was a greater rate of increase than that for consumer broadband lines which grew 14 percent -- from 366 million to 417 million from Q408 to Q409.

For comparison plain broadband access subscription revenues increased from a run rate of $113 billion at the end of 2008 to $129 billion at the end of 2009. In that context, BVAS revenues contributed an extra 37.9 percent to standard access revenues by the end of 2009.

"Value added services, like VOIP, security and IPTV grew more quickly than the number of broadband lines in 2009. The operators and ISPs are starting to increase the proportion of their revenues that they generate selling add-on services for broadband and they are doing it successfully at least in revenue terms," says John Bosnell, Senior Analyst at Point Topic.

In terms of value, the leading services were IP Telephony, home security, online gaming, IPTV and online music. IP Telephony overtook security as the service earning the most revenue during 2006.

Telephony, frequently part of a triple or quad play bundle alongside broadband and TV, generates the most revenue. PSTN replacement services such as those provided by France Telecom or Vonage generate reliable subscription revenues, along the lines of the PSTN billing model.

Internet Telephony services -- such as Skype -- rely on individual payments to make or receive calls from the Internet cloud to the PSTN. The revenue generated is much smaller than for IP Telephony services. Skype is a disruptive technology and growing fast, and it is starting to account for a significant proportion of international minutes.

Services, like PC security, achieve high revenues because they have relatively high penetration. Even if a service has a low unit price and offers a low profit margin to the supplier it can be a success if it manages to appeal to enough service subscribers.

Margins for basic broadband access are reducing all the time. That, along with pressure from competitors, is driving operators to market enhanced service bundles. BVAS offerings help operators retain customers, cross-sell new benefits and thereby increase revenues or profit margins.

All broadband service providers can promote substantive market differentiation with Smart Pipe strategies -- if they so choose. They can attain a position further up the Internet offering value-chain by pursuing internal product development or in association with independent application developer partners.

Saturday, June 05, 2010

Technology, Media and Telecom Marketing Evolves


Technology, media and telecommunications marketing practitioners are ready to let go of legacy practices and try something that's potentially more effective. eMarketer reports that social media is now developing a reputation for being valuable -- for customer interaction, brand awareness and lead generation.

In February 2010, for example, inbound online marketing platform HubSpot found Twitter usage could double monthly leads, and Onesource reported in January that business-to-business salespeople were looking to LinkedIn for prospecting.

Moreover, according to virtual events provider Unisfair, social media is now the top emerging channel for sales lead generation among technology marketers that they surveyed in May 2010.

Lead generation was marketer's first priority, with 66 percent saying it was their greatest concern for 2010, compared with just 17 percent who chose brand awareness.

When online marketing firm R2integrated surveyed U.S. marketing professionals in April 2010 about why they had a social media strategy, the number one response was to increase sales lead generation.

That said, unqualified leads are still a major problem, with one-third of Unisfair respondents saying they normally rejected 16 to 30 percent of their leads as unqualified.

The most important types of information for determining whether a lead is valuable include interest and demographic information -- which might make social media an even more useful prospecting channel, since profiles can include exactly the type of data salespeople are looking for.

In addition, the industry analysts believe that social media can provide a venue for nurturing leads that are not yet ready to buy. However, I believe that more emphasis on customer-centric content development -- such as buying-cycle information and guidance tools -- is the real key to improved market development results.

Friday, June 04, 2010

Mobile Broadband Growth Throughout the Americas

The 3GPP mobile broadband technology (UMTS-HSPA) realized growth of 81 percent throughout the Americas in the year ending March 2010, according to the latest market study by 3G Americas.

Propelled by an increase in 3G wireless network deployments, upgrades to HSPA networks, mobile broadband subscriptions, netbooks and smartphones, mobile phone service providers are reporting significant growth in revenue from data related services.

"Mobile broadband is growing at an explosive rate throughout the Western Hemisphere as the investment by operators in networks and devices is delivering advanced services to customers," said Chris Pearson, President of 3G Americas. "This is evidenced by the strong growth of mobile broadband subscriptions in North, Central and South America."

Total 3GPP subscriptions (GSM-HSPA) in the Western Hemisphere reached 621.7 million as of March 2010 -- and captured 74 percent share of market. In the first quarter alone, there were 22.1 million new subscriptions reported in the Western Hemisphere.

The Latin America and Caribbean region continued to see a dramatic increase in market share for 3GPP technologies, rising to 92 percent at the end of the first quarter of 2010. This was supported by the addition of 20 million new 3GPP technology connections, of which 5 million were UMTS-HSPA connections.

In the U.S. and Canada, 3GPP technologies added a net 2 million new subscribers in the first quarter of 2010 and included in this number were 5 million new mobile broadband (UMTS-HSPA) connections.

According to industry analyst Chetan Sharma, in the U.S., where all four national wireless service providers are within the top 10 global mobile data operators, average industry percentage contribution of data to overall ARPU crossed the 30 percent mark in 1Q 2010 and is likely to get past 35 percent by the end of the year.

At the first quarter of this year, there were 4.3 billion 3GPP connections worldwide, with 3GPP mobile broadband subscriptions nearing the half billion point at 493 million UMTS-HSPA connections, a number that continues to grow and represented 11.4 percent of all subscriptions.

Thursday, June 03, 2010

U.S. Mobile Smartphone Advertising Advances Slowly

Will consumer advertising on mobile handsets, such as smartphones, finally gain momentum in the U.S. market as it has in others around the world? At this point in time, it's apparently a definite maybe.

According to the latest market study by ABI Research, 27 percent of U.S. mobile phone users accessing the mobile Internet have clicked on a mobile banner advert or text link. That compares to 21 percent in their previous survey.

Neil Strother, ABI Research's practice director for mobile marketing strategies, said "More people are accessing websites through their mobile phones today than 14 months ago, and clicking on ads is becoming more commonplace."

This trend is a positive one for marketers and advertisers, and should give them greater confidence in their mobile efforts, knowing that well-targeted offerings can find traction among consumers.

The key to success, Strother says, is to purchase inventory on mobile websites that have the desired audience profile and then present creative elements that meet the needs and have relevance for those mobile consumers.

Other highlights from the ABI study include:

- Mobile Internet access on a daily basis is up significantly, with 28 percent of mobile phone users accessing Internet sites at least once a day from their phones. That compares to just 16 percent in the previous survey conducted at the end of 2008.

- Resistance to receiving promotions such as coupons and discounts on the mobile phone is eroding: About 45 percent of respondents, while not enthusiastic, would accept promotions if they had some control over the process.

- By contrast, only about 36 percent would accept these types of mobile promotions in the earlier survey.

- Consumers remain guarded about using their mobile phones to make purchases, with 76 percent saying that security around such transactions is a major concern, an increase from 71 percent in the previous survey.

Wednesday, June 02, 2010

Segmenting the Demand for Mobile e-Reader Devices

According to the latest market study by Informa Telecoms & Media, e-reader sales are expected to peak at 14 million units in 2013, before falling by 7 percent in 2014 as the device category faces increased competition from other consumer electronics (CE) devices.

This decline will be driven by a shift away from dedicated e-readers, such as the Amazon Kindle, towards other multifunction device types -- notably mobile smartphones and tablet form-factor computing devices.

Informa believes that this transition may lead to a segmentation of the e-reader market into two distinct groups -- low price, low feature models and higher price devices with more advanced features.

The current e-reader offers a good reading experience, high levels of portability and extended battery life. However, it is under threat from the availability of electronic book (e-book) content on multifunctional devices such as mobile phones, tablet computers, netbooks and other portable CE devices.

"Mobile broadband e-readers will also face competition from much cheaper non-connected models that are targeting a lower retail price in order to stimulate adoption," said Gavin Byrne, senior analyst at Informa Telecoms & Media.

In order to better fit the application needs of customers, there are a number of design alternatives for device vendors. They can develop low-cost e-readers with minimal features that can be used in conjunction with a PC or USB dongle to access additional content. For example, e-readers like the Kobo may appeal to the cost-conscious reader -- 100 classic book titles are included on the device.

Alternatively, verdors can improve feature sets in mid and high-end e-readers to transform them, over time, into tablet-like computing devices. These will in effect become more like smartbooks than e-readers.

Early steps in this direction include Barnes & Noble's latest software update for the Nook which adds games and a more open web browsing functionality.

Many e-reader companies are already looking to develop an electronic reading platform -- initially based on their e-reader devices, but that will extend across e-readers, mobile phones, netbooks, notebooks and desktop PCs.

"There are certainly a number of things that vendors can do to counteract this growing threat. However, the current absence of an obvious subsidy model for mobile network operators, the launch of the iPad and market dynamics are likely to limit the size of the e-reader market in the long-term," concludes Byrne.

Tuesday, June 01, 2010

Apps Drive Growing Worldwide Media Tablet Market

The nascent market for media tablets, fostered by Apple's iPad, will be driven by the device attributes as a content presentation and consumption tool. Moreover, the market momentum will be continued by compelling new applications and services that will be created to take advantage of these platforms.

According to a new market study by IDC, worldwide media tablet shipments will grow from 7.6 million units in 2010 to more than 46 million units in 2014 -- representing a compound annual growth rate (CAGR) of 57.4 percent.

In comparison, IDC expects 398 million portable PCs (notebooks and netbooks) will be shipped in 2014.

"These are early days for media tablets, an altogether new device category that takes its place between smartphones and portable PCs. IDC expects consumer demand for media tablets to be strongly driven by the number and variety of compatible third-party apps for content and services," said Susan Kevorkian, program director at IDC.

The availability of apps unique to media tablets and that differentiate the experience of using one compared with a PC or smartphone will be crucial for driving consumer demand.

As the category matures and more media tablet-optimized apps become available, IDC expects that media tablets will evolve beyond nice-to-have devices and become necessities for many consumers.

IDC defines media tablets as tablet form factor devices with 7-12in. color displays. They are currently based on ARM processors and run lightweight operating systems such as Apple's iPhone OS and Google's Android OS.

This distinguishes them from tablet PCs, which are based on x86 processors and run full PC operating systems. Media tablets do not include built-in hardware keyboards but use a stylus/pen or finger for navigation and data input. They provide a broad range of applications and connectivity, differentiating them from primarily single-function lower-cost devices such as the Amazon Kindle eReader.

Although media tablets will primarily be marketed as multifunction entertainment devices, productivity applications will eventually be available to support consumer and enterprise users.