Technology | Media | Telecommunications

Wednesday, November 30, 2011

Video Ads Reach 53 Percent of Total U.S. Population

If there's a limit to the upside growth potential of online video consumption, then apparently it's still nowhere in sight. comScore released data showing that 184 million U.S. Internet users watched online video content in October for an average of 21.1 hours per viewer. The total U.S. Internet audience viewed 42.6 billion videos, representing an all-time high.

Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in October with 161 million unique viewers and reached a record high of 20.9 billion videos viewed. Facebook.com ranked second with 59.8 million viewers, followed by VEVO with 57 million, Microsoft Sites with 49.1 million and Viacom Digital with 48.2 million.

More than 42 billion videos were viewed during the month, with the average viewer watching a record 21.1 hours.

Google Sites demonstrated the highest engagement with 7.1 hours per viewer. Americans viewed 7.5 billion video ads in October, with Hulu generating the highest number of video ad impressions at more than 1.3 billion.

Tremor Video ranked second overall (and highest among video ad exchanges/networks) crossing the 1 billion mark for the first time. BrightRoll Video Network ranked third with 756 million, followed by Specific Media with 512 million and CBS Interactive with 415 million.

Time spent watching video ads totaled more than 3.2 billion minutes during the month, with Tremor Video delivering the highest duration of video ads at 614 million minutes. Video ads reached 53 percent of the total U.S. population an average of 47 times during the month. Hulu delivered the highest frequency of video ads to its viewers with an average of 46.5.

The October 2011 YouTube partner data revealed that video music channels VEVO (54.2 million viewers) and Warner Music (30.4 million viewers) maintained the top two positions. Gaming channel Machinima ranked third with 17.7 million viewers, followed by Schmooru with 9.9 million, Maker Studios with 9.4 million and Demand Media with 7.4 million.

Within the top 10 partners, Machinima demonstrated the highest engagement with 65.1 minutes per viewer on average, while accounting for the second highest number of videos viewed (277 million) after VEVO.

Other findings from the October 2011 study include:
  • 86.2 percent of the U.S. Internet audience viewed online video.
  • The duration of the average online content video was 5.5 minutes, while the average online video ad was 0.4 minutes.
  • Video ads accounted for 14.9 percent of all videos viewed and 1.4 percent of all minutes spent viewing video online.

Tuesday, November 29, 2011

How Online Research Influenced Holiday Shoppers

comScore reported U.S. retail e-commerce spending for the first 25 days of the November through December 2011 holiday season. To-date, $12.7 billion has been spent online, marking a 15 percent increase versus the corresponding days last year.

Black Friday (November 25) saw $816 million in online sales, making it the heaviest online spending day to date in 2011 and representing a 26 percent increase versus Black Friday 2010. Thanksgiving Day (November 24), while traditionally a lighter day for online holiday spending, achieved a strong 18 percent increase to $479 million.

"Despite some analysts' predictions that the flurry of brick-and-mortar retailers opening their doors early for Black Friday would pull dollars from online retail, we still saw a banner day for e-commerce with more than $800 million in spending," said comScore chairman, Gian Fulgoni.

With brick-and-mortar retail also reporting strong gains on Black Friday, it's clear that the heavy promotional activity had a positive impact on both channels. Attention then turned to Cyber Monday, a day that Shop.org says will see eight-in-ten retailers running special online promotions.

Last year, Cyber Monday was the heaviest day of online spending ever, with sales exceeding $1 Billion, and we fully expect to see another record set this year. As the online channel increasingly influences offline shopping behavior, consumers turned to Black Friday sites on the web to conduct research in advance of the day's events.

comScore analyzed several Black Friday deal sites for the five days ending Black Friday (Nov. 21-25, 2011) compared to the corresponding days last year, finding that bfads.net led the pack with 3.9 million unique visitors, up 51 percent versus last year. TheBlackFriday.com followed with 3.2 million visitors while also posting the strongest year-over-year growth at 137 percent.

Fifty million Americans visited online retail sites on Black Friday, representing an increase of 35 percent versus year ago. Each of the top five retail sites achieved double-digit gains in visitors vs. last year, led by Amazon. Walmart ranked second, followed by Best Buy, Target and Apple.

"Each of the top online retailers generated significantly greater Black Friday activity compared to last year," added Mr. Fulgoni. "Amazon.com once again led the pack, with 50 percent more visitors than any other retailer, while also showing the highest growth rate versus last year. However, it is telling that the top multi-channel retailers also showed strong growth in visitors, demonstrating the importance of the online channel to the retail industry as a whole."

Monday, November 28, 2011

Emerging Niche Market for Mobile Apps Development

Mobile device apps adoption has created many new business opportunities for software developers with unique domain expertise. A case in point is the sports and health related mobile application market. Together they will grow to over $400 million in 2016 -- up from just $120 million in 2010.

Much of that growth will be spurred by the ability of mobile handsets to easily connect to wearable devices that in turn can deliver new functionality, accuracy, and appeal to sports and fitness applications.

As the mobile handset adds new ways to access and support healthcare applications, it will become increasingly important within the healthcare market -- including home monitoring systems for aging users, personal emergency response services, and remote healthcare monitoring applications.

However, sports and fitness will dominate the mobile health application market.

"Downloadable apps are moving the sports tracking device market from proprietary devices to mobile phones, but adoption has been limited by the data they can collect. However, with the connectivity that Bluetooth Smart will embed in mobile handsets, wearable devices will bring greater detail to mobile handsets," says Jonathan Collins, principal analyst at ABI Research.

Handset connectivity to wearable devices brings a new dynamic to the sports monitoring market. Athletic equipment players have already moved to support handset applications by either using proprietary or battery-draining traditional Bluetooth wireless.

Meanwhile, traditional players such as Garmin, who recently launched its first handset application for this market, and Polar have delivered high-end specialist systems.

Over the next five years, these players will increasingly have to compete directly with the mobile handset. They will also face a combination of start-ups and new entrants offering applications, online communities, and wearable devices offering a range of creative apps and services.

"As applications increasingly become part of a bundle that ships with wearable devices, revenues from mobile applications will lag behind the growth in app downloads. Mobile application downloads will actually grow at nearly twice the rate of revenues between 2010 and 2016, with more than a billion downloads annually by 2016," says Collins.

Saturday, November 26, 2011

Media Tablet Usage has Increased by 158.6 Percent


Media tablets are the latest consumer electronics device to gain adoption at home and then slowly infiltrate the enterprise IT environment. I first noticed the growing use of tablets by numerous early-adopters at the SXSWi event back in March of this year.

While media tablet devices have only been available for a couple of years, the Apple iPad early-adopters have applied their personal experience and brand evangelism to help drive the rapid increases in ownership and usage.

eMarketer estimates that by the end of 2011, 33.7 million Americans will use a tablet device at least monthly -- that's a rise of 158.6 percent over last year, the year the iPad was released.

Growth will slow to double digits beginning in 2012, but the number of users will rise to nearly 90 million, or 35.6 percent of all internet users, by 2014.

eMarketer's previous media tablet forecasts have focused on unit sales and the total installed base of devices. Current estimates now highlight expanded usage applications, and the device sharing phenomenon. However, they believe that as media tablet adoption continues, less growth will come from sharing and more from replacing older models with new ones.

Eventually, tablets may become more like smartphones -- which typically have a single user, are personalized by individual application interests and needs, and are less likely to be shared.

The iPad, which has clearly led the tablet market since 2010, will continue to do so throughout the forecast period -- although its share will be slowly reduced by competitors, according to the latest eMarketer assessment.

The number of U.S. iPad users will more than double between this year and 2014, from 28 million to 60.8 million. By 2014 iPad users will still account for 68 percent of the overall U.S. tablet audience. That being said, the media tablet addressable market is evolving.

Women currently account for slightly less than half of tablet users, but the gender disparity will continue to shrink. Furthermore, eMarketer estimates that this year, 31.5 percent of tablet users are ages 18 to 34, while 55.5 percent are 35 or older. By 2014, 18- to 34-year-olds will account for 34.8 percent of tablet users, while those ages 35 and up will comprise 49.3 percent of the total.

Usage of media tablets will also increase faster among whites than those of other races and ethnicities, growing from 60.6 percent of total users this year to 65.8 percent by 2014.

Friday, November 25, 2011

China Exceeds 100 Million 3G Mobile Subscriptions

Global mobile network service provider subscriptions will reach over six billion by the end of this year. The Asia-Pacific region will account for more than half of the worldwide total in 2011, according to the latest market study by ABI Research.

Asia-Pacific added nearly one billion connections from two years ago. That growth is being fueled by rapid economic development in the region -- where increased rollout of mobile network infrastructure, citizen prosperity, and affordability of mobile handsets have increased adoption.

That said, less than 18 percent of the three billion connections in Asia-Pacific are 3G and 4G enabled, but that is expected to change quickly as more subscribers create new demand for data services.

"Mobile broadband connections will experience rapid growth over the next two years, driven by 3G network rollouts in India and China and 4G deployments in Japan and South Korea,” says Dan Shey, practice director at ABI Research.

China successfully surpassed 100 million 3G subscriptions in September 2011, and that's just 10 percent of its total mobile population. Clearly, the upside potential for mobile broadband adoption is huge.

Subscription growth for the China-developed TD-SCDMA standard has been slow due to lack of compatible handsets, but 16 million new connections over the past two quarters suggest growth is accelerating.

TD-SCDMA subscriptions are forecast to reach 100 million by the end of 2013. 3G adoption is expected to ramp up in India as well, where 3G networks went live only last year.

India's largest network operator by subscribers, Bharti Airtel, launched early in 2011 and gained three million 3G customers in less than six months of operation. Low-cost smart feature phones are already entering these markets to drive new 3G connection growth.

Thursday, November 24, 2011

Upside Potential for Mobile App Localization in China

Did you know that there's a mobile applications (apps) ecosystem in China? Were you aware that the total mobile application downloads for both smartphones and feature phones in China will reach 5.5 billion next year. This is an emerging market opportunity with immense potential.

"As the app market in the West gets crowded, content providers and developers are eyeing new markets, such as China, which has the world's largest subscriber base," says Dan Shey, practice director at ABI Research.

The ongoing expansion of China's 3G mobile service subscriptions -- which are expected to jump from 102 million in 2011 to 540 million in 2016 -- are driving app download growth.

"Feature phones are an important market for app developers, maintaining a large share of the app store user base over the next few years," says ABI research analyst Fei-Feng Seet. "Regardless of device type, successful apps in the Chinese market are those with a local look and feel and incorporate local content."

Examples are game apps like "Plants vs. Zombies" from PopCap and "Need for Speed" from Electronic Arts, both of which include instructions in Chinese so users could easily understand the game.

Halfbrick Studios launched a tailored version of "Fruit Ninja for China" that includes peaches as a new fruit and has a background image with the 12 Chinese zodiac animals. The localized app was updated five times ahead of the main English app, which was pirated.

Achieving app localization can also mean working with local partners -- such as Renren and Weibo, two Chinese social networking sites. Besides, localized apps have become the norm. Today, more than 90 percent of apps offered by China-based app stores are in Chinese and include local content.

Pricing and payment options are critical to success in the Chinese app market. Chinese consumers are very price sensitive and less willing to pay the same fees as U.S. consumers for the same content.

To help alleviate such issues, local app stores Mobile Market, WoStore, and eStore allow developers to price apps much lower than other stores, such as Apple. They also offer mobile carrier billing or support for local online payment accounts.

The upside potential for mobile device apps in China is huge, and it's a market that isn't already saturated.

Wednesday, November 23, 2011

New Fiber Networks Built to Fill the UK Market Gaps

The UK superfast broadband arena finally has some new players. They're focused on building fiber networks in places that desperately need it. This was encouraging news for the British government and digital industry stakeholders that gathered for the recent NextGen 11 conference in Bristol.

"Our regular survey of alternative superfast infrastructure projects shows a second wave of players with new money entering the market," says Annelise Berendt, Senior Analyst at Point Topic. "While BT's plan to increase the pace of its next-generation network rollout, Virgin Media's 100Mbps network upgrade and Fujitsu's challenge for government money are well known, they are joined by several smaller players who have persuaded financiers to put up cash."

These new players include CityFibre, Gigaclear, Call Flow Solutions and Hypnotic.

"Meanwhile, Kingston Communications, the incumbent in Hull, has begun upgrading areas of its network for fibre-based services, launching a trial in September 2011," adds Berendt. "And there are other names getting involved through the BDUK framework such as Network Rail, Balfour Beatty and Thales in addition to BT and Fujitsu."

BDUK (Broadband Delivery UK) is the agency charged with using over £500 million of government funds to help build superfast broadband where it would otherwise not be available. BDUK has created a ready-made bidding framework to ease the task for the local economic partnerships which will be charged with spending the money.

Seeking a Globally Competitive Broadband Infrastructure

CityFibre Holdings has acquired the part-built fibre-to-the-home network installed in Bournemouth by the now-defunct Fibrecity enterprise. From that base CityFibre is trying to raise the money to deploy fibre to one million homes and 50,000 businesses in secondary towns and cities.

Sub-loop unbundling pioneer, Rutland Telecom, has sold a majority stake to Gigaclear and has now outlined county-wide ambitions.

New player Hypnotic, which focuses on taking fibre to apartment blocks, announced its first deployment in October 2011, and Call Flow Solutions, already involved in publicly-funded projects in Kent, is rolling out commercial sub-loop unbundling installations in the village of West Peckham.

"With the BDUK funding allocation process now well underway, and new sources of private sector investment coming forward, this all looks promising for superfast broadband Britain," explains Berendt. "But on the other hand from past experience, we know it takes a long time for investment, plans and network rollouts to turn into real customers."

The prospect of a number of alternative superfast broadband networks also brings challenges in terms of network integration. Regardless, the launch of each new service provider is welcomed news to the proactive British policymakers who have tried to create the environment where the country can catch-up with the recognized global market leaders in Asia -- who already have invested heavily in superior telecoms infrastructure.

Tuesday, November 22, 2011

The Convergence of eReader and Tablet Technology

According to the latest market study by Juniper Research, they now forecast that eReader shipments will reach 67 million by 2016 -- that's nearly triple the 25 million devices they expect to reach the market in 2011.

While this is less than half the 55.2 million media tablets that will be shipped this year, the price of the market-leading Amazon Kindle eReader has fallen significantly (from $349 to $79) since it was launched.

According to Juniper's assessment, electronic ink technology will ensure that eReaders continue to carve out a significant niche in the portable wireless device ecosystem.

Amazon recently announced its first media tablet, the Kindle Fire, which many thought might signal a shift away from dedicated eReaders in its overall device strategy.

However, in tandem, it announced three new Kindle eReader models -- two of which include touchscreen technology, borrowed from tablets, and now considered as a must-have feature in many of the new devices.


"Amazon has done its homework: it knows there is not a one-size-fits-all device that makes everyone happy. While the Apple iPad 2 -- which it sells -- is a premium tablet for Generation Y, Amazon has the wider market covered,” said Daniel Ashdown, research analyst at Juniper Research.

Amazon's new line-up of eReaders (priced from $79 to $149) offer a range of options, and the Kindle Fire (priced at $199) offers a mass market alternative to the popular Apple iPad and other higher-priced media tablets.

Barnes & Noble is also covering its bases with the Nook Color, a touchscreen LCD eReader with an app store that includes many of the more common applications.

Looking further ahead, Juniper found that consumer electronics vendors are already exploring device convergence -- via hybrid displays which integrate both LCD and electronic ink technology.

While LCD is superior for high resolution video applications, electronic ink provides a more comfortable reading experience and utilizes less energy -- thereby extending battery life.

Monday, November 21, 2011

Canadian PC Market Saturation Reaches Tipping Point

IDC Canada released highlights from its third quarter of 2011 (3Q11) market assessment for the PC industry. The overall Canadian Client PC market proved to be fairly resilient with strong shipment numbers despite a negative year-over-year growth rate of -0.4 percent -- just behind the 0.7 percent growth in the U.S. and 1.3 percent growth worldwide.

Total PC shipments in Canada reached 1,921,032 units in 3Q11, which is a mere 6,833 units shy of the all-time high set in Q3 2010. Portable PC market performance posted a strong 5.7 percent year-over-year growth on 1,368,432 units.

Portable shipments in 3Q11 were the highest on record and just short of the total shipments for the full year 2005. Portable PC shipments in Canada made up 71.2 percent of all shipments, which is higher than the worldwide share for portable PC shipments of 64.7 percent.

As expected, desktop PC shipments were down 12.7 percent year over year with only 552,600 units shipped. HP led the overall Canadian Client PC market with a 24.9 percent unit share, gaining slightly from the 24.2 percent in 3Q10.

HP once again led the desktop space with 29.4 percent share and regained the top spot in portables with a 23.0 percent share. Acer took second spot with a 16.8 percent share of the overall Client PC market. Acer had the second largest share of portable PC shipments, with a 19.5 percent share, and came in fifth in the desktop market, with a 10.0 percent share.

Dell rounded out the top three with a 13.1 percent. Apple's share of the market surged for the third quarter gaining 2.9 percent over 2Q11 and ending the quarter with a 12.3 percent overall share, which is the best ever finish for Apple.

Within these results, there is furious competition heating up for market share. In the third quarter of 2010, the top 5 vendors had a combined market share of 80.4 percent of the market. In 3Q11 that share dropped to 75.2 percent share.

This decline and the 26.5 percent year-over-year growth in the Others category of vendors, including white box players, are indicative that the marketplace may be approaching a tipping point in terms of product. For example, IDC has identified more than 30 vendors that ship portable PCs into Canada.

Commercial PC shipments grew 7.2 percent year over year. The SMB segment accounted for more than 51 percent of units shipped into the Commercial segment and grew at a brisk 15.7 percent year over year. The rapid increase in portable shipments in the Commercial segment is especially noteworthy.

In 3Q11, portable shipments surpassed 60 percent of total commercial PC shipments. Compared to 1Q10, when portables represented only 48.8 percent of commercial shipments, the rise of portables has been impressive.

Saturday, November 19, 2011

U.S. Consumer Online Shopping to Reach $195 Billion


Americans are expected to hold back on their winter holiday shopping spend this year, because of rising prices for basic commodities such as food and utility services -- as well as their concerns about the overall economy.

In fact, several pre-holiday surveys have already confirmed that shoppers intend to spend either the same or less on purchases during the 2011 holiday season, when compared to last year.

That being said, the convenience and anticipated cost-savings from online shopping will likely bring more people on the web for the holidays -- spending a greater share of their gift budget with a variety of online retailers.

eMarketer estimates that U.S. retail ecommerce holiday-season sales, which include all retail ecommerce sales during November and December, will rise by 16.8 percent this year to $46.7 billion.

"This marks three years of strong online holiday sales and demonstrates the web’s ability to help consumers achieve their holiday gift buying goals in a weak economy," said Jeffrey Grau, eMarketer principal analyst. "Strong online holiday spending, in turn, will boost ecommerce sales to $195 billion for the whole year, up 16.5 percent over 2010."

As a result of strong growth, the online share of total retail sales is gradually increasing, with the biggest gains taking place during the holiday season.

Overall retail sales growth during the holiday season is expected to be lackluster compared to online ecommerce: mainstream retailer estimates range between 2.5 and 3.5 percent in their growth projections for total holiday retail sales this year.

Ecommerce is not immune to economic downturns, but it is more insulated than the overall retail industry. Price-sensitive consumers view online shopping as a way to find better prices and reduce gas expenses.

Many of them plan to increase their holiday purchases online. But even shoppers who intend to buy in-store -- after doing online research -- may ultimately purchase from retail sites that offers better deals.

Moreover, some savvy shoppers will likely use their smartphones to check prices or read product reviews while in transit to local retailers, and thereby influence their final purchase outcome.

Friday, November 18, 2011

Mobile Broadband Drives Service Provider Investment

Infonetics Research released excerpts from its latest global market study of the telecom service provider sector, which analyzes capital expenditures (capex), operational expenses (opex), revenue per user, and subscriber trends by network operator, operator type, region, and telecom equipment segment.

Overall, the 6 percent increase in global telecom carrier capex in 2011 over 2010 is due in large part to the AT&T ramping 4G LTE wireless network deployments, HSPA+ upgrades, and investments in Wi-Fi hotspots for traffic offload.

The AT&T increase somewhat offsets the Verizon Wireless slowing of mobile infrastructure spending -- since their 4G LTE deployment peaked earlier this year.

In the EMEA region, a capex hike in Africa is partially offsetting delays in telecom investment in Greece, Italy, and Hungary. Asia Pacific remains stable, and in the Caribbean and Latin America (CALA), America Movil and Telefonica -- the two telecom giants that control 75 percent of mobile subscribers there -- are preparing their infrastructure to host the soccer World Cup in 2014 and the Olympics in 2016.

"We maintain our view that the sovereign debt crisis that is paralyzing Europe continues to have little impact on our telecom capex forecast. As long as credit remains available to telecoms at a fair price, the ongoing sovereign debt crisis should have little impact on telecommunications equipment spending," said Stephane Teral, principal analyst at Infonetics Research.

Broadband service provider investment plans across world regions suggest mobile broadband and fiber to the customer premise (FTTx) will become the primary focal point, going forward.

Highlights from the Infonetics global market study include:
  • In the 10 years from 2005 to 2015, telecom service provider revenue has shown and will continue to show year-over-year growth every year except in 2009.
  • Following a 4.1 percent increase in 2010 over 2009, telecom service provider revenue will grow 7.6 percent in 2011, to $1.86 trillion.
  • Telecom carrier revenue is forecast to grow to $2.17 trillion in 2015, driven by mobile broadband.
  • Global telecom carrier capex to total $310.8 billion in 2011, up 5.8 percent over 2010.
  • Service provider spending on every type of next-gen telecom equipment except TDM voice is up in 2011.
  • The fastest-growing investment areas among telecom carriers in 2011 are WiMAX equipment (+27.5%) and video infrastructure (+20.7%).
  • The largest investment areas remain non-telecom/datacom equipment (software, real estate, labor, etc.) and mobile infrastructure, global spending for which is growing 7 percent and 8.6 percent, respectively, in 2011 over 2010.
  • Asia Pacific will continue to be the largest telecom carrier capex region through 2015, driven by China Mobile, which ended 2010 as the world's largest mobile operator by revenue.
  • Wireless pure-play operators will grow to account for nearly one third of all telecom carrier capex by 2015.

Thursday, November 17, 2011

Satellite Pay-TV STB Unit Shipments to Grow in 2012

As the year comes to a close, 2011 will be remembered as a difficult time for many players in the video entertainment industry. The growth of online video viewing on-demand, and other significant market transitions, have taken a toll on the pay-TV marketplace.

The worldwide satellite set-top box (STB) market has experienced slow to negative growth in recent years as both the number of subscribers and the conversion from SD to HD has changed the market dynamics.

That trend is about to change. According to the latest market study by In-Stat, they are forecasting that digital satellite STB unit shipments will grow by nearly 14 percent in 2012.

"New technology in many ways is powering the expected uptick in unit shipments," says Michelle Abraham, Research Director at In-Stat.

Increasingly powerful processors enable a more personalized viewing experience with downloadable apps and recommendation engines.

An improved graphics capability also enhances the user experience, providing satellite service providers with a new feature set to compete for subscribers.

In-Stat's latest research findings include:
  • The Asian market is expected to stabilize, following slow subscriber growth.
  • In North America, the move to a server/client model impacts shipments because client devices will not all be set-top boxes.
  • The Indian market has experienced huge growth with 6 platforms competing for subscribers.
  • Pace was once again the top supplier of satellite STBs in 2010 with Technicolor and EchoStar following as was the case in 2009.
  • SD DVRs will disappear in some markets in favor of HD DVRs, although we expect them to remain in some cost-conscious markets.

Wednesday, November 16, 2011

The Evolving Role of Media Tablets in a Post-PC Era

More people will purchase their first media tablet, or a similar device, this coming holiday season. IDC Canada shared some insightful findings from their latest market study of new device owners. Today, Canadian consumers have many alternatives to choose from when making a media tablet purchase decision.

This week, the launch of the Amazon "Kindle Fire" and the Barnes & Noble "Nook Tablet" will likely establish yet another segment within this device category for consumers to explore and consider.

IDC now tracks 50 different media tablet models in Canada alone, compared to just a handful at this time last year. The plethora of devices has made it challenging for the average person to evaluate and select the device most suitable for their needs.

Yet, in some ways, the market has not changed much at all. For the time being, Apple remains the market leader. But the market is about to evolve -- with a continuous change in the mix of portable device vendors, a growing apps ecosystem and a multitude of available multimedia content.

In their recently published report, IDC looks at potential buyer's thoughts, perceptions, and intentions with respect to media tablets in Canada. Key takeaways from this report include:
  •  Purchase Location Matters: Specialty retail stores will remain top of mind when consumers purchase a media tablet. However, mobile network service providers are expected to increase their relevance and share of the channel.
  • Pricing Pressure on the Horizon: With the consumers' ideal price range currently well under $500, vendors that have not already adjusted their price points will need to do so soon in order to compete for market share.
  • Content Matters: Hardware is not the differentiating factor moving forward. Instead, the back-end ecosystem, accompanying content/apps, and user experience are more likely to dictate who will ultimately win in this market.
  • Consumers Are Not Replacing PCs...Yet: Some of the very features that make media tablets so attractive, are the same features that may prevent them from cannibalizing the PC market.
"In the media tablet market, there is Apple, and then there is everyone else. These other competitors will be left to duke it out, driving down prices," said Krista Napier, senior analyst, Competitive Intelligence & Emerging Technology at IDC Canada. "To maintain profitable businesses, all competitors in this space will need to look beyond the hardware, and consider the ecosystem, content, and experiences behind the devices, which will ultimately drive success."

IDC Canada conducted the consumer survey in September 2011 with 1,005 respondents, to better understand their perceptions, preferences, and intentions with respect to media tablets. This study is the second report in a two-part series that looks at media tablet usage in Canada.

As the holiday season approaches, I'm thinking that the post-PC era marketplace actually incorporates several potential options, depending upon the user's primary application needs. It includes instant-on media tablets, enhanced eReaders and Chromebooks. That said, there's still the wildcard -- the emergence of a quick-start, lower-cost, and purpose-built Ultrabook PC segment that could further fragment the market.

Tuesday, November 15, 2011

87.4 Million People in the U.S. Own a Smartphone

comScore released data outlining the key trends in the U.S. mobile network services marketplace during the three month average period ending September 2011. The study surveyed more than 30,000 U.S. mobile service subscribers.

For the three-month period, 234 million Americans age 13 and older used mobile devices.

Device manufacturer Samsung ranked as the top OEM with 25.3 percent of U.S. mobile subscribers, followed by LG with 20.6 percent share and Motorola with 13.8 percent share.

Apple strengthened its position at #4 with 10.2 percent share of mobile subscribers (up 1.3 percentage points), while RIM rounded out the top five with 7.1 percent share.

87.4 million people in the U.S. owned smartphones during the three months ending in September -- that's up 12 percent from the preceding three month period.

Google Android ranked as the top smartphone platform with 44.8 percent market share, up 4.6 percentage points from the prior three-month period.

Apple secured the #2 position, growing 0.8 percentage points to account for 27.4 percent of the smartphone market. RIM ranked third with 18.9 percent share, followed by Microsoft (5.6 percent) and Symbian (1.8 percent).

In September, 71.1 percent of U.S. mobile subscribers used text messaging on their mobile device, up 1.5 percentage points. Browsers were used by 42.9 percent of subscribers (up 2.8 percentage points), while downloaded applications were used by 42.5 percent (up 3.0 percentage points).

Accessing of social networking sites or blogs increased 2.4 percentage points to 31.5 percent of mobile subscribers. Game-playing was done by 28.8 percent of the mobile audience (up 1.9 percentage points), while 20.9 percent listened to music on their phones (up 1.9 percentage points).

Monday, November 14, 2011

Global Pay-TV Market Growing to $353 Billion by 2015

Infonetics Research released excerpts from their "Pay-TV Services and Subscribers" report, which forecasts and analyzes the telco Internet protocol television (IPTV), cable video, and satellite video services markets.

Back in 2008, cable video made up 59 percent of the global pay-TV market, satellite video brought in 38 percent and IPTV was a much smaller piece of the total addressable video entertainment marketplace.

Today, cable operators are being challenged not only by attractive pricing and services from IPTV and satellite operators, but by all over-the-top (OTT) video service providers -- such as Netflix and Amazon On-Demand -- which are prompting some consumers to disconnect traditional services.

Based on the study findings, there should be no doubt that the global pay-TV market is in a period of transition. Net new cable video subscribers continue to decline in North America and EMEA, and the small increases in Asia and Central and Latin America are not offsetting those subscriber losses.

"While we don't expect OTT to have a significant impact on pay-TV subscribers because operators are responding to OTT with their own enhanced delivery offerings, we do expect cable video's share of pay-TV revenue to decline as satellite video increases -- nearly catching up to cable by 2015 -- while IPTV services grow to 15 percent of the market," notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.

Infonetics latest market study highlights include:
  • The global pay-TV market, including telco IPTV, cable and satellite video services, totaled $125 billion in the first half of 2011 (1H11) and is forecast by Infonetics Research to grow to $353 billion by 2015.
  • Most of the future growth in the pay-TV market will come from satellite video and telco IPTV services.
  • North America remains the highest-value pay-TV market, benefitting from the highest average revenue per user (ARPU), followed by Asia-Pacific, which benefits from a pay-TV subscriber base nearly 4 times the size of that of North America.
  • DirecTV and Comcast are the global market leaders for pay-TV service revenue and subscribers in 1H11, respectively, with DirecTV continuing to enjoy the highest ARPU in the industry and Comcast now with 22.5 million subscribers.
  • In the first half of 2011 (1H11), the top 20 pay TV revenue leaders accounted for 52 percent of the revenue, while the top 20 subscriber leaders represented just 29 percent of the subscribers.

Saturday, November 12, 2011

How Retailers Can Engage the Mobile Savvy Shopper


eMarketer reports that online retailer sales are growing fast, but the vast majority of consumer spending still takes place offline in local stores. Are retailers prepared to re-design their online presence, optimized for mobile device interaction, to capitalize on their customer's evolving shopping behavior?

A large portion of those in-store sales are influenced by online research, most of which is conducted at a consumer's home. But increasingly, consumers are taking advantage of the just-in-time access to information via smartphones -- to perform more of this online research while in a store, or while in transit between stores.

"While online sales are measured in billions of dollars, the store sales influenced by web research are worth trillions of dollars," said Jeffrey Grau, eMarketer principal analyst.

The desktop has been the prevalent place for cross-channel shoppers to do online research, but there are signs that a significant share of this activity is now transitioning to mobile and social platforms.

Some 70 percent of consumers checked an online source before visiting a local business or restaurant, according to a survey from local content and advertising network CityGrid Media -- conducted by Harris Interactive in March 2011.

Google was considered to be the leading research source, 13 percentage points ahead of online yellow pages. Consumers also checked review sites (13 percent) and Facebook (12 percent).

More and more of that research is shifting to mobile shopping related apps -- as smartphone adoption and mobile internet penetration increase.

Retailers are beginning to understand the value of smartphones in driving traffic to their stores, and they are learning how to engage the informed mobile-savvy shopper.

According to a study by Retail Systems Research (RSR), the percentage of retailers worldwide that said smartphones have a lot of value in driving traffic to their stores increased from 20 percent in 2010 to 31 percent in 2011.

"Mobile in-store shoppers present an opportunity for store-based retailers," said Grau. "Retailers that invest in mobile technologies not only stave off competitors but create a more convenient and rewarding shopping experience. For consumers, the ability to easily find product information and access coupons and rewards, in turn, inspires customer loyalty."

Friday, November 11, 2011

London 2012: Plans for Superfast Broadband Legacy

Preparations for the London 2012 Olympics includes plans for broadband infrastructure upgrades across the UK. Coverage of the sporting events will create a multitude of digital media content, but the ultimate legacy will be a platform for long-term socioeconomic development within the nation.

Point Topic predicts there will be over 10.5 million superfast broadband lines in Britain within the next five years. With another 4.6 million cable broadband connections this means that almost 60 percent of broadband customers -- and more than half of all homes and businesses -- will be using superfast speeds of 30 megabits or more by the end of 2016.

"It's still a risky and controversial forecast," says Tim Johnson, Chief Analyst at Point Topic. "It is always difficult to predict something which is expected to grow so fast. If the forecast is correct, the number of superfast lines will grow 50 times over between mid-2011 and the end of 2016."

But there's uncertainty about both the technology and the market. BT is a late starter in this area. Its superfast technology will be mainly Fiber To The Cabinet (FTTC), which means laying new optical FTTC, then providing short-range but high-speed digital technology over ordinary telephone lines for the last few hundred metres.


 If They Build It, Will They Come?

"Even more fundamentally, the strength of demand is not there yet," Johnson points out. "Users are not exactly crawling over each other to get superfast broadband today. But we do believe that the demand for bandwidth will continue rising steadily just as it has done for the past 15 years."

By 2016, 30 megabits will be regarded as a good standard connection and 100 megabits by 2021 he predicts. As far as the technology issues are concerned, BT is already running slightly ahead of Point Topic’s forecasts for this year.

Its announcement yesterday that it will bring forward its FTTC rollout by a full year is an encouraging vote of confidence. The company is already rolling out on a much bigger scale than most of its peers in other countries.

"BT is doing better than we expected a few months ago," says Johnson. "Speeding up the rollout shows they are getting on top of the problems."

BT’s revised plan aims to ensure that at least two-thirds of homes and businesses in the UK will have superfast broadband available by the end of 2014. Point Topic’s forecast projects that not only will superfast be widely available, it will also be taken up by users in commercially attractive numbers.

Meanwhile, the emerging technology start-ups in TechCity UK -- or anyone who cares about the future of the British economy -- will be hoping that this infrastructure will become a catalyst for new growth. Millions of demanding tech-savvy users will be depending on the delivery of a globally competitive superfast broadband network.

Thursday, November 10, 2011

Online Video to Transform Pay-TV in Canadian Market

International Data Corporation Canada (IDC Canada) released key highlights from its latest market study of online video entertainment, and provided details from IDC Canada's Online Video Index.

At present, the Canadian online video market remains very complex: each service has a different approach and is at a different stage of development. As a result, there are no accepted or proven business models to pave the way.

"Innovation will continue to drive this market," said Emily Taylor, Consumer Technology & Services analyst at IDC Canada. "The introduction of new devices and new platforms -- including consumer cloud services -- will strengthen services as well."

Competition will only get more intense, given that major brands like Walmart are active in the U.S with online video services -- with its VUDU offering -- and it is only a matter of time before they enter the Canadian market.

In the Index, IDC evaluates Canadian online video services across four factors: availability, content, user base, and price. The services assessed in this study were selected as they are content aggregate and distribution sites, available in Canada, that require consumers to pay to access full-length, premium content.

A total of 11 services were profiled in this study.


 Other key findings from the study include the following:
  • One size does not fit all -- For some consumers, one or two pieces of content online per month will be suitable; while others will rely on these services for much of their programming. This presents a dilemma to providers – cater to all or risk losing out on one or the other group.
  • Device Partnerships Key -- Partnering with device makers to include support on TVs, set-top boxes, Blu-ray players, gaming systems, and DVRs will increase reach, as will increasing mobile device platform support. Providing this support for all content across multiple devices – seamlessly – will create a strong service.
  • Traditional Pay-TV Services Will Continue Their Evolution -- All online video services rely on the Internet, and this places service providers in a powerful position. It is expected over time that Canadian household penetration of broadband Internet will outpace pay-TV services.

Wednesday, November 09, 2011

How Broadband Affordability Limits Global Adoption

There are people in developed nations who simply don't want broadband access to the Internet -- clearly, they're now in the minority. Increasingly the most significant barrier to further broadband adoption around the world is affordability -- or the lack thereof.

Now leaders across the telecom sector are working together to bring broadband services into the reach of the digitally deprived, according to the latest market study by Point Topic.

With superfast broadband solutions finally reaching the marketplace, it is more important that infrastructure suppliers are able to align their network offerings -- and service providers implement delivery solutions -- that are cost effective.

Standards are core to the effort says Point Topic CEO Oliver Johnson. "The next wave of broadband, commonly entitled Superfast, is gathering momentum."

With more than half a billion fixed lines already in use and many markets extending the reach of fixed broadband across their populations, the spectre of a deepening digital divide rears its head.

On a global basis, if service providers can shave 1 percent off the cost of a broadband service then that brings it into the economic reach of at least another five million households.

While some countries have already deployed fiber optic infrastructure through a large percentage of their networks there are plenty of places, commonly outside the business districts and high density areas, that will not support a commercial roll-out of full passive or active optical implementations.

"GPON is winning the debate," says Johnson. "Its economic advantages, particularly at the moment, are a powerful argument and mean that it’s likely to be the dominant fiber technology for the next few years at least."

Standards can help make the savings even more attractive. Economies of scale are significant in producing and providing the necessary infrastructure elements for GPON deployment -- particularly when it comes to commercial consumer roll-out.

Johnson says "It’s way too early to say we’ve solved the availability issue for broadband. There are still plenty of countries with lower penetration. That said, the majority of those countries are where broadband services are not in households -- because they can’t afford it. Even in mature and relatively rich broadband markets there are significant shortfalls in take-up due to the cost of a subscription."

Standards are one component of a plan of action to reduce the price of a broadband access for those who seek its socioeconomic benefits. Service provider competition and technological advances can also make a significant impact.

Tuesday, November 08, 2011

U.S. Mobile Banking Service App Use is Increasing

comScore released an analysis of mobile financial services usage showing that 32.5 million Americans accessed mobile banking information on their devices at the end of Q2 2011 in June -- representing 13.9 percent of all mobile users.

The study also revealed that 12.7 million mobile users reported using banking applications (apps), showing a notable increase of 45 percent from Q4 2010.

“The investments in mobile made by financial services institutions, along with the continued growth in smartphone adoption, have had a truly positive effect on the use of mobile financial services,” said Sarah Lenart, comScore vice president for Marketing Solutions.

New apps and mobile-enhanced sites have made it easier for customers to seek out financial information using mobile devices. With media tablets gaining popularity in addition to smartphones, financial service institutions can anticipate additional growth in demand.

Nearly 14 percent of the total U.S. mobile audience (32.5 million users) accessed mobile banking services in June 2011 -- that's up by 21 percent from Q4 2010. Mobile credit card services saw an even greater increase, with 18.4 million mobile users accessing credit card information -- up 23 percent from December 2010.

Mobile auto and property insurance services also exhibited strong gains as 7.2 million mobile users accessed insurance information on their devices -- a 19 percent increase.

In particular, mobile banking and credit card app usage have seen sizeable increases. 12.7 million mobile users reported having used a banking app in June (up 45 percent from Q4 2010), while 6.0 million users used a credit card app (up 43 percent).

An analysis of credit card customers’ engagement with various account channels shows users reporting more frequent access through mobile channels than fixed-line computers in Q2 2011. 62 percent of credit card customers reported using an app to visit a bank’s web site at least once a week, and 52 percent reported checking in with the same frequency via a mobile browser.

In comparison, only 34 percent of users responded checking into their accounts with the same frequency from a fixed-line computer.

Monday, November 07, 2011

96% of LatAm Users Access Social Nets via Mobiles

Mobile devices, such as low-cost smartphones and small media tablets, will become the consumer platform of choice for accessing the internet and social networking sites in Latin America (LatAm).

In fact, if the mobile social network market continues to develop at the current rate, then the region can achieve 116.8 million mobile social network users by 2015, according to the latest market study by Pyramid Research.

Their recent report outlines the current state of mobile social networks in Latin America and the changes that Latin American mobile network operators and device manufacturers need to make -- in order to catch up with the developed world, where mobile social networking is increasing business opportunities.

This report discusses those changes and how much progress Latin American service providers have made thus far. Latin America has an extremely high penetration of active social networking site users.

Currently, 96 percent of the online population accesses some social network in the region. The number of social network users is expected to grow to about 98 percent, or 229.1 million users in 2015.

"With strong adoption of social networks and a culture that highly values the ability to be connected to others, Latin America provides fertile ground for opportunities and growth in mobile social networking," said Vinicius Caetano, Senior Analyst at Pyramid Research.

Besides, many of the conditions that are key to mobile subscribers getting the best use of their social network applications (apps) are already being met by network operators in numerous Latin American markets.

The recent deployment of 3G, new data plans offered by operators and the increasing popularity of smartphones are some important examples of ongoing market development in the region.

"The right evolution on these fronts will soon place Latin America among the largest markets for mobile usage of social networks," says Caetano.

Sunday, November 06, 2011

Next-Generation Online Video Player Applications

My recent independent consulting efforts have been focused partly on the research and development of new and emerging media applications -- with multiplatform transmedia projects in particular. The discovery of creative new forms of visual entertainment has been a focal point of my work in this area.

Moreover, experimenting with consumer electronics (CE) devices that facilitate increased consumption of online video content has changed my perspective of the future of in-home entertainment. During that exploratory process, I’ve abandoned traditional linear broadcast television -- and fully adopted on-demand service delivery offerings.

Streaming online video content to my primary TV set, via a first-generation media player, helped me evolve my perspective of the upside potential for Web-based multimedia. My prior online content experience revolved around my viewing video on a much smaller notebook computer screen.

Clearly, a typical PC display is not the best way to consume long-from content -- but it’s often the only way to be exposed to everything that’s available on the Internet.

While much of my time over the last year has been invested in exploring the depth and breadth of the available content delivered via a Netflix subscription, I’ve also used the first-generation Roku streaming player’s ability to add channels.

I’ve been pleasantly surprised by the ongoing addition of these video channels -- they are essentially device applications (apps) that are built using an open software developer kit (SDK).

The Media Player Market Opportunity

Much of the recent discussion about embedded video apps has been regarding the emergence of Connected or Smart TV sets. However, the largest addressable market is -- by far -- the legacy TV sets that can only utilize these apps via a peripheral device, such as a streaming player.

I’ve been using a next-generation device -- the NETGEAR NeoTV streaming player -- for the last month, and I really appreciate the user experience advances enabled by this new product. The NTV200 player has many of the capabilities that I’m already used to -- plus, some forward-looking features that demonstrate where this product category is heading in the future.

Access to current feature films via the VUDU service is a welcomed addition (previously, I’ve used the Amazon video on-demand service). YouTube Leanback is another option that I’ve not used before. The sleek handheld NeoTV remote, in combination with intuitive on-screen navigation, greatly enhances the process of finding the best categorized videos on YouTube.

Also, the NeoTV remote control smartphone app, available at the Apple App store and Google Android Market, apparently makes it easy to find and play your favorite movies or share the channels that you are watching on Facebook (which I haven’t used).

The Emerging Market for Innovative TV Apps

Music apps, like Pandora and Napster, work as expected. Besides, there’s already a good selection of channel options to choose from within the NeoTV main menu.

That being said, I believe that the most exciting capability is the integration of FLINGO -- an innovative new app that enables the quick transfer of online video to the TV screen. Flingo is a product and service of Free Stream Media Corp -- learn about their app platform features, and just imagine the creative possibilities for new media companies.

If you want to experience over-the-top video on your current TV set, then consider the NeoTV player from NETGEAR -- it's an innovative device.

Saturday, November 05, 2011

Mobile Apps Potential for Creative Content Marketing


I've been thinking about the numerous ways that marketers are connecting with their customers and prospects via mobile devices -- smartphones and media tablets. Mobile apps that utilize a digital magazine (or eZine) format are particularly interesting, because they offer the potential to enable new forms of multimedia publishing.

Granted, substantive editorial content development is very labor intensive, but I believe that it's more likely to engage a marketer's target stakeholders than the typical mobile advertising campaign.

eMarketer reports that U.S. mobile advertising spending will grow 47 percent in 2012 -- reaching $1.8 billion. Search and display -- banners, rich media and video content -- are emerging as the dominant mobile ad formats.

“Mobile advertising is no longer a question of if - it's about when,” said Noah Elkin, principal analyst at eMarketer. “A key factor pushing mobile advertising toward the mainstream is that mobile web access is fast becoming more the norm than the exception. This makes mobile a greater imperative than ever for marketers.”

Pointing to the continued growth of smartphone adoption and rising media tablet acquisition among U.S. consumers, the latest eMarketer advertising forecast has moved upward. Relative to the September 2010 forecast, mobile ad spending projections for 2011 through 2014 have been revised by 11% to 33% per year.

International markets are experiencing similar momentum, driven by trends in device and mobile web adoption.

According to the eMarketer assessment, all mobile ad formats will see sizeable spending increases through 2015. Moreover, mobile display ad spending will overtake messaging to become the largest overall format in 2012. Within the display category, rich media and video are growing the fastest.

Marketers are approaching mobile from a perspective of both less and more: less experimentation and more commitment, fewer test budgets and more real investment, fewer one-off campaigns and more repeat buys.

Mobile will continue to emerge as less of an afterthought and more of a permanent fixture in digital marketing strategies, according to the eMarketer report.

“Consumers increasingly expect to communicate, network, browse and shop from a range of devices, and the growing sophistication of smart devices will only accelerate this trend,” said Elkin. “But whether consumers access the web from a PC or a mobile device will ultimately take a back seat to marketers’ ability to build campaigns that reach across channels and devices and focus on targeting specific actions.”

That being said, while I believe that mobile device adoption -- and their greatly improved display capabilities -- has increased the potential use and application by marketers, few early-adopters will pursue the path of creative content marketing.

Mobile advertising is the low-hanging fruit -- it's the path of least resistance. However, the savvy marketer that will invest the time and effort to develop a comprehensive mobile commerce strategy will reap the greatest rewards.

If you truly want to differentiate your brand via mobile engagement, then start with a distinctive approach to the opportunity. Consider mobile apps as a creative content marketing vehicle.

Friday, November 04, 2011

Expectations for the Next-Generation Mobile Phone

As more consumers transition to smartphones that are intended for internet access, their device performance expectations evolve -- sometimes in ways that were not anticipated by device manufacturers or mobile network service providers.

According to the latest market study by In-Stat, the rapid adoption and growth of smartphones -- and of other mobile computing devices -- have pushed the expectation needle for the ideal feature set to new levels.

As a result, most handsets today already include a multitude of features like a digital camera, GPS, email capability, touchscreen, and speakerphone, among others.

In-Stat's latest study of U.S. mobile phone service subscribers provides some insight into what features are included in respondents’ ideal phone.

Surprisingly, 75 percent of the surveyed respondents included 4G in that category. It appears that the perceived need for greater broadband speed is apparent to most users.

“Although 4G is an important feature for handset buyers, there is a lot of confusion surrounding 4G,” says Greg Potter, Analyst at In-Stat.

When survey respondents were asked which carrier offered the fastest 4G speeds, the majority of the respondents either didn’t know or felt they were the same across carriers. So, perhaps 4G has already become a commodity "must-have" capability for some mobile device users.

In-Stat's latest market study findings include:
  • Consumers are becoming more entrenched in their choice of operating system, 36 percent will only consider one phone OS, compared with only 23 percent last year.
  • Over 20 percent of T-Mobile users answering the survey said they were planning on switching carriers in the next 12 months.
  • Over 40 percent of respondents have no interest at all in using an NFC payment system.
  • The percentage of people willing or might be willing to pay for Bluetooth is declining -- going from 45 percent in 2006 to 35 percent in 2011.

Thursday, November 03, 2011

29 Billion Smartphone Apps are Downloaded in 2011


Once again, the balance of power has shifted within the mobile ecosystem marketplace. In the second quarter (Q2) of 2011, Google Android overtook Apple iOS to become the market share leader in mobile application (app) downloads.

According to the latest market study by ABI Research, the market shares of Android and iOS were 44 percent and 31 percent, respectively.

“Android’s open source strategy is the main factor for its success,” says Lim Shiyang, research associate at ABI Research.

Being a free and open platform has expanded the Android device install base, which in turn has driven growth in the number of third-party multiplatform and mobile operator app stores.

These conditions alone explain why Android is the new leader in the mobile application market. Recent quarterly shipment growth figures also explain Android’s ascent to the top app download position.

Apple iPhone shipment growth in Q2 2011 slowed to 9 percent -- from 15 percent a quarter earlier. In contrast, Android smartphone shipments increased 36 percent in Q2 2011, compared to 20 percent in Q1.

Android’s install base now exceeds iOS by a factor of 2.4-to-1 worldwide -- by 2016 this factor will grow to 3-to-1.

“Despite leading in total mobile application downloads, Android’s app downloads per user still lag behind Apple’s by 2-to-1,” adds Dan Shey, practice director, mobile services at ABI Research. “Apple’s superior monetization policies attracted good developers within its ranks, thus creating a better catalog of apps and customer experience.”

Global app downloads for year-end 2011 are expected to balloon to 29 billion, compared to only nine billion in 2010. Such stellar increases are largely due to the proliferation of smartphones around the world.

In fact, the total smartphone install base is now expected to grow by 46 percent in 2011.

Wednesday, November 02, 2011

Mobile NFC for Creative New Marketing Applications

As the number of mobile phone-based payment users grows worldwide to over 375 million in 2015, the demand for devices enabled with near field communications (NFC) -- the underlying communications technology behind many mobile payment solutions -- will grow as well.

According to the latest market study by In-Stat, the adoption of this technology will push global annual shipments of NFC chips to over 1.2 billion by 2015.

NFC is a set of technologies that supports wireless communications between two devices in close proximity to each other. An NFC link is very quick to set up, enabling small amounts of data to be exchanged over short distances.

This capability is unique compared to other wireless technologies, and it makes NFC an ideal solution where quick exchange of small amounts of data is paramount to a quality user experience -- such as payments made using a mobile device.

“As the costs of NFC chips decline, and NFC radios are combined with other chip functions, the cost to integrate NFC into handsets will be outweighed by the benefits,” says Allen Nogee, Research Director at In-Stat.

The growth of combo chips will also allow NFC radios to piggyback on technology that already has significant penetration in the market. For example, Bluetooth radios, which currently have 100 percent market penetration, can be integrated with NFC radios, making the choice to include NFC easy for OEMs.

Today, the focus of the NFC market is shifting from payment applications that can be enabled by NFC, to creative new marketing applications.

With this new focus, In-Stat expects that some retailers will begin pilot programs -- in the latter part of 2011 and into 2012 -- that incorporate "smart posters" into their signage and outdoor advertising strategies.

In-Stat's latest market study findings include:
  • NFC will reach 30 percent global penetration by 2015.
  • Global annual shipments of NFC chips will grow at a CAGR of 129 percent over the forecast period.

Tuesday, November 01, 2011

Low Cost Smartphones for the World's Poorest Citizens

The next one billion people on the planet who are first-time users of the internet will likely gain access via a smartphone, not a computer. Moreover, the internet offers them the prospect of new hope and socioeconomic advancement. Why? Many of these people are poor, very poor.

In most developing nations, the typical Android smartphone -- typically selling for $400 to $500 -- is way out of reach for many consumers that currently have a feature phone or perhaps no phone at all.

These potential smartphone owners currently only have one operating system (OS) choice in the low-cost category, (the under-$150 segment) and that is Google Android. Besides, the only mobile service they can afford will most likely be pre-paid.

According to the latest market study by In-Stat, they now forecast that unit shipments for low-cost Android smartphones will approach 340 million worldwide in 2015.

“The low-cost Android handset segment will cause some fragmentation in the Android platform,” says Allen Nogee, Research Director at In-Stat.

Most low-cost Android smartphones are likely to be released with Android 2.2 or 2.3, since these versions are a good blend of features with modest memory and processor usage.

The Ice Cream Sandwich (Android 4.0) step-up in memory and processor demands makes this release less attractive for low-cost Android devices.

In-Stat's latest market study insights include:
  • The low-cost smartphone area is Android’s to lose. This market could get much more competitive, especially as other OS vendors begin to target the space.
  • The low-end low-cost smartphones generally stick with EDGE and processors running at 600MHz speeds or less, and a single-core EDGE chip sells for well under $10.
  • Low-cost means smartphones that are $150 or less.
  • Smaller phone manufacturers will sometimes purchase from the “gray market” where component manufacturers typically don't pay licensee fees, royalties, and taxes for the products they produce.
  • Early competitors in the market include Huawei, MicroMax, Motorola, Samsung, Spice, and ZTE.