Digital Lifescapes

Few U.S. consumers are willing to pay a modest monthly fee to use social networking sites, according to "Digital Media Habits II" -- a market study by Parks Associates. This online survey of Internet users found 72 percent of social networking users would stop using a site if required to pay a $2 monthly fee. Likewise, nearly 40 percent would stop if a site contains too many advertisements. These findings clearly present a puzzling challenge to the companies competing in the social networking space. Parks Associates found 80 percent of broadband users ages 18-25 use these sites on a monthly basis; however, monetizing these users is proving to be difficult, with even category leaders such as MySpace struggling to create significant profits. "Having a big base of loyal users is not enough," said John Barrett, director of research at Parks Associates. To really succeed, social networking sites must consistently deliver to advertisers a desirable consumer demographic --

Broadband Service Providers (BSPs) must do more to differentiate themselves in what is becoming an increasingly commoditized market, or risk becoming simple utilities, according to a report just released by Strategy Analytics. "The French market has followed a rather predictable evolutionary path," says Ben Piper, Director of the Strategy Analytics Broadband Network Strategies Service. "As the market reaches commoditization, operators are faced with a critical decision -- provide true innovation through services, branding or overall customer experience in their offerings, or risk getting squeezed out of the market." France's broadband market transformed itself from one of the most monopolistic into one of the most competitive in a period of just six years. As the government opened this market to non-incumbents, fierce competition ensued. France now supports a multitude of BSPs, however the top three control roughly 85 percent of the market. While the French broa

According to a new market study by Infonetics Research, by 2011 overall 3G data service adoption across small, medium, and large organizations in North America will reach 17 percent, and adoption of mobile WiMAX will reach 11 percent. The study entitled "User Plans for Wireless LANs and Mobility" also shows that wireless LANs will be adopted by 73 percent of North American organizations by 2011, and wireless mesh by 11 percent. "Mobility is increasingly viewed by user organizations as a fundamental part of their communications strategy and the wireless networks or services they use are an intrinsic part of the overall network," said Richard Webb, wireless analyst at Infonetics Research, and lead author of the report. "Wireless is no longer seen as a separate overlaid and unmanaged wild frontier." "The breadth and penetration of wireless LAN and mobile data applications grows between now and 2009," added Webb. "Notable amongst these are video

The latest Strategy Analytics data from its ProductTRAX program projected that nearly 1.1 million units were delivered to U.S. consumers through the combined AT&T and Apple outlets during Q3, totaling 1.325 million units since the iPhone was launched in late Q2. "The iPhone has become AT&T's top selling device, commanding some 13 percent of AT&T's overall handset sales, and the 4th top selling handset in the U.S. market,” according to Barry Gilbert, VP of the Strategy Analytics. "Although the iPhone hasn't had an expansionary impact in the market, the iPhone has quickly assumed a leading market share position and raised the ante for smart devices," according to Mr. Gilbert. "The sales trajectory we are observing with the iPhone could make it the top selling device in the U.S. over the next 1-2 quarters." Currently, the top selling handset in the U.S. continues to be Motorola's RAZR V3, however, this appears to be losing momentum as n

While next-generation networks (NGNs) promise rich applications that will eventually offset the decline in voice revenue, most carriers must support IP as well as their legacy networking technologies. Among service providers, business success is often tied to how fast market strategies can be changed to meet competitive pressures and take advantage of new opportunities, according to a new market study by Insight Research. To capture markets and create critical mass, rapid creation and execution of new services has become a necessity. Given the way applications are currently deployed and the complexity of their interaction in continuously evolving networks, new services deployments are difficult, costly, and limit the service provider's ability to drive ARPU and reduce churn. Service providers continue to look for new cost effective means for efficient and effective application-to-network connectivity. As a result, hundreds of millions of dollars will be spent by service provid

Digital Lifescapes will be back in one week, with new insights and commentary on the global networked economy.

Rodney Dangerfield still gets no respect -- that's no longer true for the wireless enterprise subscriber. Why? ABI Research survey results have confirmed that North American business customers spend 23 percent more on mobile services than consumers do. But until now, mobile productivity application development has lagged behind mobile entertainment services development, limiting the opportunities for serving the business customer. That is now starting to change and by 2012 -- driven by mobile productivity applications -- data services will account for more than one third of North American business mobile services spending. Such applications increase employee productivity and have demonstrable ROI, and as a result can command high ARPUs. Principal analyst Dan Shey says, "Mobile operators have served all customers very well with mobile entertainment including ring-tones, games and video downloads. But what are the opportunities for all value chain players to serve business custo

Wireless broadband market penetration expectations are on the rise, once again. Mobile broadband will generate more than $400 billion in service revenues in 2012, according to a new strategic report from Informa Telecoms & Media. "Mobile broadband will represent close to half of total mobile service revenues in 2012, making it one of the largest and most strategically important segments of the mobile industry," says Mike Roberts, Principal Analyst at Informa Telecoms & Media and lead author of the Future Mobile Broadband report. The report provides in-depth analysis and forecasts on all major mobile broadband technologies including HSDPA, HSUPA, HSPA+, LTE, EV-DO, EV-DO Revision A, EV-DO Revision B, UMB, WiMAX, TD-SCDMA and TD-CDMA. It includes detailed case studies of leading mobile broadband operators, infrastructure vendors and device suppliers. Detailed subscriber and device forecasts in the report find that HSPA will be the leading mobile broadband system in 2012

Worldwide shipments of video portable multimedia players (PMPs) will grow at an annualized rate of 30 percent over the next five years, reaching 132 million units in 2011, according to Parks Associates. MP3 player manufacturers will drive growth through their desire to add video capability to the portable audio player platform and capitalize on the healthy growth of the broadband video market worldwide. "The video PMP market will enter a strong growth period within the next five years," said Harry Wang, senior analyst at Parks Associates. "Video capability fuels the upgrade demand from existing device owners, and more content -- especially free and short online video clips -- gives consumers the incentive to upgrade." In North America, the percentage of flash-based video PMPs will rise from 15 percent in 2006 to 77 percent in 2011. Elsewhere, flash-based video PMPs already account for the majority of the market and will continue to expand their lead. "Flash mem

Change used to move relatively slowly in the entertainment business. That was, until the whole notion of a mass-market for television became null and void. First it was music production and distribution and now it's video. In this rapidly evolving market, consumers are being afforded more choice and control when it comes to content. Whether it's PVRs, User Generated Content, or TV shows online, the market has fundamentally started the process of unbundling television or video entertainment, and this redistribution of control will likely come to dominate the overall consumer landscape for years to come, according to an In-Stat market study. In addition, as evidenced by an In-Stat survey of U.S. consumers, when it comes to online video, despite a stratification by age, these trends appear more endemic than unique to the under 25 market segment. Respondents who watch online video were equally upbeat on the future of digital media, in many cases expecting these emerging forms of en

Video: BT's Director of Portfolio Innovation describes the unknown.

Consumers will spend more than $100 billion worldwide on flat panel TVs (FPTV) during 2007, according to the latest market study. Strategy Analytics predicts that sales of flat panel LCD and plasma TVs will reach 73.7 million units worldwide, generating retail revenues of $104.9 billion, an increase of 17 percent. HDTV is one of the major growth drivers -- 71 percent of FPTV sales are now HD-ready. Plasma's share continues to slip, from 17.1 percent by unit volume in 2006 to 15.8 percent this year. Ownership of FPTVs has now reached 41 percent of households in the U.S. and 29 percent in Europe. This latest report predicts that annual sales of FPTVs will reach 180 million units by 2012, but that revenues will peak in 2009 at $130.4 billion before going into decline. "Flat panels have transformed the TV market over last five years," comments Peter King, Director, Connected Home Devices. "But we expect that market revenues will see only two more years of growth. New fea

Most people's relationship with their pay-TV service starts and ends with the remote-control device associated with the box that connects to their television set. Clearly, it's a key part of the overall user experience. As revenue from traditional television set-top box (STB) sales declines along with demand in the period 2008 to 2012, STB vendors will initially rely on firmer markets for DBS (Digital Broadcast Satellite), IPTV (Internet Protocol Television), and DTT (Digital Terrestrial Television) devices. However, according to a market study from ABI Research, by the end of the decade even those sectors will be under pressure from alternative technologies being introduced to facilitate the connected home, and vendors will have to add new features and functions in order to revive flagging shipment numbers. "The development of two-way digital cable-ready TVs, residential gateways, media centers, and even video capabilities on gaming systems will put the STB status at risk

If you're still wondering why the impact from the shrinking broadcast television audience threatens the advertising industry's status quo, then perhaps the following research may help. Apparently, consumer attention is increasingly being directed elsewhere. ComScore released the first comprehensive study of worldwide search engine activity. comScore qSearch 2.0 offers a panoramic worldwide view of online search activity, providing granular, in-depth analysis of the search universe reported from the top 50 worldwide Internet properties where search activity is observed. The study found that more than 750 million people age 15 and older -- or 95 percent of the worldwide Internet audience -- conducted 61 billion searches worldwide in August, an average of more than 80 searches per searcher. The Asia-Pacific region, which includes large markets such as China, Japan and India, saw 258 million unique searchers conduct 20.3 billion searches. Europe reported the second-most searchers (

Most wireless communications industry analysts report that the full potential of mobile TV services has not been realized. The apparent lack of mainstream consumer interest is the most mentioned challenge that's been reported in market surveys. As recently as 2001, some mobile communications experts were saying that mobile television might be a reality within 20 years, but would probably arrive much later because the technical problems were so difficult. Yet a few years later, according to a new market study from ABI Research, successful mobile video technologies are largely in place. As questions about business models, distribution, and content are resolved, the mobile TV industry should now develop momentum -- theoretically. ABI Research director Michael Wolf says, "Just a year ago, there was a lot of discussion in the industry about whether unicast or broadcast distribution models would prevail, and it seemed possible that unicasting would soon disappear. The new research s

Why do consumers gravitate to Web 2.0 social computing activity, and what keeps them engaged? The answer to this question is somewhat complicated, because it really depends on how you segment the market. To better understand social computing adoption, Forrester Research benchmarks consumers by their level of participation in social computing behaviors. They call this method Social Technographics. Forrester's benchmarking method takes into account current social computing technologies like blogs and social networks, but it's also flexible enough to incorporate new technologies as well. The key to their methodology is understanding how consumers approach these technologies, not just which ones they use. The six rungs on the Social Technographics ladder are: Creators: These are online consumers who publish blogs, maintain Web pages, or upload videos to sites like YouTube at least once per month. Creators, an elite group, include just 13 percent of the adult online population. Cre

According to a StrategyEye report, we are now way beyond the tipping-point for upheaval within the traditional music recording industry. In fact, the primary value proposition of a legacy record label seems to have totally capsized and sank. Apparently, the rock band "Nine Inch Nails" is the latest to announce that they will no longer use music labels to market their work. Instead they will operate as free-agents , with online digital distribution a major focus of their direct marketing efforts. The move follows the announcement by Radiohead that they will no longer operate under the control of a music label, releasing their work directly to fans, with consumers able to "set their own price" for the band's latest album entitled "In Rainbows." Visitor traffic to Radiohead's Web site is reported to have increased by eleven-fold following the announcement. Music industry analysts are now warning that many other top recording artists are likely to fol

The real-time broadcast MPEG encoder market is growing as new digital TV providers and TV channels are launched and HD content grows, according to a market study by In-Stat. There is also a large shift taking place, as the H.264 codec standard is replacing MPEG-2 as the compression technology of choice in many of the segments, the high-tech market research firm says. "The move to distribute programming in H.264 is creating a new category of product, the H.264 to MPEG-2 transcoder, which will be needed particularly by cable operators that have large installed bases of MPEG-2 set top boxes," says Michelle Abraham, In-Stat analyst. The large number of cable head-ends will require large numbers of transcoders. The In-Stat research covers the worldwide market for real-time broadcast MPEG encoders and transcoders. Worldwide unit, ASP, and revenue encoder and transcoder five-year forecasts are provided by region for eight market segments: contribution, distribution, telco, chassis,

As deployments of Telco pay-TV services accelerate around the globe, new questions are being raised about applying the legacy metric of merely measuring viewer and service subscriber counts to determine appropriate advertising fees. According to a Bloomberg News report, Verizon Communications Inc., the second-largest U.S. phone company, has been accused in a lawsuit of setting inflated prices for advertising -- by exaggerating the number of subscribers to its FiOS pay-TV service. Verizon overstates subscribers by including prospective customers, not just actual ones, advertiser Digital Art Services Inc. said in a complaint to the U.S. District Court in Manhattan. "Verizon's internal documents show, and Verizon has now admitted, that Verizon has a policy of inflating the number of its reported FiOS subscribers," Digital Art Services said in the complaint. Apparently, Verizon and other defendants in the case told Digital Art Services executives that pending customers are i

According to a recent In-Stat survey, levels of customer satisfaction with wireless carriers can clearly be drawn across age and ethnic boundaries. Older Americans are most satisfied with their wireless providers according to In-Stat's 2007 Consumer Mobility Survey. More than 70 percent of respondents aged fifty and older indicated they are "completely satisfied" or "very satisfied" with their wireless service provider. In contrast, wireless service customers in the 18-24 age range were the least satisfied, as 56 percent of this user segment responded that they were completely satisfied or very satisfied. Eight percent of this segment answered that they were "not very satisfied" or "not at all satisfied" with their wireless carrier. Caucasian wireless subscribers were most satisfied with their wireless service providers. Of the respondents in this ethnic segment, 71 percent indicated they are completely or very satisfied with their wireless p

The worldwide fixed-mobile convergence (FMC) market -- including UMA network controllers, multi-access convergence gateways, and dual mode cellular/Wi-Fi phones -- is forecast by Infonetics Research to soar to $46.3 billion in 2010. The report entitled "FMC Equipment, Phones, and Subscribers Market Outlook," says that of all the current seamless and non-seamless variations of FMC implementations, Unlicensed Mobile Access (UMA) has seen the most significant push, triggered by intense competition. The fiercest battles are coming from attackers in Denmark, France, Italy, the Netherlands, and the UK, where each incumbent service provider is trying to protect its home turf. UMA is also the quickest fix prior to any migration to IMS, the report indicates. "UMA, which was believed to have short legs just a year ago, is the predominant technology deployed today to implement seamless FMC between wireless LAN and 2G cellular networks. For those who still believe UMA will be short

Video: GSM Association describes new mobile innovation programme.

The global telecommunications industry is on the cusp of major change, and service providers are approaching critical decisions about their 4G strategies -- as mobile WiMAX (802.16e) starts to move from trials and pilots to the first real-world application deployments. As described in a new study from ABI Research, mobile operators and other telecom service providers are planning mobile WiMAX networks all over the world, mainly in the 2.5 GHz and 3.5 GHz bands. "The mobile wireless industry is in a state of major change as mobile operators decide which IP-OFDMA path they will take for their 4G networks," says principal mobile broadband analyst Philip Solis. "The new and unproven -- on a large commercial scale -- mobile WiMAX has positioned itself against the potential Goliath that LTE (Long Term Evolution) is expected to become." The research forecasts substantial numbers of WiMAX subscribers worldwide -- more than 95 million using CPE devices by 2012, and almost 2

Dynamic Spectrum Access is a novel approach that uses new radio technology within a specially-designed regulatory framework to allow spectrum to be shared efficiently, moving away from fixed allocations to a more flexible and dynamic arrangement. A key component will be software radio and its derivatives, collectively known as smart or cognitive radio. These radio technologies use several techniques to change to different radio frequencies, adjust power levels, and change waveforms, and are able to detect other users of the spectrum to avoid interference. "Spectrum, especially in the UHF band, is attractive to mobile operators for mobile TV, voice and high-speed data services," says ABI Research analyst Ian Cox. "It is also used by terrestrial TV broadcasters, the military, and security services, and they all want more of it. Regulators, over the years, have boxed themselves into a corner by allocating it exclusively for individual applications. This can now begin to cha

Internet advertising has again buoyed the UK advertising industry with above-expectation 41.3 percent year on year growth in the first half of 2007. This takes the sector to a half-year high of 1.3 billion pounds -- compared to 917.2 million pounds just a year ago -- lifting online advertising's market share significantly, to 14.7 percent. The results of the biannual internet advertising spend study commissioned by the Internet Advertising Bureau (IAB), the UK online advertising trade body, in association with PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC), point to online advertising expenditure reaching a potential new high of 2.75 billion pounds by the end of 2007. The total UK advertising market grew by 3.1 percent during the first half of the year to 9.1 billion pounds. However without the online contribution, UK media expenditure would have fallen by 1.9 percent (or 147 million pounds). Once again the internet has propped up the UK advertising e

The number of U.S. households with direct connections into high-speed fiber optic networks has surpassed the two million mark, according to a study released by the Fiber-to-the-Home (FTTH) Council and the Telecommunications Industry Association (TIA). The survey also shows that the rate of growth in fiber to the home connections continues to increase as more Americans look to next-generation networks for faster internet and more robust video services. According to the study, 2.14 million homes -- or approximately 2 percent of the households in the country -- are now connected to the internet via an end-to-end fiber optic service. This compares to 1.01 million connections as of September 2006 (less than one percent market penetration), meaning that the annual growth rate has increased to 112 percent from the 99 percent that was measured last March. The study also shows fiber to the home networks now passing 9.55 million U.S. homes, up from 6.1 million a year ago. Moreover, the number of

One major factor that has had an impact upon the ability of Asian vendors to address 2G and 3G mobile phone handset markets has been their lack of significant intellectual property (IP) portfolios, according to a recent ABI Research market study. As a result, they have been subject to average royalty rates far in excess of those paid by their IP-enabled competitors -- such as Nokia, Motorola, and Sony Ericsson. To avoid repeating their experiences in the 3G market, Asian vendors such as Samsung, Toshiba, Matsushita, Sony, NEC, and Mitsubishi, along with NTT, have captured significant portions of the IP relevant to the 4G technology space. ABI Research director Stuart Carlaw says, "In terms of patent filing volume relating to core 4G technologies, eight of the top 15 companies are Asian vendors. More important, Samsung, and Matsushita are the most active by far." ABI also believes that patent holding alone does not necessarily dictate a strong position. This must be coupled w

Worldwide sales of semiconductors rose in August, growing to $21.5 billion, an increase of 4.9 percent over August 2006, when sales were $20.5 billion, according to the Semiconductor Industry Association (SIA). Sales of NAND flash memory devices led the growth as supplies tightened and prices firmed. NAND flash sales were up by 48 percent compared to August 2006 and up by 19 percent from July of this year. Credit Suisse and the Gartner Group have revised upward their forecasts for growth in unit sales of personal computers from 11 percent to 13 percent for 2007. PC unit growth is proving to be very solid in 2007. PCs account for approximately 40 percent of all semiconductor sales and are growing most rapidly in emerging markets, where lower-cost PCs with lower silicon content have been selling well. Unit sales of cell phones are also running well ahead of our earlier forecast of 10 percent growth, and SIA expects that total unit sales will be up by 15 percent in 2007. Increased afforda

According to Informa Telecoms & Media, the growing acceptance of SIP by mobile operators and device vendors means that mobile phone users are set to approach 435 million by 2012. Sales of mobile phones with active SIP functionality will reach 275 million units in 2007, an increase from 0.4 percent of total device sales in 2006, to 19 percent by 2012 -- with a real inflection taking place between 2010 and 2011. Within the mobile handset space, SIP is essentially split into two main variants of IETF SIP, also known as Naked SIP, and 3GPP SIP, which is also called IMS SIP. IETF SIP is widely used in both fixed and mobile telephony and thus is an obvious choice to use as the basis of a convergence platform. In the mobile space, IETF SIP is considered to be an essential component for enabling access to open internet services including wireless VoIP. "The lack of control over its development and its widespread use means that many mobile network operators perceive IETF SIP as a chall

Given the latest news regarding major vendor downgrades within the telecom networking sector -- Alcatel-Lucent is top of mind for most industry analysts -- now is a good time to reflect upon the results of a Forrester Research study from earlier this year. According to Forrester's assessment, all vendors must now realize that the times of technology push are over -- and there's a compelling need to develop new strategies that help them engage the wider mix of customer stakeholders. This new standard, which Forrester calls stakeholder centricity , must drive vendor sales, marketing, and partnership strategies. Stakeholder centricity requires the unequivocal realization that IT and Telecom buyers are first and foremost looking for a solution to a business problem. Granted, highlighting this fundamental focal point is not new or profound, and yet business needs alignment -- or the lack thereof -- is still at the core of many problems this industry has yet to address in a substan