Thursday, November 27, 2014

How the Mobile Cloud has Disrupted Demand for PCs

Worldwide personal computer (PC) shipments are expected to fall by -2.7 percent overall in 2014 -- that's actually an improvement from the previous forecast of -3.7 percent, according to the latest market study by International Data Corporation (IDC).

Although third quarter results were a few points ahead of forecast with shipments down only -0.5 percent from the prior year, most regions and market participants saw this as a short-term gain rather than as a sign of stronger growth in the long-term.

Mature regions continue to grow while a rebound in emerging regions has taken longer -- due to a later impact from media tablets as well as slower economics and commercial replacements.

Western Europe and Japan performed better than expected in the third quarter, but the gains were driven by a rebound from last year and short-term factors such as building fourth quarter inventory earlier in the year and continuing Windows XP replacement activity.

Despite the relative short-term strength, mature regions are expected to see PC shipments decline once again in 2015 and contract slightly through the end of the forecast.

The consumer market came in slightly ahead of projections in the third quarter, but shipments are still expected to decline -5 percent in 2014. Pressure from tablets seems to be waning as penetration rises and tablets move to smaller sizes and lower price points. However, competition for disposable income from smartphones and phablets is rising.

In addition, the market was boosted in the third quarter by factors such as a rise in low-cost systems in many markets and a rebound in Western Europe, which helped restore volume to earlier levels but not without cost in value of shipments.


"The expansion of entry-level models, encouraged by Windows 8 + Bing systems, has helped improve consumer volume in recent quarters and should extend past the fourth quarter," said Jay Chou, senior research analyst at IDC. "Chromebooks are similarly boosting the low-end commercial segment. However, the market is still recovering to near stable volumes with no significant growth in the forecast."

In the best case for PCs, IDC expects to see a significant wave of replacements as users who spent on smartphones and media tablets in recent years decide they really need to update their PC. Features like touch or convertibility, as well as Windows 10 could make systems more versatile and appealing, along with lower prices.

However, IDC has seen steady progress on prices and new designs over the past year, and replacements are stabilizing PC shipments but not boosting total volume. So, what's the market outlook?

Going forward, as younger generations become more mobile and Web oriented, and emerging regions in particular prioritize converged devices, the PC market will continue to face tough competition and be more focused on replacements, with limited potential for growth. Clearly, internet adoption and the Mobile Cloud phenomenon has reshaped demand for personal computing devices.

Wednesday, November 26, 2014

Smart City Market will Reach $1.565 Trillion in 2020

Local government CIOs across the globe have been planning to introduce new technology-based services into their communities. New digital services may be coming to a municipality near you, perhaps as soon as 2015.

A smart city is one that has digital technology embedded across all city functions. The global smart city market will be valued at $1.565 trillion in 2020, according to the latest worldwide market study by Frost & Sullivan.

Over 26 global cities are expected to be smart cities in 2025 -- with more than 50 percent of these smart cities from Europe and North America.

By 2025, it is expected that around 58 percent of the world's population -- about 4.6 billion people -- will live in urban areas. In developed regions and cities, the urban population in cities could account for up to 81 percent of total population. This will pose serious challenges for city planners, who will have to re-think how they provide basic city services to residents in a sustainable manner.

Governments of smart cities are transforming from a traditional model of a silo-based organization to a more collaborative, integrated service delivery model. Moreover, progressive city managers will work with their peer group -- regionally and globally -- to drive smart city innovations.

"Technology and ecosystem convergence, collaboration and partnerships between stakeholders from different industries, such as energy and infrastructure, IT, telecoms and government will also expedite the delivery of integrated services," said Ivan Fernandez, industry director at Frost & Sullivan.

Smart cities are built on intelligent solutions that will lead to the adoption of at least 5 of the 8 following parameters -- smart energy, smart building, smart mobility, smart healthcare, smart infrastructure, smart technology, smart governance and smart education.

Smart Energy is the fastest growing market segment within Smart Cities and will be driven by the large scale adoption of smart grids and intelligent energy solutions. Smart Energy will make up 24 percent of the total global smart city market in 2025, growing at a CAGR of 28.7 percent from 2012-2025.

In the last ten years, distributed energy generation is estimated to have more than doubled. Strong growth is expected to 2020, corresponding to nearly half of the increase in total electricity use. The game-changer will be electricity storage -- it will help manage peaks, drive renewable energy uptake and support electric vehicle infrastructure.

Smart Infrastructure will make up 11 percent of the total global smart city market in 2025, growing at a CAGR of 12 percent from 2012-2025. Key parameters of Smart Infrastructure include sensor networks as well as digital water and waste management.

"For smart cities to work, begin with the end in mind. Tailor the technology solution to the DNA of the city -- not the other way round," concludes Mr. Fernandez.

Tuesday, November 25, 2014

Update on the Worldwide Wearable Band Market

According to the latest market study by Canalys, nearly 5 million smart and basic wearable bands shipped in Q3 2014, with total unit shipments increasing 37 percent quarter on quarter.

Furthermore, the Moto 360 was the most successful of the initial Google Android Wear devices, accounting for over 15 percent of the smart band market. Despite being supply-constrained, its appealing design helped it to easily out-ship other products.

LG has responded by quickly adopting a circular display with the G Watch R. Meanwhile, Samsung remained the overall smart band market leader. They have already begun to experiment with larger display sizes and cellular connectivity with the Gear S.

Canalys believes that Android Wear will be key to the development of the market, as it is poised to be one of the two dominant wearable operating systems, alongside the Apple Watch OS. That said, Canalys says Google will need to redesign the Android Wear user interface.


"The announcement of the Apple Watch late in the quarter has likely had an effect on sales of existing devices, as some consumers will choose to wait for Apple's wearable," said Daniel Matte, analyst at Canalys.

The smart band market was flat between Q2 and Q3, but with an installed base of over 1.8 billion Android smartphones, there is a huge potential market of Android users not considering an Apple Watch.

Fitbit and Jawbone held onto their first and second place positions, respectively, in the basic band market for the quarter, and both have just announced new products. Garmin passed Nike to take third place in shipments, while Xiaomi and Huawei also overtook the one-time market leader and rounded out the top five.

Google Fit, Microsoft Health and the Samsung Digital Health Platform have all recently been announced in response to Apple HealthKit. While the new Microsoft Band does not have strong hardware appeal, their cross-platform cloud services approach is a wise strategy, aaccording to the Canalys assessment.

There is upside opportunity for brand new services on wearable platforms, and not just in the area of health and fitness. What's next on the horizon? Canalys says to expect developers to eagerly embrace Apple's WatchKit SDK, when it is released later this month.

Monday, November 24, 2014

Business Imperatives for Network Function Virtualization

According to the latest global market study by 4G Americas, Network Functions Virtualization (NFV) could help mobile network service providers deal with significant challenges facing the industry -- such as capacity limitations, increasing traffic diversity and the need to improve new service delivery agility.

The mobile industry association has explored the considerations for planning NFV deployment, the advantages of the virtualized architecture and the potential challenges of LTE mobile network architectural changes.

Their proposed strategies and solutions aim to address these issues and others by leveraging IT virtualization technology to consolidate many network equipment types onto industry standard high volume servers, networking and storage systems.

NFV is about separating network functions from proprietary hardware and then consolidating and running those functions as virtualized applications on open-source commodity servers. When deployed, NFV will enable mobile carriers to virtualize embedded network functions and run them as software applications within their networks.

NFV focuses on virtualizing network functions such as firewalls, Wide-Area Network (WAN) acceleration, network routers, border controllers used in Voice over IP (VoIP) networks, Content Delivery Networks (CDNs) and other specialized network applications. NFV is applicable to a wide variety of networking functions in both fixed and mobile networks.

"NFV is making great progress throughout the world as operators work with their vendor partners to address the opportunities of increasing efficiency within their network infrastructure elements," said Chris Pearson, president of 4G Americas.

The three primary benefits of NFV include:

  • Service agility, innovation and differentiation: In deploying these new VNFs, time-to-market for new network services can be significantly reduced, increasing the operator’s ability to capture market share and develop market-differentiating services.
  • Improved capital efficiency: Provisioning capacity for all functions versus each individual function, providing more granular capacity, exploiting the larger economies of scale associated with Commercial Off-the-Shelf (COTS) hardware, centralizing Virtual Network Functions (VNFs) in data centers where latency requirements allow, and separately and dynamically scaling VNFs residing in the user (or data or forwarding) plane designed for execution in the cloud, control and user-plane functions as needed.
  • Operational efficiencies: Deploying VNFs as software using cloud management techniques which enables scalable automation at the click of an operator’s (or customer’s) mouse or in response to stimulus from network analytics. The ability to automate onboarding, provisioning and in-service activation of new virtualized network functions can yield significant savings.

In particular, mobile network operators can take advantage of NFV as new services are introduced. Enhanced messaging services, among others, are an example of new capabilities that would apply these virtualized solutions. Some operators started deploying elements of NFV in 2013 with an expectation that many service areas could be virtualized in the next decade.

Friday, November 21, 2014

Higher Demand for Chromebooks and Low-Cost PCs

According to the latest worldwide market study by DisplaySearch, in the third quarter of this year, the global notebook personal computer (PC) market grew 10 percent year-over-year, to reach 49.4 million units. Once again, market demand increased for lower-cost devices.

That said, global shipments of media tablets, by comparison, actually fell by 8 percent. Given the choice between a full-featured low-cost notebook PC and an equivalent tablet, more people will buy based upon their use case -- rather than being influenced more by price and value.

Notebook PC growth was primarily driven by the developed regions of North America and Western Europe, which increased year-over-year shipments by more than 20 percent in the third quarter.

"The slump in tablet PC demand contributed to the growth in notebook PCs," said Hisakazu Torii, vice president of smart application research at DisplaySearch, now part of IHS.

Back-to-school sales were quite good, and this growth was supported by low-priced, Microsoft Windows-based notebook PCs and Google Chromebooks.

Chromebook sales were especially strong in the United States -- particularly in the commercial and education markets, due to easier IT management and volume-discount offers.

Chromebooks are forecast to reach 5 percent (8 million units) of total global notebook PC shipments by the end of this year. However, if 2015 demand reaches the 20 million units planned by PC brands and OEMs, it is possible that the Chromebook share would rise to 12 percent.

"Early Black Friday newspaper advertisements show some Windows-based notebook PCs and Chromebooks priced under $200," Torii said.

The top five notebook PC brands collectively grew 23 percent in the third quarter of 2014, reaching 69 percent of total notebook units shipped. With strong sales in North America and Western Europe, the Lenovo Group and HP continued to lead the market, with shares of 20 percent and 19 percent, respectively.

Lenovo Group led unit share in Western Europe and China, while HP took the leading position in North America, Eastern Europe and rest of the world. Year-over-year shipments of Apple’s iPad declined 13 percent, although Apple still ranked fifth globally, mainly due to increasing market share in North America.

Thursday, November 20, 2014

Explore the Top Upcoming Technology Disruptors

Technology can cut either way. It can be a differentiating factor that helps your business be more successful or it can be something that contributes to your company's downfall -- particularly, if competitors are first-to-market and apply it for a significant competitive edge.

Technology adoption and usage can help to increase efficiency, reduce wastage, advance productivity, improve product development, enhance customer service and accelerate time-to-market.

Technology is at the heart of many business success stories. Besides, the role of the Chief Information Officer (CIO) can become one of the key positions within a company, but it is also now one of the most challenging -- due to the raised expectations.

ABI Research has compiled an analysis that collects input from the whole ABI analyst community and presents a broad perspective of which technologies should be on a CIO's planning agenda.

The top technologies were broken down in to the following lists:

Top Five Technologies Overall:

  • Device-to-Device Communications (D2D)
  • Machine Learning
  • Cellular RAN Virtualization
  • Bluetooth Low Energy/Bluetooth Smart
  • LTE-Advanced

Most Potential Impact:

  • Device-to-Device Communications (D2D)
  • WiGig
  • Energy Storage for Portable Devices
  • Graphene
  • Machine Learning

Time to Disruption:

  • Cellular RAN Virtualization
  • ISW and Unified SON
  • Bluetooth Low Energy/Bluetooth Smart
  • In-vehicle Smartphone Standards
  • Machine Learning

Highest Probability:

  • Cellular RAN Virtualization
  • Bluetooth Low Energy/Bluetooth Smart
  • Machine Learning
  • LTE-Advanced
  • Device-to-Device Communications (D2D)

"The digitization of our world and the democratization of the Internet means that innovation will increasingly be digital and will come from unexpected quarters. The ability to have a huge net to capture this innovation is not only key to surviving the tsunami of evolution but it is also paramount for companies to be armed with enough knowledge to understand which innovations will matter," said Stuart Carlaw, chief research officer at ABI Research.

Wednesday, November 19, 2014

Outlook for Over-the-Top Mobile Communication Apps

There's been a growing concern about the impact of Over-the-Top (OTT) mobile communication software applications -- such as WhatsApp, LINE, WeChat and Skype -- on the Mobile Network Operator (MNO) business model. The negative threat is somewhat obvious, but there is also the potential for market collaboration and business partnerships.

While the majority of OTT communications providers concentrate on growing their community and exploring new business models, this market development also provides an opportunity for MNOs to play an integral role -- and thereby re-emerge as a positive force in the monetization process of OTT communications.

Findings from a new worldwide survey show MNOs are dramatically changing their strategy and plans to partner with the OTT players. The annual survey by Mobilesquared, revealed that by the end of 2014, 55 percent of MNOs have already formed or expect to form a relationship with an OTT partner compared to only 36 percent in 2013.

Most notable, the number of MNOs yet to identify any benefits from OTT partnerships plummeted from 36 to just 4 percent during the last twelve months. Clearly, they're moving beyond the prior denial of this advancing trend, and now embracing the apparent market disruption.

Eighty percent of MNOs currently cite their most pressing concern as declining revenue on traditional voice calls and P2P (Person-to-Person) messages, directly attributed to the increasing pressure of OTT services.

This year, 40 percent of mobile operators said that OTT services attributed to a decrease in revenues over the last 12 months with 33 percent of MNOs seeing up to a 10 percent revenue decline in the period.

With only 21 percent of respondents citing a similar impact in 2013, it is clear that the impact of OTTs on MNO revenues is growing. Mobilesquared forecasts that the global mobile network operator opportunity for OTT communication will be worth $42.9 billion in 2018.

"OTT communications has always been about growing a multi-million user base and market capitalization. But we’re now seeing the maturation of the OTT communications space and the need to monetize the user base. The quickest route to monetization for the majority of OTT communications providers will be to seek out partnerships with mobile operators to capitalize on their end-user relationship and billing functionality," said Nick Lane, chief insight analyst at Mobilesquared.

Survey results from previous years showed that imposing surcharges, charging for data or blocking access to OTT services are no longer seen as viable business models to help MNOs stand up to financial pressure from OTTs.

The number of MNOs offering their own messaging applications fell from 43 percent in 2013 to just 5 percent in 2014. A further 10 percent of MNOs blocked OTT services in 2012, but now this practice is not done at all.

Moreover, 71 percent MNOs believe an increase in customer loyalty is the predominant benefit of forming an OTT business partnership. Consequently, 45 percent of those surveyed saw opportunities to monetize OTT services through the inclusion of data as part of the standard data bundle.

While MNOs are now actively looking to build partnerships with OTTs, many still have questions surrounding the logistics and literal implementation. As an example, 64 percent of mobile operators said that business reasons were the primary motive for not forging a partnership with an OTT provider, followed by infrastructure complexities (26 percent) and regulatory issues (23 percent).

Not only are there challenges, according to Mobilesquared assessment, but mobile operators have also expressed their concerns of entering a collaborative model with an OTT provider. Almost one-third of mobile operators said that they would have no idea what the contractual agreements would look like.

Tuesday, November 18, 2014

Mobile Service Providers Evolve their Business Model

With profit margins under pressure, most telecom service providers are already considering dramatic cost reduction plans in the new year, such as the immediate adoption of open source software and the piloting of SDN or NFV projects.

In particular, mobile service providers are most at risk. This is why they are in the process of evolving their business model -- primarily, in response to the latest global trends in mobile personal communications.

Juniper Research has found that with combined annual mobile network operator expenditures now in excess of $800 billion, several leading service providers face the possibility of costs exceeding revenues by the end of the decade without remedial action.

According to their latest worldwide market study, a combination of flat revenues from traditional services combined with surging data traffic costs could ultimately threaten the viability of all mobile network operations.

In an analysis of 12 international mobile network operators, Juniper found that profit margins had fallen by an average of 6.4 percent over a three year period, with 5 of those surveyed experiencing decreasing margins in every year throughout the period.

Furthermore, a number of major mobile network operators now have single figure margins -- with costs currently increasing at 1.5-2 percent per year, the situation is unsustainable in the longer term.


Meanwhile, the Juniper study found that without more widespread network optimization and the implementation of other cost controls, the situation could become critical in a number of developing markets.

Juniper believes that with surging mobile Internet adoption in the Indian Subcontinent, regional operators could see data costs outstrip data revenues by $45 billion within 3 years unless networks are fully optimized.

However, they also pointed to a number of success stories, particularly in the U.S. market, where service providers such as Verizon and AT&T have bucked the trend in falling margins by introducing shared data plans.

It observed that Verizon had seen wireless revenues increasing by more than 7 percent despite operating in a saturated market, while AT&T now had more than 14 million households on shared plans.

That said, service providers need a comprehensive strategy to adapt their current business model to the realities of the disruptive changes in the marketplace. Pricing plans aren't a long-term solution to the apparent challenges.

"Given the threat from Over-The-Top (OTT) VoIP and messaging services to core service revenue, the U.S. emphasis on focusing the value on the data element is absolutely the right way to go. This is particularly true within an increasingly 4G environment," said Dr. Windsor Holden, head of consultancy and forecasting at Juniper Research.

Monday, November 17, 2014

Connected Care Users to Reach 13.7 Million in Europe

One of the largest emerging applications for the Internet of Things is healthcare related technologies that enable remote monitoring and diagnostics. According to the latest market study by Berg Insight, around 4.7 million people in Europe were using connected care solutions at the end of 2013.

The term connected care refers to users of traditional telecare, next-generation telecare and telehealth solutions within the European countries where the study was conducted.

Until 2019, Berg Insight forecasts that the number of connected care users will grow at a compound annual growth rate (CAGR) of 19.2 percent to reach 13.7 million.

Traditional telecare is currently the largest and most mature of the three market segments. The next-generation telecare and telehealth market segments are in a more nascent stage but are entering a strong growth phase that is expected to last for many years to come.

The European connected care industry is facing major changes that will reshape the competitive environment for solution vendors and service providers during the coming years.

One of the main developments is the digitalization of telephone networks that already has started in several European countries.

Massive replacements of telecare equipment will be needed due to that analogue devices no longer function reliably when the public switched telephone network (PSTN) infrastructure is modernized.

According to the Berg assessment, the market is opening up to new types of solutions that can advance the delivery of care to the next level.

This includes next-generation telecare systems that support functionalities such as remote visits and video communication. All of these new services will be delivered via the public internet, and broadband access may be a requirement.

"There is a strong need for solutions that enable social care and healthcare services to be delivered more cost-efficiently without compromising the quality of care," said Lars Kurkinen, senior analyst at Berg Insight.

Berg believes that this need and demand will only grow stronger in the future as the European population structure ages and the prevalence of chronic diseases increases.

Friday, November 14, 2014

How Mobile is Driving First-time eCommerce Usage

Over the past 5 years, the scale of mobile commerce in its various forms has grown at a remarkable rate. As more mobile computing devices -- such as smartphones and media tablets -- became available for browsing online content, the mobile commerce marketplace thrived.

In 2001, global business-to-consumer eCommerce sales were around $63 billion anually. By 2011, sales had increased nearly 12 times to $745 billion. In 2012, these sales increased by a further 28 percent to reach $952 billion, before increasing by a further 23 percent in 2013 to approach $1.2 trillion.

According to the latest worldwide market study by Juniper Research, just over 2 billion mobile phone or tablet users will make some form of mobile commerce transaction by the end of 2017 -- that's up from 1.6 billion in 2014.

Juniper believes that mobile consumption of services such as banking, money transfer and purchases of goods and services was surging as consumers were either migrating from desktop usage or becoming first-time eCommerce users through their smartphones or tablets.

They discovered that in a number of developed markets around the world, mobile devices would account for over half of online transactions within five years.


Juniper also observed that while contact-less payments had yet to gain traction outside Japan and South Korea, Apple Pay was expected to provide NFC with renewed momentum.

They say the mobile channel will offer consumers in emerging markets first-time financial service access through the provision of mobile wallets, also by enabling services beyond payments -- such as savings and micro-insurance.

"Brands and retailers should certainly seek to integrate their offerings with players such as Facebook and FourSquare. Integration offers reach, allied to the potential to target specific user demographics," said Dr. Windsor Holden, head of consultancy and forecasting at Juniper Research.

In order for telecom companies to participate in the new growth, Juniper has recommended the integration of mobile network operator billing capabilities with websites to monetize digital content among a wider mobile device user base.

Other key findings from the study include:

  • Consumers concerns around transaction security remain the primary inhibitor on service adoption.
  • While growth in the number of mobile digital content purchasers in developing markets is relatively low, the value of customers is increasing markedly as they transition from ringtone purchase to rich media content typically monetized through in-app purchase.