Digital Lifescapes

Due to the global economic crisis, there's been a recalibration of consumer purchasing and usage behaviors which will affect all industries -- including the normally recession-proof mobile phone services industry. Yet despite these market uncertainties, a new ABI Research study shows that even under the worst recovery scenarios, mobile services revenues will continue to grow at nearly 1.2 percent through 2014 -- a 0.5 percent loss over pre-crisis conditions. According to ABI practice director Dan Shey, "A long economic recovery places pressures on mobile operators to compete on price, particularly with undifferentiated voice services. Mobile data services allow operators to counter that pressure. However each region is different." Operators should create strategies that lead customers to maintain nice-to-have data services or encourage addition of more utilitarian ones. Economically, North America has been hit hardest. But mobile data services growth will exceed 8 percent...

The demand for more mobile network backhaul capacity will grow three fold between 2009 and 2013, according to a recent market study by In-Stat. Mobile network operators are deploying EV-DO 2000, HSPA/HSPA+, WiMAX, and LTE to meet the growing demand for high-speed mobile data. In the process, the bottleneck affect of cell site network backhaul has become more prominent. Traditionally, voice has dominated the traffic going across a mobile operator's network. With voice as the primary traffic component, an operator could meet its backhaul requirements with a couple of T-1 lines per base station. That has all changed with operators relying on data for revenue growth. "Cellular and WiMAX backhaul provides that crucial link between the mobile operator's radio access network and its core network," says Frank Dickson, In-Stat's VP of Mobile Internet research. "It does an operator no good to install a base station with 7.2 Mbps capacity if the backhaul is limited to 4...

Change is the name of the game for the entertainment industry. Don't like the new reality? Too bad, because there's more to come. Music, movies and video games are facing economic challenges due to the disruptive influences of digital distribution. "The music industry was knocked off balance by the emergence of the MP3 in the late 1990s and has not recovered, and Hollywood's two core businesses, box-office receipts and DVD sales/rentals, have stopped growing," says Paul Verna, eMarketer senior analyst. While the sales of video game consoles and software titles remain relatively strong, the industry's future is shifting to digital distribution and ad-supported models. Spending on CDs and other physical sound carriers dwindled to $5.8 billion in 2008 -- down a very significant 60 percent from a peak of $14.6 billion in 1999. In 2009, the U.S. recording industry will mark 10 consecutive years of declining CD sales. U.S. sales of recorded music will drop to $5.52 ...

Futuresource Consulting is studying how consumers interact with and consume digital entertainment, whether via the TV, online or mobile. For the first wave, online surveys were carried out in the UK, France, Germany and the USA with more than 2,500 respondents -- focusing on in-home connectivity and online content consumption. "This tranche of research has provided key insights into consumer behavior across four major territories, allowing us to compare and contrast viewing habits on a country-by-country basis," says Alison Casey, Head of Global Content at Futuresource. The study shows that nearly 90 percent of Pay-TV subscribers in France who make additional payments to their provider are doing so for movie titles, and there are substantial differences between countries. German Pay-TV subscribers came out on top for making additional payments for sport and TV shows, with France (sport) and the UK (TV shows) ranking last. In the UK, Pay-TV subscribers are adopting free on-dem...

Revenues for mobile advertising (on cell phones) in the U.S. and Canada will grow from $208 million in 2009 to approximately $1.5 billion by 2013, according to the latest market study by Parks Associates. Adoption of smartphones, 3G network data plans -- or newer wireless services -- and downloadable applications will spur this growth in ad revenues, with significant increases beginning in 2010. Parks Associates estimates there were 62 million smartphone users in North America in 2008, with user penetration to reach 239 million in 2013. Parks Associates projects U.S. 3G network data plans will reach 95 percent penetration by 2013, with Canada achieving 70 percent penetration. "Mobile advertising is poised to take advantage of opportunities presented by the diffusion of 3G networks and devices such as the smartphone," said Heather Way, research analyst, Parks Associates. Advertisers will begin to incorporate the mobile format into their media campaigns as this medium matures i...

Infonetics Research released the results of the first quarter (1Q09) edition of its Cable Broadband Aggregation Hardware and Subscribers market study. "On the heels of record-high revenue in 2008 ($1.23 billion), the cable broadband hardware market held steady in the first quarter of 2009, while the cable CPE segment dropped," said Jeff Heynen, Infonetics Research's Directing Analyst for Broadband and Video. This first quarter slowdown points to a challenging 2009, in which an ailing economy and aggressive telco competition will make adding new broadband subscribers difficult. Still, compared to the overall downturn in telecom equipment spending in 1Q09, the cable broadband market was somewhat of a bright spot, and proves that cable operators remain committed to expanding their DOCSIS 3.0 footprint -- transitioning from T-CMTS and I-CMTS to M-CMTS architectures, and introducing hybrid IP/QAM video services to support tru2way and DVB-MHP services. Highlights of the market ...

Annual mobile service revenues in the Asia Pacific region will increase by more than 16 percent from 2009 to $326.37 billion by end-2013 -- with growth driven by the continuing rise in mobile subscriptions and greater usage of data services. Informa's latest market study forecasts that the region's total subscriptions base will increase by over 500 million, or almost 25 percent, from 2.03 billion at end-2009 to 2.53 billion at end-2013. "The robust growth will be spurred in particular by immense expansion in China and India, and also higher-than-expected subscription increases in developing markets such as Indonesia, the Philippines and Vietnam," said Nicole McCormick, senior analyst at Informa Telecoms & Media. Prepaid connections will continue to be the primary tariff option with the number of prepaid users rising from 1.52 billion in 2009 to 1.97 billion by 2013, accounting for approximately 90 percent of total net additions. As a result, prepaid penetration in...

Video is a high growth market segment. Live broadcast video is poised for significant growth in 2009, according to the latest market study by In-Stat. While this service is more established than in-flight broadband, usage revenues are still anticipated to nearly double in 2009 to reach almost a quarter of a billion dollars, nearly five times the size of the in-flight broadband market. However, the compelling demand for Wi-Fi connectivity among airline passengers drives higher growth for in-flight broadband. By 2011, in-flight broadband service revenue will exceed that of direct video broadcast, with in-flight broadband revenues of $761 million. "The airline industry is desperately trying to better monetize its cabins," according to Frank Dickson, In-Stat Vice President of Research. "Direct video broadcast services and in-flight broadband services are two compelling ways that provide passengers with a better customer experience while allowing the airline industry to add i...

eMarketer posed the question, what's the best way to generate sales online? While the answer may vary depending on the size of your budget, a Forbes study says marketers of all sizes should start with search. Forty-eight percent of marketers overall said that search engine optimization (SEO) was the "best method" for generating conversions online. More than one-half of marketers with budgets over $1 million agreed. The next most effective conversion tactic for smaller marketers was e-mail and e-newsletters, followed by pay-per-click and search ads, behavioral targeting and page sponsorships. For larger marketers, the list of effective online tactics was nearly the same, except search and e-mail were flipped. Pay-per-impression ads were also more effective for larger marketers. To build, maintain or change brand perceptions required different tactics, however. For both small- and large-budget marketers, site or page sponsorship and SEO were considered the most effective wa...

Worldwide PC shipments fell 6.8 percent in the first quarter of 2009 (1Q09), about 1.4 percent better than expected but still the largest decrease since the third quarter of 2001, according to the latest market study by IDC. Although volume declined less than expected -- thanks to some positive activity in the latter part of the quarter -- the Commercial sector and key macroeconomics indicators remain weak. The growth of Mini Notebook PCs is playing a dramatic role in the market. Mini Notebook PC shipments of 5.7 million in 1Q09 were ahead of expectations, but contributed to a decline of 3.1 million traditional notebooks from a year ago. The impact on shipment value was dramatic, with Mini Notebook PCs contributing $2.2 billion in the first quarter of 2009 while the value of traditional notebook shipments declined by $8.4 billion from a year ago. Mini Notebook pricing is expected to rise with more robust models, and shipment growth is expected to slow with the release of low-cost, thin...

The worldwide mobile phone market shipped 35 million fewer units than it did during the same period in 2008, and all indications point to that trend continuing throughout 2009. The mobile phone industry has long been characterized by its seasonal trends, where the first quarter always delivers a sequential decline after a busy holiday season. However, the drop in this first quarter was especially sharp, according to ABI Research practice director Kevin Burden. "The 255.6 million handsets shipped represented a 20 percent decline from Q4 2008, which was already a down quarter, and a nearly 12 percent decline from Q1 2008." Shipment reductions are a new reality for the mobile phone market. "The industry and consumers have gone into protection mode," says Burden. "Protecting profitability has led handset manufacturers to produce less and to operators and retail outlets holding smaller inventories." Consumers are also realizing that many of the features they de...

comScore released a quarterly review of the U. S. prepaid wireless industry based on online visitation and online search referral activity to six leading prepaid wireless sites. The study showed strong gains in online activity as consumers increasingly use keyword searches t0 turn to cost-effective wireless service alternatives during the current economic downturn. The combined visitation to these sites grew 37 percent versus year ago to nearly 8 million visitors, representing more than 4 percent of the total U.S. Internet audience. Growth in the category was driven primarily by MyCricket.com (up 107 percent) and Boostmobile.com (up 105 percent), both of which more than doubled in visitation versus year ago. MetroPCS.com and Net10.com also experienced strong gains, growing 63 percent and 37 percent, respectively. Although the marketing messages of most prepaid wireless providers target the youth market, prepaid wireless site visitation data suggest considerable interest in the plans am...

According to the latest market study by MRG, 2008 IPTV subscribers reached 1 million over its last forecast in late 2008, or 21.3 million, resulting in projected subscriber growth of 26.9 million in 2009 to over 81 million in 2013. Systems vendor combined CapEx revenue plus service revenue will grow from $9.7 billion in 2009 to $25.6 billion in 2013. Their new IPTV forecast for 2009-2013 is based on very detailed semi-annual analysis that MRG does on individual Service Providers and on a country-by-country basis -- including six IPTV CapEx products broken into 4 regions. "The relatively strong market in 2008 caused CapEx transactions to flourish through the end of 2008," says Jose Alvear, MRG Analyst. That anticipatory wave of orders kept vendor pipelines full all the way through 2008, but in Q1/2009, many IPTV vendors reported single-digit reduction in revenues, which is reflected in our flattened 2009 forecast. One indicator that new subscriptions will remain strong is the ...

The range of connected consumer electronics devices delivering over-the-top (OTT) video into the living room is growing. Device types include digital media adapters (DMAs), pay-TV set top boxes, Blu-ray player or recorders, HDTVs and media-center PCs. However, networked video game consoles are currently the most utilized devices for bringing web video to the TV -- and will remain so through 2013. By 2013, over 10.7 million consoles will be used as Web-to-TV mediation devices in the U.S., according the the latest In-Stat market study. While still at the early adoption stages, the impact of bringing web video to the TV will bring both opportunity and threats to a range of companies in the traditional electronics and TV markets. By 2013, the revenue from Web-to-TV streaming services will grow to $2.9 billion. "Currently Web video is largely additive to traditional TV revenue streams," says Keith Nissen, In-Stat analyst. "However, ultimately web video to the TV will force a ...

eMarketer reports that a few short years ago, the term "online video" had a different meaning. Clips were downloaded very slowly, and had to be viewed in tiny windows. Sound and graphics were primitive. Clearly, it wasn't a popular media. But, then came YouTube in the U.S., Dailymotion in Europe and Tudou in China -- video-sharing sites that all had three basic elements in common: Flash Player technology that enabled instant viewing in the browser, without downloading. Upload capability that made file-sharing with friends, as well as viewers around the world, quick and easy. Embedding code that allowed users to post video clips on their Web pages and blogs. Suddenly video was an open, consumer-driven platform, with virtually no cost of entry. As a result, online video moved from niche to mainstream, and in the process became one of the fastest-growing media platforms in history. According to The Global Web Index from Trendstream, with research conducted by Lightspeed Rese...

comScore, Inc. reported that the number of people who sought local information on a mobile device grew 51 percent from March 2008 to March 2009. The mobile browser is the leading access method for seeking local information, with 20.7 million users in March 2009, up 34 percent versus year ago. Moreover, the strongest growth in the category is coming from downloaded applications, which grew 83 percent versus year ago, followed by SMS at 72 percent. However, despite the attention mobile applications have received from developers, carriers and device OEMs, they remain the least popular access mode for mobile access of local information, with 11.3 million users in March. A marginally more often used channel for obtaining local information is SMS, with 11.7 million users, and an impressive 72-percent growth rate. Overwhelmingly, though, the preferred mode to access local content remains the mobile browser. "Given the explosion in application stores and associated marketing efforts, alon...

A consumer survey conducted by ABI Research has found that while most owners of home networks find their equipment works reasonably well, they would be willing to upgrade -- if that resulted in easier troubleshooting. The conclusion: there is an opportunity for home network equipment vendors if they can automate some of the commonest diagnostic and configuration tasks. Meaning, just in case you have any doubt, the digital home device usability issue is still a barrier to exploring new applications adoption. According to industry analyst Michael Inouye, "Although nearly 30 percent of the 1007 respondents to the U.S. consumer survey reported some initial difficulties in setting up their equipment, only 11 percent actually returned products as being too complex." Most of the problems occurred with wireless setup, suggesting that vendors have an opportunity to make wireless network setup and security a much easier process through software and hardware solutions. More than half of...

Shipments of set-top boxes (STBs) are expected to peak this year, at least in mature markets, and then commence a gradual decline. However, the analog TV shut-offs in countries around the world, combined with the strong uptake of high-definition (HD) TV sets, mean that HD STBs will form a growing part of the total market. HD STBs are expected to account for about 30 percent of all STB shipments as soon as 2010. This is accompanied by a progressive movement from MPEG-2 to MPEG-4 for content delivery. According to ABI Research industry analyst Michael Inouye, "Closely related to MPEG-4 is a growing affinity for HD boxes over SD. As more HDTVs find their way into homes, the demand for HD content grows in kind. Anticipating this demand some countries and operators have elected to support the more efficient standard up front or to begin deployments of upgraded CPE." The price points of boxes are converging; MPEG-4 and in some cases HD are getting sufficiently inexpensive that some...

Infonetics Research released its Service Delivery Platform (SDP) Software and Integration Services report, which tracks fixed-line and mobile SDP software and integration services. "While the service delivery platform market has not been immune to the current economic climate, operators continue to view SDPs as key investments to ensure continued growth by streamlining how they create and deliver new services," said Shira Levine, Infonetics Research's Directing Analyst. The primary impact of the economy on the SDP market is a more measured and incremental approach to investments, with large-scale multi-year projects being replaced by more focused solutions with shorter implementation intervals. Even so, the SDP market is much less affected by current economic conditions than other communications sectors. Highlights from the Infonetics market study include: - Worldwide sales of service delivery platform software and integration services are expected to double between 2008 ...

Demand for PC-TV tuners has fallen off from the 2008 levels due to the worldwide economic recession, according to the latest study by In-Stat. Perhaps broadcast signal reception quality is also still an issue -- that was my prior personal experience with analog tuners. The market also faces fundamental challenges, including slow consumer demand, increased competition from online television and other programming sources, and lower prices due to a shift from hybrid analog/digital tuners to digital-only tuners. One hopeful development is that Microsoft's Windows 7 and the new version of Media Center will apparently include better connectivity solutions for PC-TV Tuners. "Opportunities for growth will be for hybrid analog/digital tuner manufacturers to increase share by lowering prices, or for new entrants to leapfrog the analog and hybrid segments by aggressively targeting the emerging digital-only segments, albeit with lower margins," says Gerry Kaufhold, In-Stat analyst. I...

According to a joint study by Econsultancy and search engine optimization (SEO) firm Guava, online marketers around the globe -- but particularly in the UK -- are increasingly turning to search engine marketing practices for growth. eMarketer reports that fifty-five percent of respondents said they planned to raise spending on SEO, and 45 percent said the same of paid search. In addition, 31 percent of SEO and 32 percent of paid search users said they intended to maintain their budgets. However, search marketers use paid search and SEO to accomplish different tasks. In 2008, marketers said that the main objectives of paid search were to capture online sales, generate sales leads, drive Website traffic and enhance the brand. Regarding objectives for SEO, most marketers said its primary purpose was to drive traffic, create leads, generate sales and brand awareness. In 2009, marketer's perceptions are in similar proportions across the board. With the global economy faltering, and mon...

The bleak market outlook in the last quarter of 2008 did not seem to deter the global growth of pay-TV services. Service operators, especially those in mature high-speed Internet economies -- many of which are in the Asia-Pacific region -- continue to strive towards providing interactive bi-directional television. According to new pay-TV market data from ABI Research, APAC will continue leading subscription growth, delivering a 37 percent CAGR (compound annual growth rate) over the next three years. Telco TV in general will grow at an estimated CAGR of 29 percent over the next three years to 47 million subscribers globally by the end of 2011. ABI Research industry analyst Serene Fong notes that, "By the end of 2008, telco TV usage continued to be concentrated in countries such as France, South Korea and Hong Kong. Massive countries such as China and India are still very much inhibited by the lack of sufficiently broad bandwidth but they are expected to be high growth markets in th...

For the first time in its history, the Telecommunications Industry Association (TIA) is projecting a 3.1 percent decline in revenue for the overall global Information and Communications Technology (ICT) market in 2009 -- due to global economic conditions. In the U.S., revenue will suffer a 5.5 percent decline in 2009. While revenue will remain weak in 2010 -- with a modest 1.2 percent increase -- the longer-term outlook is apparently brighter. Globally, TIA projects a strong rebound for the ICT industry after 2010, citing a 6.4 percent revenue growth in 2011 and a 7.9 percent increase in 2012. For the U.S., telecommunications revenue is expected to decrease by 6.4 percent in the next two years, but rebound by 14.4 percent during 2011-12. The effects of the current Stimulus Package, which carves out investment dollars for broadband, will enable growth throughout the ICT industry and beyond. "Broadband will be a driver for recovery in all areas, from healthcare IT to smart grid te...

Worldwide broadband subscriptions will reach 466 million in 2009, representing 1.1 billion discrete broadband users, according to the latest market study by Strategy Analytics. The total number of broadband subscriptions will surpass 800 million by 2013, implying a 14.6 percent CAGR. DSL continues to be the dominant access technology, accounting for nearly two-thirds of worldwide subscriptions. Fiber and WiMAX, however, continue to grow share and together will account for over 25 percent of all broadband subscriptions by 2013. The Asia Pacific region claims 41 percent of all broadband subscriptions, followed by Western Europe and then North America. North America and Western Europe likewise lead in terms of household broadband penetration. Global penetration stood at 23 percent in 2008, and will reach 44 percent by 2013. The Central and Eastern European Region (CEE) is the fastest growing market, and is expected to grow 28 percent in 2009. Global Broadband ARPUs will decline approximat...

New research from Informa Telecoms & Media shows that digital TV will make significant growth progress in Latin America over the next five years. Digital TV households will more than treble in that time -- from 12.2 million at present to 37.1 million by 2014. Informa discovered that while Brazil and Mexico now combine to account for half of the region's digital subscribers, this will drop to 45 percent in 2014 -- as other countries see their services start to take off. Adam Thomas at Informa said "While the global economic situation is bound to have some impact, Latin America's economies now appear more robust than they were in the 1990s. We therefore see a positive outlook for the region's TV sector." Major players such as Telmex and Telefonica continue to invest, which contributes to the upbeat sentiment. The Informa research found that deregulation in the telecoms sector has encouraged cable TV operators to invest in network improvements, or face the risk o...

The IP digital set top box market grew 55 percent in 2008, but apparently such high growth will not continue, according to the latest market study by In-Stat. Many telcos have already launched digital pay-TV services, so there are fewer new customer prospects. In addition, the economic climate is sapping investment in new telco TV systems. "Established telco TV providers like France Telecom, AT&T, Free, British Telecom, Deutsche Telekom, and China Telecom provided much of the subscriber growth that drives the demand for IP set top boxes," says Michelle Abraham, In-Stat analyst. In-Stat expects that this situation will continue in 2009 and 2010. However with few new deployments, unit shipments of IP set top boxes will see only slight increases in 2009 and 2010. In-Stat's market study found the following: - More than 50 percent of 2009 IP set top box unit shipments in Western Europe will have hard disk drives. - Among the key technology trends are improved power managem...