Technology | Media | Telecommunications

Tuesday, July 31, 2012

Outlook for IP Connected Devices within the Home

Connected TV penetration in North America and Western Europe will surge from just over 10 percent in 2011 to over 50 percent by 2017, according to the latest market study by ABI Research.

Blu-ray disc player penetration is expected to have a similar progression, increasing from about 25 percent in Western Europe and North America in 2011 to over 76 percent by 2017 (standalone and game consoles included).

Meanwhile, game console penetration rates by 2017 are only expected to pass 61 percent in North America and 46 percent in Western Europe -- with adoption rates significantly lower in other regions.

There are four major connected video CE devices: Connected TVs, Blu-ray players, game consoles and Smart set-top boxes (STBs).

Most CE manufacturers (notably, Samsung and LG) use a common platform for Connected TVs and Blu-ray players. Microsoft and Nintendo play only in the game console market, while Smart STB leaders Apple and Roku don’t compete in the other connected categories.

Sony is unique is its participation in game consoles (PS3), connected TVs, Blu-ray players, and Smart STBs. In the TV and Blu-ray space Samsung and LG have been the most proactive at bringing connected features -- for example, introducing new user interfaces that parallel the features first made popular by the game consoles.

The spread of connectivity is not unique to mature markets, as OEMs in China, such as Skyworth and TCL, have also reported growing shipments of connected TVs. In many regards the TV is the most natural device to access connected services and content -- there is no need, for instance, to change the video input when accessing online content.

In primary survey studies consumers have also placed the connected TV as the most desired device to receive Internet content on the main screen. Despite this growth, however, one device type will not command the market, placing greater emphasis on the overall ecosystem.

The early connectivity lead enjoyed by the game consoles will continue to wane, but this does not mean these devices will become integrated into the TV. The 8th generation of consoles will offer a boost to the industry, placating core gamers with new hardware while expanding the device’s role as the central media hub through complementary media and services.

"Game consoles will be de-throned as the most connected CE device, but they may remain the most relevant," said Michael Inouye, senior analyst at ABI Research.

Monday, July 30, 2012

Video Ads Reach 53% of the Total U.S. Population

Perhaps there will become a time where online video usage growth reaches a plateau -- but we're apparently not there yet. comScore released data showing that more than 180 million U.S. Internet users watched 33 billion online content videos in June. Video advertising reached another all-time high in June -- as 11 billion video ads were viewed.

Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in June with 154.5 million unique viewers, followed by Yahoo! Sites with 51.5 million, Facebook.com with 49 million, VEVO with 46.2 million and Viacom Digital with 38.9 million.

Vimeo moved into the top 10 ranking for the first time at #10 with 21.4 million viewers. Nearly 33 billion video content views occurred during the month, with Google Sites generating the highest number at 18.3 billion, followed by Yahoo! Sites with 717.8 million.

Google Sites had the highest average engagement among the top ten properties.

Online video advertising had another record-breaking month in June with 11 billion total video ad streams as each of the top 5 video ad properties delivered more than 1-billion video ads.

Google Sites ranked first with 1.41 billion ads, followed by BrightRoll Video Network with nearly 1.39 billion, Hulu with 1.33 billion, Adap.tv with 1.15 billion and TubeMogul Video Ad Platform with 1.04 billion.

Time spent watching video ads totaled 4.6 billion minutes, with BrightRoll Video Network delivering the highest duration of video ads at 805 million minutes.

Video ads reached 53 percent of the total U.S. population an average of 68 times during the month. Hulu delivered the highest frequency of video ads to its viewers with an average of 52, while ESPN delivered an average of 34 ads per viewer.

The June 2012 YouTube partner data revealed that video music channels VEVO (45.1 million viewers) and Warner Music (26.1 million viewers) maintained the top two positions.

Gaming channel Machinima ranked third with 23.6 million viewers, followed by Maker Studios with 21.2 million and FullScreen with 16.2 million. Among the top 10 YouTube partners, Machinima demonstrated the highest engagement (76 minutes per viewer) followed by VEVO (50 minutes per viewer). VEVO streamed the most videos (567 million), followed by Machinima (447 million).

Other findings from June 2012 market study include:
  • 84.8 percent of the U.S. Internet audience viewed online video.
  • The duration of the average online content video was 6.8 minutes, while the average online video ad was 0.4 minutes.
  • Video ads accounted for 25 percent of all videos viewed and 2 percent of all minutes spent viewing video online.

Saturday, July 28, 2012

Masters of Vertical Integration in the Digital Domain


Is the future of digital media open or closed? How is the ascent of smart devices redefining the environment? To what extent have platforms become a dominant force in mediating the digital media experience -- for both consumers and marketers? These are the key questions that researchers attempted to answer in a recent market study of the evolving digital landscape.

eMarketer says that a significant portion of the online digital experience now rests in the hands of four dominant companies -- Amazon, Apple, Facebook and Google.

"Other than content creation, it’s difficult to imagine any aspect of today’s digital landscape where at least one of the Big Four fails to play a prominent, if not defining, role," said eMarketer in their new report entitled The Changing Digital Landscape: Key Trends Marketers Need to Know.

The apparent clashes between these four companies are already reshaping the digital landscape -- affecting hardware, software, services, the delivery and sale of content, advertising, and commerce.

Of course, the key players are not competing equally in all of these digital realms. But by a combination of necessity and design, all have expanded far beyond their core competencies in an effort to strengthen their appeal to users, solidify their standing with marketers and maintain their easily eroded relevance in the fast-moving digital economy.

For example, Google initially went head-to-head with Apple in the smartphone arena -- using the Android OS as its primary weapon. Google initially introduced its own Nexus One smartphone at the beginning of 2009, and it essentially accomplished their goal of gaining broad awareness for the Android platform.

Then, Google recently introduced its own Nexus 7 media tablet, further reinforcing the role of Android and its associated software applications -- extending and evolving an active independent developer ecosystem in the process.

By comparison, consider the contrasting approach that Facebook has embarked upon. As a platform that sits across every device and operating system, eMarketer believes that it now finds itself at a competitive disadvantage. Persistent rumors of the upcoming introduction of a Facebook smartphone offering are perhaps an indication that it has recognized the benefits of gaining a hardware presence.

“Expansionary moves on the part of the Big Four reflect a corresponding evolution in the digital world. Tight, increasingly verticalized integration of hardware, software, content, services, advertising and commerce has become table stakes,” said eMarketer.

They believe that competing effectively now requires direct control over many, if not most of these closely related assets, and enough leverage in areas of strength to compensate for areas of weakness.

Overall, the influence the Big Four wield over the digital experience is broad-reaching. In many ways, it is their domain and everyone else -- consumers and marketers alike -- simply play or work within it.

Friday, July 27, 2012

Mobile Network Services Market will Grow to $976B

Infonetics Research has released its latest report on the mobile network service provider ecosystem -- which tracks operator subscribers and revenue derived from pre-paid and post-paid mobile broadband data, voice, and messaging services.

"The mobile world is undeniably shifting from voice to data, as mobile operators migrate as many subscribers as they can to data service plans and smartphones," says Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Already in North America and Asia Pacific, mobile operators derive over 40 percent of their mobile revenue from mobile broadband and messaging. But, while mobile broadband is no doubt the fastest growing revenue stream for network operators, mobile messaging and voice aren't dead just yet.

According to Teral's assessment, the prophecies of doom for mobile operators' SMS/MMS cash cow are being overplayed. Despite the popularity of over-the-top messaging applications like Apple's iMessage and WhatsApp, his data shows SMS growing every year from 2012 to 2016, delivering a cumulative $1 trillion in operator revenue during those 5 years.

And, over that same period, voice revenue will decline only slightly, still making up a sizable chunk of mobile network operator revenues.


Highlights from the latest market study include:
  • On a global basis, Infonetics expects operators to see a 6 percent increase overall in revenue from mobile voice, mobile broadband, and mobile messaging services in 2012.
  • The highest growth in 2012 will come from Asia Pacific and Latin America, while the EMEA region is expected to see a slight decline due to cutthroat competition and economic turmoil.
  • Globally, the mobile network services market is forecast to grow to $976 billion by 2016, with the bulk of the growth coming from mobile broadband services.
  • Mobile data (text messaging, multimedia messaging, and mobile broadband) service revenue rose in every region in 2011, driven by an increase in smartphone usage.
  • At more than a quarter trillion dollars in 2011, Asia Pacific generates the largest portion of mobile service revenue.
  • Voice revenue dipped 0.8 percent worldwide in 2011, despite the growing use of voice services in China.
  • Mobile broadband subscribers will grow from 15 percent to nearly 40 percent of all mobile subscribers between 2011 and 2016.

Thursday, July 26, 2012

Why TV Broadcasters will Promote their Social Apps

Television broadcasters around the world are apparently deeply divided over their strategy for Social TV applications. Regardless, most seem to agree on one significant point -- they desperately need a meaningful game plan now, while the window of opportunity is still open.

According to the findings from the latest market study by Futurescape, a key trend in the first half of 2012 is that some broadcasters are moving quickly to counteract the perceived influence and power that Facebook and Twitter are having over their TV audiences.

The savvy broadcasters are now investing in Social TV companies and launching their own Social TV platforms. Meanwhile, others are following a diametrically opposed strategy of partnering with the dominant social networks -- in an attempt to facilitate viewer interaction.

This is most evident for the kinds of major news and sports programming that viewers discuss on second screen devices -- such as smartphones and tablets -- during the live TV broadcasts. This activity includes high-profile events like the upcoming Olympic Games and the U.S. elections in November.

Broadcasters are increasingly integrating Social TV within their own digital platforms, Web sites and second screen apps. They claim that curating conversations about their shows gives fans more focused and enjoyable discussions than on the Twitter or Facebook platform.

However, it clearly also enables some broadcasters to proactively counteract the social network's current dominance in Social TV. This is likely the direction that some of the broadcaster late-adopters will eventually take in the marketplace.

In July, NBC launched Chatline for its Dateline news magazine show. This app works on PCs, mobile phones and media tablets, and brings together viewers via Facebook, Twitter, GetGlue and the Dateline Web site.

Other television broadcaster Social TV platforms include CBS Connect, HBO Connect, Oxygen Connect and USA Network Character Chatter.

Many broadcasters have extensively integrated Twitter into their Social TV activity, typically by showing hashtags as part of a show’s transmission to encourage viewer participation.

CNN and the BBC, however, have both recently announced major deals with Facebook. The social network has developed a new and more aggressive strategy of moving into the Social TV space and closing Social TV deals with broadcasters.

NBC stands out as a broadcaster with a dual strategy -- it's developing its own platform, with Chatline, and working with TV interaction company Shazam to give viewers second screen information for its Olympics coverage.

Yet, concurrently, it also has a Facebook deal for the Olympics which includes broadcasting a "Talk Meter" of Facebook users’ reactions to the London 2012 games. In summary, this is a key space to watch in the coming weeks and months, as the industry shake-out starts to materialize.

Wednesday, July 25, 2012

How Mobile Broadband is Driving a Transformation

Mobile broadband related advances are changing the legacy business models of the telecom sector. In developing nations around the globe, many people will likely encounter the internet for the first time via an inexpensive smartphone.

Infonetics Research has released excerpts from its latest 3G and 4G (LTE, WiMAX) Broadband Devices and Subscribers market study that highlights these changes.

The global study and resulting report tracks smartphones, smartphone OS, mobile broadband USBs, embedded mobile broadband cards and devices, netbook and tablet OS, mobile broadband and WiMAX routers, and mobile broadband subscribers.

"We expect to see some segmentation in the smartphone market in the next 12 to 24 months between high-end 'ultra smart' smartphones and a new breed of 'smart enough' smartphones aimed at the lower end of the market," says Richard Webb, directing analyst at Infonetics Research.

Infonetics says that ZTE and Huawei have already launched lower-cost smartphones this year with others surely to follow, and if they achieve volume, the average selling price of a smartphone very likely will get pushed down.


Highlights from the latest market study include:
  • Global smartphone sales totaled $45.9 billion in the first quarter of 2012, down 3 percent from the typically high fourth quarter.
  • By 2016, Infonetics expects the worldwide smartphone market to hit $237 billion.
  • Apple holds a strong lead in the global smartphone market, with 45.7 percent revenue market share in 1Q12.
  • Samsung, which surpassed HTC about a year ago, easily held on to 2nd place for global smartphone revenue, well ahead of RIM, Nokia, and HTC.
  • The Android operating system (OS) hit its highest market share to date in 1Q12, used in 57 percent of all smartphones shipped.
  • Demand for embedded mobile broadband devices continues unabated, with shipments of MIDs (mobile Internet devices, such as e-readers and mobile gaming consoles) growing the fastest over the next 5 years.
  • Tablets will continue to make up the lion's share of the embedded devices segment, and will be a major focus of activity and innovation in the mobile broadband space, with LTE as a big driver supporting faster speeds for video streaming, multiplayer gaming, and multimedia communications.

Tuesday, July 24, 2012

The Upside Potential for Touch Screen Technologies

The total revenue for touch screen modules will reach $16 billion in 2012, and nearly double in six years, reaching $31.9 billion by 2018, according to the latest market study by NPD DisplaySearch.

The market growth is being driven by increased demand from applications such as media tablets, smartphones, and emerging new notebook PCs. While the leading touch technology is projected capacitive touch, demand for other technologies is also on the rise.

Touch screen penetration has rapidly increased in mobile phones, handheld games, and game consoles, as well as in tablet applications, which are forecast to collectively account for more than $13.6 billion in touch screen revenues this year.

In addition, NPD DisplaySearch forecasts strong touch screen growth over the next several years driven by demand in larger display applications such as convertible or hybrid notebook PCs.

Today, mobile phones are the biggest application for touch screens in terms of unit shipments, accounting for three-fourths of units shipped in 2011. It's forecasts that 1.2 billion touch screens will ship for mobile phone applications in 2012, that's up by 68 percent Y/Y.

Media tablets is a fast-growing application for touch screens. Shipments tripled in 2010 and reached 79.6 million in 2011. Growth continues to be strong, with a forecast of more than 130 million touch screens for tablets in 2012, and more than 190 million in 2013.

Moreover, revenues for touch screens in tablet PCs are expected to grow by more than $3 billion in 2013.

Touch penetration is also expected to increase dramatically in convertible or hybrid notebook PCs. It's forecast that touch screen penetration on notebook PCs will increase from 2 percent in 2011 to about 8 percent in 2013.

Over the next few years, all-in-one PCs and automobile monitors are expected to contribute to touch screen market growth as well. Touch technologies with high transmittance, low power consumption, multi-touch or gesture recognition will benefit the most.

Monday, July 23, 2012

New Applications for Gesture Recognition Technology


In the near future, gesture recognition technology will routinely add yet another dimension to human interactions with consumer electronic devices -- such as PCs, media tablets and smartphones.

According to the latest market study by ABI Research, they now forecast that 600 million smartphones will be shipped with vision-based gesture recognition features in 2017.

"Gesture recognition is a very exciting prospect, particularly for smartphones and tablets," says ABI Research senior analyst Josh Flood.

Camera-based tracking for gesture recognition has actually been in use for some time. Leading video game consoles -- Microsoft’s Xbox and Sony’s PlayStation -- both have gesture recognition built-in; known as Kinect and PlayStation Eye respectively.

These devices are in their seventh and eighth generation. However, several challenges remain for gesture recognition technology for mobile devices, including effectiveness of the technology in adverse light conditions, variations in the background, and high power consumption.

It's believed these problems can be overcome with different tracking solutions and new technologies. As an example, Qualcomm has been heavily promoting its Snapdragon chipset processors’ visional gesture recognition technology, and Intel has primarily focused upon touch capabilities for new ultrabooks.

Currently, only a small number of the smartphones shipped have gesture recognition. Pantech, a Korean smartphone OEM, began selling its Vega LTE handset in Korea during November 2011 with gesture recognition technology -- using camera-based tracking capabilities.

Qualcomm’s Snapdragon processor will offer smartphone OEMs the ability to have camera, infrared, and ultrasound based tracking. These tracking solutions give smartphone OEMs and app designers some attractive techniques for new interactions and enhancing the user's experience.

Additionally, gesture recognition will likely become a useful feature for all media tablets, portable media players, and portable game players. Over time, it is anticipated that a higher percentage of media tablets will have the technology, rather than smartphones.

Saturday, July 21, 2012

Measuring the Impact of Online Video Ad Campaigns


Why are savvy marketers using promotional video content in their online campaigns? Because they believe that it effectively engages their target stakeholders, but they're really not certain of the actual impact.

With online video advertising in the U.S. expected to experience steady growth -- eMarketer now estimates that spending will climb from $3.1 billion in 2012 to $9.3 billion in 2016 -- marketers will need to figure out how to best employ metrics to gauge the value of campaigns on a more individualized basis.

As marketers continue to expand the slice of their digital ad budget that's being applied to online video, a better understanding of metrics in this area has become a key part of the process.

But due to the common inexperience with online video, as well as the absence of any clear measurement standards, setting goals that define meaningful outcomes will likely present challenges to marketers as these types of campaigns mature.

In its latest survey of ad agency executives conducted in April 2012, Brightroll found that respondent agencies had yet to settle on one metric as the agreed-upon measure of an online video campaign’s success. While 26 percent said measuring views was the most important measurement of a campaign, 23 percent named brand lift and 22 percent said sales impact.

According to the ad agency assessment, their client perspective on the best way to measure audiences was also spread almost evenly among a number of approaches, illustrating that a standard metric has yet to be established.

One-third said their clients considered unique viewers to be the best way to measure audience. Another one-quarter said it was target impressions. And about the same number named gross rating point (GRP) or target rating point (TRP), which were combined into one category for the survey.

Advertisers are apparently eager for information that can bridge the online and offline worlds -- by contextualizing digital effectiveness in terms of older, offline metrics.

When asked what areas of online video warranted additional research, about three in 10 respondents sought greater insight into how video affected offline purchases.

Almost one-quarter of those polled wanted more information about the performance of online video ads in comparison to traditional TV advertising. And interest in understanding how to link the gross rating point (GRP) to online video buying grew by more than six percentage points between 2011 and 2012.

Friday, July 20, 2012

Why the U.S. PC Market Shrank by 10.6 Percent

The worldwide personal computer (PC) market saw growth stall in the second quarter of 2012 (2Q12), with shipments falling 0.1 percent from a year ago, according to the latest market study by International Data Corporation (IDC).

The results are slightly below IDC's May projections of 2.1 percent year-on-year growth, but in-line with projections of a slow second and third quarter before faster growth by year end.

Part of the reason for slow 2Q12 sales was disappointing sell-out of distribution channels during the first quarter. This limited demand from channels that are wary of building inventory ahead of new product launches this fall.

Moreover, consumers remained reluctant about purchasing PCs in this environment of tech transition and soft economics. Ultrabooks have not yet produced any meaningful rise in volumes, perhaps due to the perceived high price and questionable added value.

Constrained demand in Europe and the U.S. has also been felt in emerging markets for some time, but the second quarter brought another milestone of sorts as Asia-Pacific (excluding Japan) showed flat year-on-year growth -- clearly, its worst performance in years.

"These latest results validate IDC's expectation that the second quarter would be a transition period where both economic factors and anticipation for new products in the second half of the year would result in relatively low PC shipment growth," said Jay Chou, senior research analyst at IDC.

The announcement of a Windows 8 launch date, as well as broader communication of new features in the OS, are key steps that may help to address the uncertainty about new product availability and help consumers and channels plan their purchases.

The U.S. market suffered a double-digit contraction in the second quarter as market saturation and economic factors combine with anticipation of Windows 8 and other changes later in the year. In this context, consumers are delaying purchases, and vendors and retailers are slowing down their PC activities to clear existing inventories.

The situation is exacerbated by the abundance of low-cost notebook PC options for consumers, a slowing replacement cycle in the commercial sector, and the big macro-economic and political events affecting confidence and spending.

"We don't expect PCs using Windows 8 to boost growth significantly until the fourth quarter, which leads to a conservative outlook for the third quarter," said David Daoud, research director, Personal Computing at IDC.

The U.S. market performed much worse than expected, shrinking by 10.6 percent -- compared to the forecast decline of -4.4 percent. Most vendors and their channel partners struggled with shrinking demand as a saturated market and lack of incentives are leading buyers to delay purchases of PCs for the time being.

To many in the industry, media tablets are likely becoming the great hope for a renewed market upside. That being said, the potential for healthy profit margins are still somewhat unclear.

Thursday, July 19, 2012

Raising the Bar of Expectations for Pay-TV Design


The world was a much simpler place for pay-TV providers when all their competitor user interfaces (UI) had the same unintuitive design, set-top box remote controls had dozens of tiny buttons, channel guides were not interactive and nobody cared to change the status-quo of perpetual mediocrity.

Then unwelcome outsiders introduced alternative offerings and the bar of UI design expectations was raised off the ground. The result? The legacy pay-TV companies are now struggling to keep up with the superior video experiences enabled by connected TVs, smartphones and media tablets.

Their apparent situation, caused by an apathetic slow-moving business model, as well as serving less technically savvy consumers, is exacerbated by suffering a significant hardware disadvantage -- as they typically rely upon cheap set-top boxes that are based upon a 5-7 year-old technology.

Meanwhile, the savvy consumers are looking at video content from a much wider selection of choices -- including more channels, a vast array of video on demand (VOD) options, DVR recordings and even internet delivered streaming video content.

"To meet this demand, pay-TV operators are adopting search, recommendation, and discovery technologies that can help viewers find the right content at the right time," said Sam Rosen, practice director of TV & video at ABI Research.

These enhanced systems typically leverage cloud-based technologies to compensate for the older set-top box technology in the home.

According to the latest market study by ABI Research, over 50 percent of the savvy consumers are already watching video content while on connected TV platforms (including Blu-ray players, Smart set-top boxes, Connected TVs, and Connected Game Console).

Between 31 percent and 52 percent of those enabled consumers are using these devices for access to internet delivered video content (depending on device type).

This sets a new high-bar for designing video entertainment experiences. HBO Go offers beautiful graphics, simple navigation, and responsiveness while Netflix has started to offer multiple user interfaces -- including one optimized for children.

Established digital media companies such as Rovi and Technicolor, TV middleware companies (notably, Viaccess Orca with its COMPASS recommendation technology), together with a set of innovating companies, including DigitalSmiths, APRICO, and Gravity R&D (winners of the Netflix prize for improving search algorithms) are all competing to offer the core technologies rolled out by cable, satellite, and IPTV pay-TV operators.

In addition, second screen experiences that are designed to use on a tablet while in front of the TV, are gaining more attention from the legacy pay-TV service providers.

Wednesday, July 18, 2012

Growth for M2M Connected Device Platform Market

Connected Device Platforms (CDP) are software systems that help to facilitate the deployment and management of connected devices for machine-to-machine (M2M) applications over cellular wireless networks.

With an expected market of $2.14 billion in 2017, CDPs are typically provisioned by Mobile Network Operators (MNOs) and delivered to M2M application deployment companies as a cloud service, according to the latest market study by ABI Research.

While several large MNOs have built their own CDP, there is a clear trend in the market towards third-party-provided solutions.

“Several vendors are active in the market, including Ericsson, NSN, and NEC, among others, but the clear leader, in terms of sheer number of operator partners and market traction, is pure-play provider Jasper Wireless,” says ABI research practice director Sam Lucero.

As the M2M market becomes a more mainstream segment of the overall mobile industry, CDPs are increasingly becoming a required component of the MNOs’ service offerings.

This has made the development and provisioning of CDPs a top issue for the value chain and CDPs have now largely displaced the increasingly commoditized embedded module market as a central focal point of industry discussion and activity.

Several CDP vendors have expressed the idea that the tier-1 MNO customer base for CDPs is now largely wrapped up -- meaning, MNOs have made their selections.

While it’s true that key MNOs, such as AT&T, Verizon Wireless, Sprint, Vodafone, Orange, Telefonica, and Telenor Connexion have deployed solutions, there remains a large un-tapped potential among Tier-2 MNOs and MNOs in the APAC region and, eventually, the Middle East and Africa.

There may also be the potential for an upgrade inflection point in the near future, when MNOs that either deployed their own self-built platform, or a third-party platform, decide to bring in a new outside provider.

“Merchant market providers should be aggressively positioning themselves now to be the upgrade choice for current CDP-deployed MNOs, as well as targeting MNOs outside of the established Tier-1 players in North America and Europe,” says Lucero.

Tuesday, July 17, 2012

Global 3D TV Shipments Increased by 74 Percent

Shipments of LCD TVs are now expected to grow at a slower pace in 2012 than 2011, according to the latest market study by NPD DisplaySearch. Moreover, the overall TV set market is expected to decline this year -- even as segments such as emerging markets, large screen sizes, LED backlights, and 3D continue to grow.

Total TV shipments are forecast to fall 1.4 percent in 2012 to 245 million units, while LCD TV is expected to increase by 5 percent — compared to 7 percent growth in 2011 — reaching 216 million units.

The decline in overall TV market demand and the slower growth in LCD TV shipments can be attributed to the slower rate of price erosion and cautious spending by consumers in Europe and Asia.

Average LCD TV selling prices are only expected to decline 4 percent in 2012 compared with 6 percent erosion in 2011 and 10 percent erosion in 2010. The growth is also slower this year as the transition to digital broadcasting, which accelerated purchases in major markets over the past few years has largely been completed.

However, many emerging markets are still in the early stages of the switch to digital broadcasting.

Growth in emerging markets like China, Asia Pacific, Latin America, Eastern Europe, as well as the Middle East, and Africa, are expected to reach 8 percent Y/Y in 2012, matching the pace from 2011. Growth in these regions is expected to remain in the mid-single-digit range throughout the forecast period, offsetting the lack of strong growth in countries already well along the flat panel TV conversion path.

Indeed, LCD TVs remain the only growing TV technology, as OLED TVs are likely to launch late this year, and LCD continues to take market share from both CRT and plasma technologies. LCD TVs are expected to account for about 88 percent of total TV shipments worldwide in 2012, up from 82 percent the year before, and are projected to peak around 97 percent of overall unit demand in 2015.

Plasma TV shipments on the other hand will fall to about 5 percent, declining 26 percent Y/Y as pricing becomes uncompetitive at key sizes.

Larger screen sizes continue to increase their share as affordability improves and early adopting flat panel TV consumers re-enter the market for an upgrade. The share of TV shipments at 50” and larger screen sizes is expected to jump from 6.5 percent in 2011 to 7.7 percent in 2012 and reach 10 percent by 2015. This will bring the average screen size to 35” for the first time in 2012, while the average size sold in North America is expected to exceed 40” in 2013.

The share of LED-backlit LCD TVs is expected to increase to 69 percent in 2012, compared to just 45 percent in 2011. The primary reason for the growth in share is the introduction of low-cost direct-LED backlight models that can be priced at a very small premium over CCFL backlit models.

Direct-lit LED LCD TVs are bulkier than thin edge-lit models, but the lower cost will help move the market away from CCFL. Several governments, like China, are encouraging the purchase of these more energy efficient models.

While the outlook for 3D TV shipments has cooled somewhat, 74 percent Y/Y growth is still very impressive for a technology entering the third year of availability, and adoption in many regions remains robust.

Both Western Europe and China are expected to have almost 30 percent of total TV unit shipments as 3D ready sets and after a very slow start in North America, adoption is expected to improve as the premiums fall, availability grows, and accessories like glasses decrease rapidly in cost.

Even so, the growth in 3D TVs is dependent on better 3D content availability, but a broader installed base of 3D sets will encourage content producers in a virtuous cycle.

Monday, July 16, 2012

Upside for M2M Application Enablement Platforms

According to the latest market study by ABI Research, cellular wireless machine-to machine (M2M) application development has traditionally been a complex, costly, and time-consuming endeavor.

Typically, software developers create their applications from start to finish as entirely custom projects. However, across different applications and verticals, there is actually much commonality of requirements in terms of core features and functionality.

For example, how to model an object in the application, how to create rules and alerts, and how to provide security mechanisms are all features that span the M2M market.

Increasingly, third-party providers of what ABI Research calls Application Enablement Platforms (AEPs) -- software designed to provide these core features for multiple M2M applications -- are stepping up their efforts to abstract away much of the burden of application development.

"ABI Research believes the Market for AEP software will grow from about $169 million in 2011 to roughly $1.7 billion by 2017," says ABI Research practice director Sam Lucero.

Despite the vast opportunity for merchant-market AEP solutions, the market at present is nascent, small, and comprised of a variety of vendors coming to the market from differing backgrounds.

ABI Research counts over 30 companies currently active in this space, ranging from pure-play providers like Axeda, ILS Technology, and ThingWorx, to M2M module and modem suppliers like Digi International, Sierra Wireless, Novatel Wireless, and Eurotech, to core network infrastructure providers like NSN and NEC.

ABI Research believes that at the present state of market development, the pure-play providers as well as those coming at the market from a module/modem background, are gaining the most traction in the market. This is a benefit of their close focus on the M2M market and their nuanced understanding of the needs of M2M application providers.

However, there is clear opportunity for consolidation going forward, and ABI Research expects that as the M2M market becomes ever more mainstream, it is likely that large core network infrastructure and IT equipment vendors with deep pockets will start to “roll up” the smaller players in a natural process of consolidation.

Saturday, July 14, 2012

U.S. Media and Entertainment Digital Ad Spending


How quickly will online media and entertainment spending grow between 2011 and 2016? What percentage of Facebook advertising impressions are generated by entertainment-related companies? What are the most common goals of entertainment-related mobile advertising campaigns? Those were the questions that eMarketer attempted to answer during their latest market study of the U.S. media and entertainment industries.

Overall, the market outlook is very promising, with a few caveats.

Online ad spending by the U.S. media and entertainment industries will rise from $2.77 billion in 2012 to $4.34 billion by 2016, according to a new eMarketer report.

As more consumers turn to the internet for news and entertainment, advertisers are using digital campaigns to raise awareness, generate buzz and encourage online sales.

eMarketer’s ad spending forecast combines media and entertainment because they say that the line between media companies and entertainment companies is becoming increasingly blurry.

The same corporate conglomerates often own the news media that produce entertainment content. Additionally, these organizations are able to use their own online delivery channels to advertise and cross-promote their various product offerings.

However, there are some important differences between media and entertainment -- when it comes to digital ad spending trends. While aggregate spending will increase over the forecast period, spending in the entertainment sector will actually decline this year.

Moreover, flat spending by hard-pressed traditional news media outlets will contribute to lower-than-average growth for entertainment and only average growth for media through 2016.

"Though media companies control some of the most visible online properties, their spending on both traditional and digital advertising appears to be artificially depressed," said eMarketer.

The industry still benefits from its unique ability to place free or lower-cost house ads. However, eMarketer sees indications that this approach may be falling short in reaching consumers that multitask. Some, including Google and Gannett, have now stepped up multipronged approaches that go beyond their own online properties.

In the entertainment-only industry, changing marketing dynamics in a number of major sectors will contribute to a slowdown in spending. According to eMarketer's assessment, movie studios, the music industry and video game companies all face challenges from lower sales and increased online competition.

Therefore, the whole entertainment industry will likely contract this year, as it looks to new revenue models focused on more targeted products.

"Despite these many challenges, entertainment industry advertising spending and growth is expected to pick up in 2013," said eMarketer, "fueled by the hope for a better economy, streamlined content distribution models, a better understanding of digital marketing and new technology to promote."

Friday, July 13, 2012

Asian and Eastern European Pay-TV Market Growth


The apparent saturation of pay-TV subscribers in North American and Western European markets has troubled set-top box vendors for some time. They have had to look elsewhere for new upside opportunities.

As an example, while the number of U.S. households that subscribe to  pay-TV service has remained flat during the last two years, those subscribers who are struggling with economic pressures are more likely to switch providers or totally cancel service, according to a recent report from Leichtman Research Group.

As a result, emerging markets have become the new high-growth potential opportunity. However, the emerging market environment is very different from the traditional pay-TV arena. It has economic demands that many mainstream device manufacturers simply can't meet.

A jump in cable and satellite set-top box shipments in Asia-Pacific markets is being driven by cable digitization in India and China -- as well as China's roll-out of digital satellite boxes to its rural households.

"Digital transitions are bringing consumers access to hundreds of international channels and a few HD services for the first time. Asia-Pacific and Eastern Europe’s growth in set-top box units will outstrip those of the rest of the world in the next 5 years," according to Sam Rosen, practice director of TV & video at ABI Research.

Pay-TV service providers in these developing markets require very low-cost boxes. Therefore, set-top box manufacturers are looking to decrease BOM costs by using in-house CAS solutions and low cost SoCs optimized with lower-powered CPUs that support HD video -- and with much simpler graphical user interfaces.

"China has a robust ecosystem of set-top box manufacturers, coupled with CAS vendors China Digital TV and Sumavision" according to Rosen's assessment.

Meanwhile, India is struggling to enable an ecosystem of local manufacturers, as well as to get adequate supply of boxes to meet an unrealistic digitization time-frame.

Thursday, July 12, 2012

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


comScore reported the key trends in the U.S. mobile phone industry during the three month average period ending May 2012. Their latest market study surveyed more than 30,000 U.S. mobile subscribers and found Samsung is still the top handset manufacturer overall with slightly increased market share.

Google Android continued to grow its share in the U.S. smartphone market, accounting for 50.9 percent of smartphone subscribers, while Apple captured 31.9 percent.

Moreover, 234 million Americans age 13 and older used mobile devices.

Device manufacturer Samsung ranked as the top OEM with 25.7 percent of U.S. mobile subscribers (up 0.1 percentage points), followed by LG with 19.1 percent share. Apple continued to grow its share in the OEM market, ranking third with 15.0 percent (up 1.5 percentage points), followed by Motorola with 12.0 percent and HTC with 6.1 percent.

Nearly 110 million people in the U.S. owned smartphones during the three months ending in May, up 5 percent versus February.

Google Android ranked as the top smartphone platform with 50.9 percent market share (up 0.8 percentage points). Five years after the release of the first iPhone, Apple’s share of the smartphone market reached 31.9 percent in May (up 1.7 percentage points). RIM ranked third with 11.4 percent share, followed by Microsoft (4.0 percent) and Symbian (1.1 percent).

In May, 74.8 percent of U.S. mobile subscribers used text messaging on their mobile device. Downloaded applications were used by 51.1 percent of subscribers (up 1.6 percentage points), while browsers were used by 49.8 percent (up 0.6 percentage points).

Accessing of social networking sites or blogs increased 0.6 percentage points to 36.7 percent of mobile subscribers. Game-playing was done by 33.5 percent of the mobile audience (up 1.3 percentage points), while 27.0 percent listened to music on their phones (up 2.2 percentage points).

comScore MobiLens data is derived from an intelligent online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device.

Wednesday, July 11, 2012

Top 3 Drivers for the Mobile Device Security Market

Information security has always been one of the forefront considerations within the enterprise mobile device industry. BlackBerry mobile phone maker Research in Motion (RIM), for example, gained the attention of Wall Street bankers because of the financial industry's need for high levels of data protection and security -- along with the convenience of mobile data use.

While much attention in the mobile industry tends to focus on software-based security -- through detection and preventative applications -- very little seems to be said about the apparent need for embedded mobile device hardware security.

Valued at approximately $430 million in 2012, the mobile device hardware security market will be worth $1.9 billion by 2017, according to the latest market study by ABI Research.

The bulk of the mobile security market is attributed to embedded chip security technology -- such as the ARM TrustZone -- and the other semiconductor company security solutions.

Revenues generated by secure elements for near field communication (NFC) and biometric sensors are also factored into the mix, though they're relatively small compared to embedded chip security. This will change, however, in the next two years.

"The primary drivers for embedded chip security are increasing demand of mobile payment transactions, digital rights management, enterprise protection, and control access to the device," says Joshua Flood, senior analyst, devices, applications & content at ABI Research.

Additionally, semiconductor companies will add further security features onto ARM's TrustZone technology, such as advanced security options for content or platform protection.

Presently, revenues generated from NFC secure elements are a small segment of the mobile device security market. In 2011, only 7 percent of smartphones had NFC capabilities. Nevertheless, an increase in point of sale (POS) transactions, such as purchasing coffee, transportation vouchers, or even cinema tickets, will increase the number of NFC smartphones.

It's estimated that more than 60 smartphone models with NFC capability are available now. Within the next two years, NFC security will account for half of mobile device hardware security revenues.

Tuesday, July 10, 2012

Encouraging Global Trend for TV Set Replacement

Use of media tablets -- such as the Apple iPad and the numerous variations of Google Android-based devices -- by consumers for viewing television or video content more than doubled in 14 regional markets that were surveyed recently, according to the latest market study by NPD DisplaySearch.

This growth has occurred in conjunction with increased tablet adoption in these markets. The widespread tablet adoption was driven by improved broadband connectivity that has facilitated use of these devices as alternate content-viewing devices.

The fastest growing region for media tablet usage is Turkey, with tablet use growing from 3.1 percent in 2011 to 16.5 percent in 2012. In addition, there was strong tablet usage growth in Germany (up nearly fourfold Year-over-Year), France and the U.S. (both up more than threefold Y/Y).


Tablet Usage for TV/Video Content Viewing by Countries Surveyed

Besides media tablets, consumers are also leveraging other alternate electronic devices such as notebook PCs and mobile smartphones to view TV or video content.

The study indicates that more than 70 percent of consumers use alternate electronic devices -- such as tablets, notebook PCs, smartphones, MP3 players and desktop computers -- to view TV or video content. In mature markets like the U.S., the U.K. and Germany, a higher number of people viewed video content on portable computing devices such as media tablets and notebook PCs.

In emerging markets like China, Indonesia, Russia and Turkey, consumers reported that they view content on mobile devices such as smartphones -- which is likely due to the relatively high penetration of wireless mobile networks.

“While the trends vary by region, it is evident that consumers around the globe are watching more video and TV content with their portable electronic devices as these provide additional means of accessing content,” said Riddhi Patel, research director of consumer insights at NPD DisplaySearch.

Despite this increase, however, TVs still remain the primary consumer electronics device of choice for viewing TV content, with 30 percent of consumers reporting that they view TV or video content on TVs alone.

Alternate Ways Consumers View TV/Video Content

That being said, there's an encouraging upside trend -- TV set replacement cycles were shorter in 2012 than in 2011 in all the countries surveyed as consumers expressed the desire for improved picture quality, larger screen size and high-definition (HDTV) performance -- all of which can be fulfilled with their adoption of the latest flat panel technology.

Across the globe, increasing availability of these new TV sets -- in a range of sizes and rapidly declining retail prices -- meet up with consumer needs and preferences. Moreover, LCD continues to dominate global markets as the flat panel technology of choice.

Monday, July 09, 2012

Why App Store Ecosystems are Strategic Assets


Mobile networking service providers are good at providing basic connectivity, but they typically fail to deliver value-added services (VAS) that their own subscribers need or want. According to the latest market study by Informa Telecoms & Media, mobile network operators will see their share of mobile content and commerce-related revenue drop from 44 percent in 2011 to 31 percent in 2016 globally.

The telecom service provider market share will shrink in areas such as mobile music, mobile games, mobile TV or video, mobile messaging, location-based services and chat or social networking over the next five years. These new services will increasingly be provided over the top (OTT) by third parties that specialize in these creative offerings.

According to Informa's assessment, this fall in market share would be more precipitous if it wasn't for the growing role that operators will play in mobile app payments.

The app stores have unseated the operators from their former dominance in the mobile content space, but carrier billing -- app-download and in-app payments charged to mobile phone bills -- will allow savvy operators to claim an increasing share of revenues over the coming years.

Although most operators have been excluded from the creative mobile apps ecosystem, all the other players that have jumped on the mobile apps bandwagon -- including Google, Microsoft, Nokia, RIM and Samsung -- need carrier billing to get paid for downloads from their app stores.

Only Apple benefited from the precedent, through iTunes, of having a direct billing relationship with millions of digital media users. It was able to convince network operators that they had no choice, and should look elsewhere for profit. Apple is masterful at manipulating inept "partners" into accepting their terms and conditions.

The Apparent Mobile Service Provider Dilemma

So, what's the market outlook, and where's the upside potential?

"Operators could miss out on the opportunity afforded by carrier billing if they don’t make it more affordable and accessible to app-store owners and developers, and if they do not introduce more efficient and flexible systems than the clunky and unreliable PSMS," says Guillermo Escofet, senior analyst at Informa Telecoms & Media.

According to Informa, more compelling alternatives are already appearing in countries such as Russia, where instant-payment terminals in streets allow users to turn cash into e-money to spend on digital goods.

The slice of app revenues going to operators will grow from 10 percent in 2011 to 17 percent in 2016. Not because operators will increasingly act as a direct retail channel for apps, but due to the fact that they will increasingly act as enablers of paid-app downloads on third-party stores.

The need for carrier billing is becoming all the more pressing as app stores push further into emerging markets, where bank accounts and plastic money are rare, and premium SMS is for most the only means of paying for digital goods on phones.

Emerging markets make up the majority of mobile subscribers globally, and that proportion is constantly growing. The app stores that that have embraced carrier billing are the most relevant to emerging markets, such as Nokia Store, Google Play (formerly Android Market) and BlackBerry App World.

Informa predicts mobile content revenues (total data revenues minus Internet access and P2P messaging) to grow from $40.7 billion in 2011 to $131 billion in 2016. Informa's forecasts only take into account direct end-user revenues -- i.e., money paid by users for content and services -- and do not include indirect revenue sources, such as advertising.

Saturday, July 07, 2012

London 2012: the First Digital Olympics Experience


The upcoming summer Olympic Games in London, England will set a precedent for the use and application of advanced digital technology -- that's from the perspective of both multimedia content producers and consumers.

The BBC says that London 2012 will be the first truly digital Games. They will ensure audiences never miss a moment, delivering unprecedented coverage across multiple digital platforms -- so that sports fans can stay up to date wherever they are, whenever they want to view the action.

The BBC will give audiences more choice, with access to:
  • Every Olympic event, sport and venue live, on-demand and interactive on bbc.co.uk/sport, with up to 24 live HD streams and 2,500 hours of coverage.
  • Pages for every athlete, sport, venue and country, enabling detailed access to real-time updated Olympics data, statistics and news.
  • High quality coverage that’s personal and social, enabling audiences to follow and favorite every athlete, sport, event and country and get tailored updates, as well as access live updates, Twitter visualizations and social media commentary.

The BBC will also offer select event highlights in 3D, and deliver the world’s first trials of a "Super Hi Vision" broadcast.

Exploring the Global Olympic Marketplace

More than 4 billion people are expected to watch the London Olympics. With video content migrating rapidly to various multimedia-capable platforms, it’s likely that at least 1 billion will view events, get updates and check results on digital devices -- including PCs, mobile phones and media tablets.

Moreover, it's anticipated that billions more people will follow and discuss the sports action on social networks.

“Like media owners and consumers, marketers too are poised to make a quantum leap for London 2012, using digital platforms as never before to inform and engage audiences,” said Karin von Abrams, senior analyst at eMarketer.

The world's big media content producers -- such as the BBC in the UK and NBCUniversal in the U.S. -- have bought exclusive rights to broadcast Olympic coverage in their home territories. NBC alone paid an estimated $1.18 billion for its rights.

Those distribution deals include digital media, and both TV broadcasters are investing enormous resources in providing online and mobile access to a huge range of high-quality material.

Given that few other media owners can match that scale of content production, the BBC and NBC will likely be the primary online sources for much of the Olympic Games global audience as well.

According to eMarketer's assessment, the big question is how much viewing and information-gathering will take place on digital platforms. Research from Deloitte indicates that between 15 percent and 26 percent of internet users in France, Germany, the UK and US will watch at least some of the games on a PC or media tablet -- and in Germany, nearly half will watch via the mobile web.


Mobile Digital Media Marketing Opportunity

If the last Summer Games in 2008 are any indication of what to expect in 2012, then mobile will likely be particularly important for those looking to check-in on event results, which is what Nielsen found to be the top mobile internet activity planned by U.S. and UK users in 2008.

The gap between event results and other coverage was particularly marked among UK respondents; nearly three-quarters said they would check results on their mobiles, while less than 40 percent planned to read articles or look at medal counts there. Clearly, mobile device technology was much less advanced in 2008.

That being said, now just consider how today's mobile handsets -- that offer far better text, graphics and UI -- will enhance the interactive digital experience.

"With weeks to go before the games, it’s too soon to know which advertisers will score big wins, which social campaigns will catch fire, and which mobile strategies will capture the public imagination," said von Abrams. "But the outlook for digital marketing during London 2012 highlights trends of relevance to brand owners everywhere, especially those who rely on event sponsorship or tie-ins to generate impact."

Behind the scenes, there's a purpose-built intelligent network that's the essential communications foundation for London 2012 event venues. The ICT infrastructure that has been deployed will surely make this "the most connected sporting event the world has ever seen."

Friday, July 06, 2012

How Small Cells are Transforming Mobile Networks

Cell-based mobile networks are going through a global metamorphosis -- driven by the emergence of small cell technology deployments. Informa Telecoms & Media issued its latest quarterly small cell market status report, which highlights growing network operator interest in public access small cells as well as progress in the femtocell market.

Their report also highlights that small cells will outnumber all macrocells globally during Q4 2012 and that femtocells (aka residential small cells) alone will outnumber all macrocells shortly afterwards in Q1 2013.

In the public access market, SK Telecom has successfully started rolling out the world's first LTE small cell deployment while AT&T, Sprint and China Mobile have all committed to rolling out 3G small cell services -- AT&T and Sprint plan to launch later this year.

Verizon Wireless also announced its intention to launch LTE public access small cells in the future while Sprint is planning to roll out its first LTE designs at the end of the year. All these operators have chosen to proceed with public access services following their successful femtocell offerings.

The femtocell market was recently buoyed by the news that Telefónica plans to deploy the technology across its European and South American territories while China Mobile, the world's largest mobile operator by subscribers, has also begun its own rollout.

Additionally, Sprint, has announced it has rapidly accelerated its femtocell deployment to a total of 600,000 units -- up from 250,000 units in 2011 -- making it one of the largest rollouts across the globe.

Femtocells constitute over 80 percent of the 4.6 million small cells currently deployed globally across the 41 operator deployments -- compared to 5.6 million conventional macrocells.

By the close of 2012, there will be 6.4 million small cells -- 86 percent of which will be femtocells -- thus outnumbering the predicted 6 million macrocells worldwide. Femtocells will alone outnumber all macrocells during Q1 2013.

“We are starting to see vendor-led public access small cell R&D turning into concrete operator deployment commitments. Over the past few months numerous major operators have announced 3G and LTE public access deployment plans – SK Telecom is undoubtedly leading the charge by already rolling out LTE devices," said Dimitris Mavrakis, principal analyst at Informa Telecoms & Media.

However, it is notable that all the network operators involved in this first wave of deployments have already rolled out femtocell services, so they are already accustomed to small cell challenges and how they can be overcome.

With major mobile network service provider groups, such as Telefónica and Telenor, preparing widespread femtocell launches in the near future we can expect deployment numbers to quickly rise -- especially if they are as committed as Vodafone Group.

The reason for growing interest in public access small cells is predominantly to provide additional capacity in busy metropolitan areas. This is demonstrated in a recent Small Cell Forum study which found that even a relatively conservative small cell deployment with 4 devices per macrocell would increase typical data rates by over 300 percent and offload 56 percent of data.

However, public access small cells could also have an impact in rural and developing markets. African operator RascomStar-QAF recently announced it is trialling the technology using satellite backhaul in the Congo -- this follows ongoing trials by Vodafone UK and a rural deployment by SoftBank in Japan.

4G LTE networks are expected to be the biggest adopter of small cells, which will be predominantly deployed for capacity and coverage in high traffic public areas. The survey also found that small cells are expected to become a mass-market phenomenon in 2014 and the key challenges holding them back are network backhaul and deployment issues -- such as local electrical power and the physical placement of the devices.

Thursday, July 05, 2012

Who will Lead the New Video Entertainment Industry?

According to the latest market study by Infonetics Research, traditional pay-TV service providers have a window of opportunity to innovate and re-imagine the forward-looking video entertainment experience -- while they still have a leading position in the global marketplace.

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

"Cable video still makes up over half of the global pay-TV market, but revenue growth is decelerating due to a slowdown in new subscribers, especially in the lucrative North American market, as competition from satellite and IPTV operators intensifies and as OTT offerings from Netflix, Hulu, and others siphon away a small, but growing number of households," notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.


That being said, going forward, who will become the leader of the new video entertainment industry? Will one of the legacy pay-TV industry players move beyond the channel-centric constraints of their old business model? We'll have to wait and see.

Highlights of the latest market study include:
  • The global pay-TV market, including cable, satellite, and telco IPTV video services, totaled $261 billion in 2011 and is forecast by Infonetics to grow to $371 billion by 2016.
  • North America is again the highest-value video market due to high ARPU, but Latin America and Asia are gaining ground as a result of expanding subscriber bases.
  • Case in point: Mexico's America Movil's pay-TV subscribers and revenue grew in the triple-digit percents in 2011 from 2010; KT's grew in the double-digits.
  • DirecTV and Comcast remain the global market leaders for pay-TV revenue and subscribers.
  • DirecTV enjoys the highest ARPU due to the high take rate of its value-added services and premium content such as the NFL Sunday Ticket.
  • Comcast is the global pay-TV subscriber leader, with over 22 million subscribers in 2011.
  • In 2011, the top 20 pay-TV revenue leaders accounted for 50 percent of the revenue, while the top 20 subscriber leaders represented just 30 percent of subscribers.

Wednesday, July 04, 2012

How High-End Home Networking Devices will Evolve

According to the latest market study by Infonetics Research, the increased adoption of connected consumer electronics devices -- and various other Internet-enabled devices within the home -- creates exponential demand for high-speed local area networks.

"Media tablets, connected TVs, digital media players, and a growing list of other devices are driving sales of home networking devices, and this is nowhere more apparent than in North America, which captured 37 percent of networking device revenue in 2011," notes Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.


Infonetics has forecast that the demand for broadband peripherals -- especially those with integrated MoCA chips -- will continue to increase globally as broadband service providers in all regions launch new home automation, energy management, entertainment, and communications services that require high-end networking devices.

I anticipate that the upside for new high-speed Wi-Fi routers will grow rapidly as more consumers stream HD and Ultra-HD video content to their primary large flat-screen TV sets.

Highlights from the latest market study include:
  • Global sales of home networking devices grew 20 percent in 2011 from 2010, to $7.98 billion.
  • Infonetics expects a cumulative $43 billion to be spent on home networking devices over the 5 years from 2012 to 2016, as the growth of tablets and other devices in home networks necessitate additional connectivity options.
  •  MoCA (multimedia over coax) embedded set-top boxes (STBs), FTTB optical network terminals (ONTs), coax-Ethernet adapters, and WiFi broadband routers are driving growth in home networking device market.
  • Cable operators and telcos in North America, especially Verizon, are increasingly using MoCA devices to deliver services like whole-home DVR.
  • D-Link extended its revenue share lead in the highly competitive broadband router market, followed by NETGEAR and Cisco.

Tuesday, July 03, 2012

Why the Global PC Market Outlook Remains Dim

The worldwide personal computer (PC) market is forecast to grow at 5 percent year-over-year in 2012. According to the latest market study by International Data Corporation (IDC), nearly 383 million PCs will ship into the market this year.

That's a slight improvement over the tepid growth seen in 2011 -- as PC sales continue to falter amidst intensifying competition from alternative devices and a highly volatile global economy.

In addition to rising consumer saturation in mature regions, economic uncertainty -- as well as the anticipated launch of Microsoft Windows 8 -- and growth of competing media tablet devices are the key factors affecting the market outlook.

With the threat of a relapse into recession in several markets adversely affecting public spending and business confidence, the 2012 forecast for several key segments has been reduced -- especially among small and medium-sized firms.

IDC believes that Windows 8 could help to reinvigorate a consumer market that has lost a degree of enthusiasm in recent years. But then again, given Microsoft's ambiguity, many open-ended questions remain -- such as the release date, meaningful information about functional capabilities, and pricing -- that will likely limit demand for the new operating system (OS).

Consumer PC shipments are expected to see modest growth in 2012 with the revamp of a sleeker Wintel platform fueling additional growth in 2013 through 2016. IDC expects the forecast period to culminate with total PC shipments topping 528 million units in 2016.


"Consumer sentiment could be revived with UltraBook or Ultrathin systems -- provided the right price is reached. More price-cutting in the Android tablet landscape could free up some budget for PC purchases, but could also focus consumers on media tablets rather than PCs," said Jay Chou, senior research analyst with IDC.

IDC continues to have a conservative view toward PC purchases in mature markets, which are generally expected to return to growth mode in 2012 after a contraction in 2011. Meanwhile, headwinds from the Euro crisis are increasingly being felt in the emerging markets, the previous stalwarts of growth.

The outlook for emerging markets has become more mixed with Central Europe, Middle East and Africa (CEMA) increasing its outlook while Asia/Pacific (excluding Japan) and Latin America will experience slower growth in the short term.

From my perspective, I'm not at all encouraged by the upside potential for Intel UltraBook or AMD Ultrathin branded notebook PCs. Both are handicapped by the legacy of Microsoft OS known limitations.

Moreover, given the content of the current marketing campaigns for both brands, I predict that it will continue to be difficult to convince prospective buyers that these notebook PCs are a good value.

Monday, July 02, 2012

China Invests $58B in Economic Stimulus Package

Infonetics Research released excerpts from its latest market study of global service providers, which analyzes telecom operator revenue and capital expenditures (capex); forecasts capex by operator type, region, and telecom equipment segment; and provides insight into important telecom spending trends.

"We're expecting a telecommunications capex hike in 2012, as operators around the world ramp their spending like crazy to launch LTE networks, modernize their mobile networks, and carry out national wireline broadband initiatives, said Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

According to the Infonetics assessment, network operators must invest in their networks or they'll suffer the consequences -- after all, worldwide competition for telecom leadership is very intense. And, this twenty-first century infrastructure is a key lever for sustained national prosperity and growth.

What's driving the latest round of network construction and enhancements? High demand everywhere for telecom services, particularly mobile broadband, is fueling the latest investment cycle.

The key capex contributors in 2012 will be Clearwire, Sprint, and T-Mobile USA in the United States; NTT DoCoMo and Softbank Mobile in Japan; and KT, LGU+, and SK Telecom in South Korea. Moreover, some nations have a more cohesive telecom investment strategy.

China recently revealed a $58 billion economic stimulus package to fund yet another round of investment in telecom infrastructure. They're taking the opportunity -- during the current global economic downturn -- to invest strategically now, and thereby position the nation for a leadership role in the global networked economy.

Meanwhile, Europe's Big 5 service providers have increased capital intensity by 2 percentage points for the first time in 5 years -- right in the middle of their regional economic downturn.

As for Latin America, operators already have led a huge investment burst, with capex there up 25 percent in 2011, led by America Movil and Telefonica.

Other highlights from the market study include:
  • Global telecom carrier capex grew 3 percent to $301 billion in 2011 from 2010.
  • Spending on every type of network equipment grew in 2011, with the exception of TDM voice, which continued its steep decline.
  • Asia Pacific was again the largest telecom carrier capex region, followed by EMEA (Europe, Middle East, Africa).
  • Infonetics expects worldwide capex to spike in 2012, then level out in 2015 and 2016 at around the $345 billion mark.
  • Wireless operators' share of capex is forecast to grow from a quarter to nearly a third of global capex between 2012 and 2016, as the world continues to go mobile.
  • Telecom service provider revenue grew 6 percent, to $1.8 trillion worldwide, in 2011 over 2010.
  • Operators in Asia Pacific and EMEA are the largest revenue producers -- with each region generating about a third of the overall global revenue.