Friday, December 19, 2014

In-Store Retail Technology Market Upside in 2015

The applications for smartphones within physical retail environments already extend beyond in-store product or pricing comparisons by consumers. Moreover, the future use-cases that are likely to emerge in the coming year will expand across a variety of retail sectors.

It has been a breakthrough year for indoor wireless location applications for retail, with ABI Research forecasting deployments to approach 25,000 by the end of 2014 -- that's up by more than 100 percent from 2013.

"Vertically, the bulk of deployments are in clothing, big box, grocery, and shopping malls in 2014, driven by a variety of applications such as customer analytics, offers or coupons, product search, staff management, and navigation," said Patrick Connolly, senior analyst at ABI Research.

Looking toward 2015, we can expect to see the quick serve restaurant (QSR) market growing with a significant demand for queue management technologies -- as illustrated by companies like Starbucks and Taco Bell, which launched queue-skipping smartphone applications in 2014.

What is interesting is the technology mix today. ABI is seeing growth across all major technologies -- including BLE, Wi-Fi, and audio -- with 2015 being an important year for handset-based location, sensor fusion, magnetic field, and LED.

Regionally, the focus has been very much on the U.S. market in 2014, but there are now many worldwide deployments. Therefore, expect market development activity to further expand and evolve geographically in 2015.

This is a market where ABI says that they expect to see concurrent growth across the globe with more regional and vertical vendor winners, rather than one particular company dominating the whole space.

ABI's latest market assessment found that shopkick/SK Telecom, Point Inside, and Aisle411 are now leading in deployments at a cross-section of brick and mortar stores.

Over the past 12 months there has been a considerable change in deployments as companies have moved from a handful of deployments to getting into the hundreds and thousands of stores.

In 2015, expect to see camera analytics companies -- such as ShopperTrak, Irisys, and Brickstream -- playing an increasing role as they expand their offering into BLE, Wi-Fi, and in-store analytics.

Also, expect to see a lot of announcements around this growing category at the upcoming NRF 2015 event, as these companies launch new technologies and channel partnerships.

Thursday, December 18, 2014

Mobiles will Combine New Human Interface Advances

The introduction of progressive smartphone designs have truly been a game changer in consumer electronics -- essentially re-imagining the user interface (UI) on a hand-held device. Meanwhile, user expectations have been elevated, as these devices are applied in a broader range of use-cases.

The result is that mobile handset manufacturers have had to innovate and explore new modes of interactive device control that enable users to operate a handset without having to touch it directly.

It's anticipated that by 2019 the global market for services based on gesture and biometric interface technologies will be worth an estimated $1.2 billion, that's up from less than $2 million this year, according to the latest market study by Juniper Research.

Juniper found that innovation in mobile phone hardware and software has paved the way for a new paradigm of handset interaction, including touch-less command and biometric identification.

They believe that although advanced Human Interface technology is unlikely to substitute touch commands altogether, touch-less and biometric interfaces will play a key role in enhancing user experience and handset security.

It cited touch-less screen scrolling, as seen in the Samsung Smart Scroll feature, and the integration of Touch ID into Apple Pay, as examples of key areas in which these technologies are likely to be applied.


While Human Interface innovation has primarily focused on working with the existing hardware of handsets, Juniper's findings infer that software -- not hardware -- will be key to unlocking new potential in the touch-less and biometric space.

They have also highlighted ways in which handset functionality is being significantly enhanced through appware that can access sensor functionality in cameras, microphones and biometric scanners.

In fact, cameras already detect face and eye movements, microphones offer a gateway to voice activated commands and touch screens can detect biometric identifiers -- such as ear, palm and vein prints.

Juniper believes that this year more than 16 million Human Interface apps will be downloaded to smartphones and media tablets worldwide, and ongoing market growth is anticipated through to 2019.

In addition, they have identified further possibilities in sensor fusion, whereby appware will combine sensor capabilities for multi-modal methods of device interaction.

Wednesday, December 17, 2014

The Netflix Disruption of Pay-TV Extends Internationally

Netflix has global mind-share, even though it's officially available in only a handful of countries. The consumer awareness of the subscriber benefits are a testament to the apparent pent-up demand for affordable over-the-top (OTT) streaming video entertainment services.

Growing interest in the Netflix video entertainment offering also demonstrates how the legacy pay-TV business model is equally vulnerable to disruption in other nations -- as it has already proven to be in the U.S. market.

Netflix is expected to achieve 17 million paying subscribers to its international operations by the end of 2014, following its official announcement of 14.4 million international subscribers in September.

Launches in six European countries during September will help to boost the total, according to the findings from the latest worldwide market study by Digital TV Research.

"We have made several adjustments to our previous estimates, based on the June results -- subscriber numbers are now a lot higher in Latin America and a little higher in Canada. Subscriber numbers are now a lot lower in the UK and a little lower in the Nordic countries," said Simon Murray, principal analyst at Digital TV Research

Moreover, Murray believes that they underestimated Latin America last time -- due to the historic payment problems that Netflix encountered (low credit card ownership; little electronic banking; low broadband penetration, etc).

Netflix has introduced simpler payment methods -- such as prepaid cards -- which has boosted new subscriptions. However, economic slowdown is expected in the region, especially in Argentina and Venezuela, which could affect Netflix adoption.

These international figures do not include subscribers to the U.S. service who are based abroad (these homes are included in the U.S. subscriber count).

Using the American version of the Netflix service from another country has been achieved by some technically savvy consumers. Apparently, it is relatively easy to do this by using un-blocker software, VPNs and DNS proxies.

This practice is more common in Latin America and Canada than in Europe. Why is this attractive to new customers? The U.S. service provides more video content titles and more recent titles.

Netflix has announced plans to launch in Australia and New Zealand next March. However, it's believed that more than 200,000 Australian homes already subscribe to the U.S. service.

The following chart lists the subscribers in each of the international markets.

Tuesday, December 16, 2014

Explore the Evolutionary Path to 5G Mobile Networks

The mobile internet is pervasive worldwide, as an essential part of more and more people's daily routines. While many of the emerging markets continue to deploy third-generation (3G) and a few deploy fourth-generation (4G) wireless technology, developed markets are already preparing for the future.

According to the latest global market study by ABI Research, it will likely take more than 5 years for fifth-generation (5G) mobile networks to reach the 100 million subscriber mark -- that's two years longer than the 4G network experience.

4G subscriber growth was much faster than with previous wireless technology generations, fueled by the capabilities of increasingly powerful smartphones and the availability of other 4G-enabled devices.

In contrast, 5G subscriber growth will likely be more muted at first, due to the increased complexity and the additional work required to plan and install 5G cells and associated networks, but infrastructure deployments should increase by 2023.

"There are a number of commonalities between countries that are early builders of 5G networks. They have a huge population, of which a large percentage is living in urban areas. They also have many companies pushing the envelope with IoT strategies. These countries will drive 5G subscriber volumes," said Philip Solis, research director, at ABI Research.

The nations that will be on the frontier of the adoption cycle for these new wireless networking technologies include the United States, China, Japan, South Korea, and the United Kingdom -- listed in order of 5G subscribers in 2025.

5G deployment will be a spectrum of evolution to revolution -- it will be an evolution of the way the core network topology is transforming now, but it will be clearly delineated as a fifth-generation mobile air interface on which the mobile network of the future will be built.

5G will encompass spatial division as the foundation of the air interface, leveraging techniques like massive MIMO -- achievable in devices because of the high frequency of spectrum that will be used -- and 3D beam-forming that divide the space around a 5G base-station.

Mobile devices, such as smartphones, will have links to multiple cells simultaneously for robust connectivity. Spectrum will be used flexibly and shift as needed between network access and fronthaul or backhaul.

In the near term, a 5G network will be a cluster of small cells that are practical in urban environments for the population density. However, we should anticipate that a scaled down version of 5G will use existing radio spectrum for macro-cells as well in the longer term.

Monday, December 15, 2014

Technology Predictions that Influence Trends in 2015

As 2014 draws to a close Juniper Research has offered up a list of predictions for the coming year. The following are some of the highlights. Over the past year, technology industries have evolved at a rapid pace. New devices present challenges that must be addressed, in particular the security of consumer data.

In the wake of a number of high profile security breaches, some enterprise companies will need to regain trust. Therefore, Juniper expects to see an increasing investment in encryption and tokenization solutions, as a means of reducing the risk of data loss or theft during 2015.

While smart watches have now arrived, they have yet to endear themselves to most consumers. The release of new wearable devices by big name brands will increase awareness, as well as a series of smaller less known players.

Notwithstanding the continuing reluctance of a number of U.S. retailers to accept Near Field Communications (NFC) technologies, Juniper believes that Host Card Emulation should provide substantial impetus for NFC payments. Expect to see substantial consumer adoption by the end of 2015.

As 4G coverage increases in developed markets, we'll see a paradigm shift in mobile network operator pricing, with data bundled and an array of new services -- including VoIP and third-party messaging. Meanwhile, this shift will contribute to the era of streaming music services.

During 2014, crypto-currency experienced both lows and highs. The first online retailers have begun facilitating bitcoin payment, while online travel firms are also poised to offer the facility. Juniper believes that this trend will increasingly extend into physical retail during 2015.

Civilian drone aircraft usage is now increasing in sectors such as construction, film-making, farming and conservation, while sales are now being bolstered by a burgeoning hobbyist sector. Meanwhile, the price point of higher end drones has fallen to around $400-$500, with mini-drones now available for around $100.

With data sharing health and fitness platforms now available from several mobile device vendors, consumers can now take charge of their own digital health and fitness management. Juniper expects this trend to boom in 2015, as it becomes standard in new devices launched by the leading mobile vendors.

While phablet games have been a feature of emerging markets in the past year, the release of the latest devices will spur new developments in the category for mature markets as well. The greater availability of phablets will encourage their use as a primary media consumption device.

Indoor location technology and services will gain traction in 2015. Where Wi-Fi was the primary enabler to position a mobile device indoors, its inability to calculate elevation was a big limitation. With BLE Beacons now increasing in number, these can combine with Wi-Fi Access Points while using the device-embedded MEMS sensors to provide better location accuracy indoors.

Deep linking will become standard across all mobile applications. From a marketing perspective, indexed apps mean higher engagement, with less need for promotion. From a user perspective, deep linking offers native app integration with the web, with apps now able to offer search results.

Friday, December 12, 2014

More Smartphone App Developers to Support Android

comScore released their latest data reporting key trends in the U.S. smartphone sector for October 2014. While the overall market for new user adoption remains flat, the Google Android platform share appears unchanged -- even after the introduction of Apple iPhone 6 models.

Perhaps this is yet one more reason why software application developers choose to support both iOS and Android platforms. Therefore, we should anticipate that more app developers will join the open-source Android ecosystem in 2015.

Apple ranked as the top smartphone manufacturer with 41.9 percent OEM market share, while Google Android led as the number one smartphone platform with 52.3 percent platform market share.

Once again, Facebook ranked as the top individual smartphone app. However, Google continues to have the most combined share of the top five apps, by a wide margin.

Smartphone OEM Market Share

176 million people in the U.S. owned smartphones (72.9 percent mobile market penetration) during the three months ending in October -- that's up by just 2 percent since July.

Apple ranked as the top OEM with 41.9 percent of U.S. smartphone subscribers. Samsung ranked second with 29.3 percent market share (up 0.9 percentage points from July), followed by LG with 7.4 percent (up 1 percentage point), Motorola with 5.2 percent and HTC with 4.1 percent.

Smartphone Platform Market Share

Android ranked as the top smartphone platform in October with 52.3 percent market share (up 0.8 percentage points from July), followed by Apple with 41.9 percent, Microsoft with 3.5 percent, BlackBerry with 2.1 percent and Symbian with 0.1 percent.

Top Smartphone Applications

Facebook ranked as the top smartphone app, reaching 72 percent of the app audience, followed by Google Play (51.9 percent), YouTube (51.9 percent) and Google Search (47.6 percent). The Amazon Mobile app appears on the top 15 list for the first time.


Thursday, December 11, 2014

How 4G LTE Growth Enables Mobile Internet Access

Mobile internet adoption worldwide is being enabled by ongoing infrastructure investment. 4G Americas reports that the North American market remains in the leadership position of LTE market share worldwide -- with 39 percent of the world’s 373 million LTE connections at the end of September 2014.

LTE connections in North America have grown to 145 million subscriptions, representing 36 percent of the 398 million total mobile subscriptions in the region at the end of the third quarter of 2014, according to Informa Telecoms & Media research.

Latin America continues its growth of HSPA and LTE mobile broadband reaching a 35 percent market share of all mobile connections in the region.

LTE and HSPA in North America Market

"LTE adoption in North America continues to set the course for further growth in mobile broadband innovation with operators continuing to evolve their networks," said Chris Pearson, president of 4G Americas. "It is evident that customers continue to be responsive to LTE’s technology advancements and increased capabilities with more than 65 million added LTE connections in the past twelve months."

LTE has taken an increasingly larger share of the mobile broadband marketplace in North America. HSPA and HSPA+ now hold a 27 percent market share bringing the combined market share for LTE and HSPA mobile broadband in the region to 63 percent.

  • 66 commercial LTE networks deployed in U.S. and Canada.
  • 145 million LTE connections as of September 2014 for net gain of 66 million new LTE customers the last 12 months.
  • 106 million HSPA connections.
  • 251 million HSPA and LTE mobile broadband connections or 63 percent market share

LTE and LTE-Advanced Global Penetration

"LTE now represents 18 percent of all HSPA and LTE subscriptions worldwide as of September 2014 -- this is up from 10 percent just a year ago," said Kristin Paulin, senior analyst at Ovum. "LTE itself accounts for 5 percent of all mobile subscriptions worldwide as of September 2014 after having added 167 million new LTE subscriptions year-to-date."
  • 360 commercial LTE networks today; 386 commercial LTE networks expected by the end of 2014.
  • Over 400 total commitments to LTE deployment by wireless operators to date.
  • 206 million LTE connections at the end of 2013; 373 million as of September 2014.
  • LTE connections are forecast to reach 2.3 billion by 2019.
  • 31 LTE-Advanced commercial networks (Dec 4, 2014) in 22 countries
4G Americas maintains a current list of LTE and LTE-Advanced Global Deployments on its website.

Wednesday, December 10, 2014

Why Broadband CPE Lacks Meaningful Innovation

The device that broadband service providers place in a subscriber's home could be a point of differentiation, but most are basically alike. The vendors merely attempt to reach parity with the stated industry standard requirements. The products are often procured based upon the lowest price.

It's surprising that there is no start-up company that's truly attempting to disrupt this product category. Surely, the service providers would notice if anyone created some meaningful and substantive innovation. Telecom and cable companies have said that they crave vendors that offer new ideas.

Worldwide broadband customer premise equipment (CPE) shipments are expected to reach 151.9 million by the end of 2014, according to the latest worldwide market study by ABI Research.

"The residential gateway segment continues to grow at a rapid pace. We expect global shipments will grow more than 9 percent in 2014," said Jake Saunders, VP and practice director at ABI Research.

Although DSL and cable CPE device shipments still dominate the market, DSL and cable shipments are likely to drop slightly in 2014, due to slow subscriber net additions.

However, as subscribers continue to switch to more advanced broadband access, VDSL and DOCSIS 3.0 device shipments continue to grow robustly.

North America and Europe are the regions with the highest VDSL device penetration. This is because operators in Western Europe are upgrading DSL infrastructure with VDSL and VDSL vectoring technologies.

Total VDSL CPE shipments in the two regions account for around 50 percent of worldwide VDSL CPE shipments.

DOCSIS 3.0 devices dominate the cable CPE market. ABI Research expects shipments will grow 11 percent in 2014, representing nearly 85 percent of total cable CPE shipments.

The expansion of the fiber-optic broadband subscriber base is a key driver of the rapid growth in fiber-optic CPE shipments. In 2014, fiber-optic CPE shipments are likely to grow around 16 percent YoY from 2013, reaching 41 million.

ZTE has the top position in the fiber-optic CPE device market in 3Q 2014, followed by Huawei.

ZTE also has the top ranked position in the overall broadband CPE market. ARRIS has the second largest market share in the overall broadband CPE market, followed by Huawei.

Tuesday, December 09, 2014

Worldwide ICT Market will Reach $3.8 Trillion in 2015

International Data Corporation (IDC) announced its top predictions for the Information and Communications Technology (ICT) sector during 2015. Worldwide ICT spending will grow 3.8 percent in 2015 to reach $3.8 trillion. Nearly all new investment will be focused on what IDC calls 3rd Platform technologies.

"IDC first identified the 3rd Platform in 2007 and predicted that it would eventually become the new core of ICT market growth. In 2015, the 3rd Platform will account for one third of global ICT spending and 100 percent of spending growth," said Frank Gens, senior vice President and chief analyst at IDC.

On a geographic basis, ICT spending in emerging markets is forecast to grow 7.1 percent year over year, while mature markets across the globe will reach just 1.4 percent growth. Wireless data will emerge as the largest ($536 billion) and fastest growing (13 percent) segment of telecom spending.

Mobile devices and software apps adoption will continue grow in 2015. Sales of smartphones and media tablets will reach $484 billion, accounting for 40 percent of all IT spending growth (excluding telecom services). Mobile app downloads will start to slow in 2015, but enterprise mobile app development will likely double.

Cloud services adoption will grow rapidly in 2015, with $118 billion in spending on the greater cloud ecosystem. Adoption of cloud Infrastructure as a Service (IaaS) will grow at 36 percent, as market leader Amazon comes under attack from all directions and challengers attempt the counter their market dominance.

Similarly, competition among Platform as a Service (PaaS) providers will likely increase, as competitors engage in ongoing battles to attract developers and their apps. Meanwhile, Software as a Service (SaaS) players accelerate their adoption of PaaS and cloud marketplaces.

Overall, IDC believes that the Internet of Things (IoT) is one of the most important innovation accelerators for growth and expansion of IT-based value in the global marketplace. The invention of intelligent and connected "things" will drive the development of thousands of new ICT solutions.

One third of IoT spending in 2015 will be focused on intelligent embedded devices outside the IT and telecom industries, helped by partnerships among leading IT companies seeking to kick-start the market for industry-specific solutions.

The majority of raw compute and storage capacity will move to hyperscale data centers operated by public cloud service providers. This shift will spawn new cloud-first hardware innovations and drive greater consolidation among the server, storage, software and networking vendors.

IDC believes a number of significant industry disruptions will emerge in 2015 -- such as alternative payment networks in financial services, expansion of IoT technologies into city government, and the creation of location-based services in the retail industry. IDC also predicts that the number of vertical industry platforms – specialized cloud-based solutions – will expand and double during 2015.

Monday, December 08, 2014

Forecast Predicts Rapid Growth of Mobile Commerce

Over the past 5 years, the scale of mobile commerce in its various forms -- such as banking, money transfer, retail, ticketing and coupons -- has grown at a remarkable rate. Several key factors have served to fuel the deployment of new transaction-based services and their adoption by end users.

Juniper Research has found that the combination of mobile phone and media tablet users will make 195 billion mobile commerce transactions annually by 2019 -- that's up from 72 billion in 2014.

According to their latest worldwide market study, highest growth rates are expected in the NFC (Near Field Communications) sector.

Moreover, usage is expected to be buoyed by the launch of Apple Pay, together with a host of anticipated deployments by banks using solutions based on HCE (Host Card Emulation) technology.

However, the highest net increase in transaction volumes will occur in the digital goods sector, fueled by a surge in micro-payments for in-app purchases, notably within arenas such as online social gaming.

Juniper highlighted the opportunity for digital content monetization presented by direct billing from mobile service providers, particularly within under-banked regions and other demographics in the emerging markets.


"Storefronts that have deployed carrier billing solutions have already seen positive results across a range of indicators - higher conversion rates, higher average transaction values, higher transaction volumes," said Dr Windsor Holden, head of consultancy and forecasting at Juniper Research.

For the first time, retailers can monetize consumers who would otherwise have been excluded either because they lacked a credit card or because they were unwilling to enter card details online.

Meanwhile, the study observed that many mobile ticketing deployments had seen rapid adoption rates immediately post-launch, suggesting a pent-up demand for such services.

In the U.S. market, the Massachusetts Bay Transportation Authority deployed mTicket ,accounting for 15 percent of ticket sales within 9 months of launch, while New York Waterways has reached 25 percent in less than 2 years.

Other findings from the market study include:
  • There is significant transactional migration from desktop to mobile as consumers increasingly "media-stack" (i.e. make purchases on their devices while watching TV).
  • Rather than focusing purely on payments, stakeholders need to emphasize the synergies between mobile payment and loyalty to persuade retailers to become engaged.