Digital Lifescapes

Laptops And Home Networks Transform Behavior -- According to a recent study by Forrester Research, households that own a laptop computer and a home network are on the frontier of online activities. These advanced consumers spend twice as much time online as all dial-up households, are three times more likely than broadband-only households to go online in the living room, and watch an hour and a half less TV per week than the average household. With this group swelling from 4 million to 30 million households in the next five years, the cumulative effect on shopping, media consumption, and services will be dramatic.

The International Telecommunication Union (ITU) officially approved the very-high-bit-rate digital subscriber line 2 (VDSL2) standard. The new VDSL2 Recommendation (ITU-T G.993.2) delivers up to 100 Mbps both up and downstream, a ten-fold increase over "plain vanilla" ADSL. Yoichi Maeda, chairman of the ITU Telecommunications Standardization Sector (ITU-T) Study Group responsible for the work, said: "We have leveraged the strengths of ADSL, ADSL2+, and VDSL to achieve the very high performance levels you will see with VDSL2. This new standard is set to become an extremely important feature of the telecommunications landscape, and is a landmark achievement for our members, many of whom are relying on this Recommendation to take their businesses to the next level."

RBOCs Entering the $50 Billion Multichannel Video Market Follow Different Product Development Strategies to Compete With MSOs -- According to Yankee Group, "Despite public statements to the contrary, we believe MSOs aren�t taking the threat of new competition lightly � and they shouldn�t: We estimate cable will lose subscribers at the rate of 0.5-1 percent per year. This is before the entry of new competition with a two-way network, with more bandwidth and potentially more advanced applications than the MSOs can provide. In the last 4 years, RBOCs have steadily lost residential wireline voice subscribers. Yankee estimates that about 4 percent of US households have dropped their wireline phones. In addition, a growing number of voice minutes are shifting to wireless. We expect traditional wireline voice revenue to decline by approximately 24 percent in the next 4 years. Alternative voice providers, including MSOs, will be important drivers of this revenue erosion. We anticipate tha...

According to Pyramid Research, mobile number portability (MNP) was first instituted in the U.S. on November 24, 2003 � a date wireless carriers feared most. U.S. mobile operators braced themselves for what they expected to be one of the largest challenges within their industry. Eighteen months after its introduction, number portability has been more of a lumbering elephant and less of a roaring lion. At the onset, the FCC, wireless operators, and many industry analysts expected 30 million subscribers to transfer their wireless number within the first 12 months of MNP�s introduction. Only 7.8 million actually did. The top five national carriers have all added customers during this time, with AT&T/Cingular growing by about 5 percent on the low end, and T-Mobile growing by more than 33 percent on the high end. Overall, Verizon Wireless and T-Mobile have been the biggest winners as they have focused on improving network quality and customer service. However, the new Cingular may soon ...

Among males aged 13-34, music is the most appealing wireless multimedia service, followed by mobile TV and video, and multiplayer 3D gaming, according to a 1,000-participant survey conducted by The Management Network Group. The study also found that 40 percent of respondents said they would be receptive to mobile video clips that were free to watch but required them to also view multimedia advertisements, while under 20 percent were interested in mobile video monthly subscription services. Thirty-five percent of respondents reported strong interest in downloading music to their cell phones, while 21 percent were very interested in mobile multiplayer games. "The new generation of consumers is demanding greater choices, a more personalized telecommunications experience and will influence the direction that carriers will need to take as 3G and future mobile technology is delivered to the marketplace," said TMNG chairman and CEO Rich Nespola.

Demand for Personal Video Recorder (PVR) products increased tremendously during the past year, as unit shipments rose from 4.6 million in 2003 to over 11.4 million in 2004, reports In-Stat. This demand stems from increased consumer awareness about the concept of time-shifting television programming, and both pay-TV service providers and PVR product manufacturers are reaping the benefits. PVR service providers, led by companies like TiVo and EchoStar, also enjoyed a banner year, as total worldwide households subscribing to a PVR service increased from 3.6 million in May 2004, to over 9.2 million in May 2005. North America remains the largest market for PVRs, followed by Japan. In 2004, the two regions accounted for 88 percent of total worldwide PVR product unit shipments. Worldwide PVR product revenues have also risen rapidly, increasing from $2.1 billion in 2003 to over $4.3 billion in 2004. A recent US consumer survey revealed that most PVR users are highly satisfied with their PVR se...

The number of Americans with large video files stored on their PCs rose from 8 percent last year to 13 percent in March 2005, according to a survey conducted by market research firm NPD Group. Of the 13 percent who had a 150MB video file on their computers -- about the size of a half-hour TV show -- each additionally had an average of 15 such files on their PCs. "What will trouble many, especially in the film and video industry, is that some consumer collections include material that is clearly pirated," said NPD analyst Russ Crupnick. "In March, we noted several dozen full-length theatrical films on computers well before their expected DVD release date, including Ocean's Twelve, Lemony Snicket's A Series of Unfortunate Events, Million Dollar Baby, The Aviator, The Ring Two, and Team America World Police." NPD plans to launch an ongoing PC survey of 40,000 panelist volunteers called MovieWatch Digital in the fourth quarter of 2005, which will monitor consum...

Strategy Analytics predicts a market of more than 20 million WiMAX subscriber terminals and base stations per year in 2009, according to their recent study. The need for inexpensive last mile connections between users and high-speed backbone networks already deployed in the developing world will drive this demand. Although much smaller than the market for cellular terminals and base stations in terms of annual unit shipments, WiMAX will represent a significant opportunity for chip makers. According to Chris Taylor, Director of the Strategy Analytics RF & Wireless Component Service (RFWC), "Our analysis of provisioning costs, business models and demand leads us to conclude that WiMAX for fixed wireless broadband services alone will generate a modest but healthy market for chips and equipment by 2009. Major concerns still remain regarding battery life for mobile WiMAX, undefined mobile specifications, and probable competition with 3G and proposed 4G networks. However, these issu...

The home networking arm of CEA was hard at work, approving two new standards. CEA-851-A defines an IP-enabled network for connecting cluster networks to a whole-home broadband distribution backbone in order to facilitate integrated operation of appliances and networked components. Based on IEEE 1394, this network will accommodate Ethernet as an attached network via a bridge, and directly with the introduction of IEEE 1394c. Called the versatile home network , it provides a flexible and open network architecture and communications protocol specification for digital devices in the home. CEA-2027-A defines a user-to-machine interface method that allows a source of home-network services, such as a cable or terrestrial set-top box, digital VCR or DTV, to utilize the presentation capabilities in a network-attached renderer such as a DTV display or PC. The standard enables user control of networked devices (either local to the user or remote) via another device�s (e.g., DTV or PC) Web browser...

IP Multimedia Subsystem (IMS) is about to revolutionize the telecom market. According to ABI Research analyst Ian Cox, "Every Tier 1 service provider in fixed and wireless networks will announce SIP-based services running over IMS in the next six to twelve months." IMS began life as a wireless network architecture for adding IP-based services to existing circuit-switched voice. When Session Initiated Protocol (SIP) was introduced, IMS evolved to an open architecture: operators are not locked into a proprietary solution, nor are point solutions needed for each service. Soon fixed network providers began adapting it to IP networks. IMS allows a single device to use both fixed and wireless networks. IMS will allow many new services, including VoIP, to be offered simultaneously over SIP-enabled networks. Vendors can develop applications and equipment knowing they will be fully interoperable. Services can be tried quickly and discarded if unpopular. A single database holds all su...

TV Ad Technology Vendor Profile: TiVo -- According to Forrester Research, TiVo's digital video recorders are popular, in part because they allow consumers to skip commercials easily. But even as its users gnaw away at television's traditional business model, TiVo offers advertisers an alternative. Behind its network of consumer devices, TiVo has deployed an advertising system that is based on voluntary viewing of long-form video advertisements. Today, the system has a limited reach of approximately 3 million subscribers and, unlike the vendors of most other ad systems, TiVo sells its own inventory. Both the reach and the sales model for these ads are likely to change in light of TiVo's recently announced deal with Comcast.

Telcos Need More Than TV And Broadband For ROI -- According to Forrester Research, Telcos, faced with a growing list of competitors and rising capital expenses, are looking to TV services to offset shrinking core revenues. But even coupled with voice and broadband Internet services, TV revenues will not recoup the costs of a multi-billion dollar broadband upgrade. Telcos will need to add a myriad of other services like home security, network-based storage, and video surveillance services to make a profit. Telcos core voice and data businesses have taken a beating. The mean monthly spend on local services has stagnated at $29.17 down from $31.70 in 2003. Monthly long distance spending has fallen from $18.33 to $12.75 during the same time. It will get worse, because VoIP promises to drive prices closer to $30 for unlimited local and nationwide long distance.

Voice: The Biggest Slice of the Triple Play -- Increasingly service providers are pursuing a larger share of consumers' wallets and are doing so by selling a bundle of services. Rather than selling their traditional services, voice or cable, providers are crossing over to sell a full set of services including voice, video, and data. This triple play of services is also becoming increasingly attractive to consumers who are interested in the convenience and cost savings that are available through such offerings. According to In-Stat, total consumer spending on communication services, including local voice, long distance, cable TV, dial-up, and broadband was $114.8 billion in 2004. The largest revenue opportunity of this total wallet was voice services, with local and long distance combined accounting for more than 50 percent of revenues. Over time, service revenues are expected to deteriorate, falling to $106.7 billion in 2009. This decline in revenues is a factor of decreasing reve...

Total global revenues from mobile games are forecast to increase from $2.6 billion this year to $11.2 billion by 2010, according to Mobile Games , a new strategic research report from Informa Telecoms and Media. Downloads will account for around two-thirds of total global revenues through 2010, but online multiplayer traffic will start to generate significant income for mobile operators, as cellcos launch more multiplayer games and introduce community features that will encourage user uptake. By 2010, online multiplayer games will generate 20.5 percent of total global revenues. "The Asia-Pacific and Europe will continue to dominate the global mobile gaming market in terms of revenues and users," says Pamela Clark-Dickson, co-author of the report. "However the U.S. is set to become the second largest individual market by revenues and users, behind Japan and China respectively, by 2010." Meanwhile the mobile games industry still has work to do to encourage mass-market...

A new report from Point Topic provides an overview of the key trends in DSL and cable modem tariff benchmarks for 18 leading DSL and 16 cable modem operators around the world. The main body of the report analyses fluctuations in DSL prices since March 2000, cable modem prices since June 2003 and makes comparisons between both technologies where possible. Key highlights of this report include: DSL 'entry level' monthly rental prices registered an average 30 percent fall since March 2000, based on a review of monthly rentals offered by a leading set of 18 DSL operators. Monthly rentals for 'entry level' cable modem services fell on average by 21 percent between June 2003 and March 2005, compared to a modest 12 percent fall for DSL operators for the same period. A Purchasing Power Parity (PPP) analysis shows that Europe is becoming cheaper both for DSL and cable modem services than North America, with the Asia Pacific region the cheapest for DSL overall.

According to a Jupiter Research report, "Video on Cell Phones: It's Real in 2005, but a Paying Consumer Audience Isn't," 44 percent of online consumers surveyed are interested in viewing video on their cell phones for free, but only 19 percent indicate they would be willing to pay anything for those services. Wireless carriers in the U.S. have launched mobile video applications demonstrating both the progress and the potential of the technology. The Jupiter report also finds the lack of network coverage, high prices for both handsets and service, and limited access to real time content, however, will dampen consumer interest in the near term. "Although consumer interest in mobile video is strong, the cell phone will remain a voice-centric device in the near term," stated Julie Ask, research director at Jupiter. "Only 4 percent of consumers cited the ability to watch video as a priority feature for them when purchasing their next handset. Carrier subsidi...

Networked Broadband Households to Top 160 Million & Network-Connected Devices to Approach 1 Billion by 2010 -- According to new research from The Diffusion Group, global home network adoption is expected to grow from 35 million in 2004 to more than 162 million in 2010. This growth will be fueled in large part by broadband service providers who are beginning to push combined modem/networking solutions known as residential gateways (RGWs) into the homes of new broadband subscribers. TDG also forecasts that the number of network-connected devices will grow from 108 million in 2004 to just under 1 billion by 2010, growing from an average of approximately three networked devices per household in 2004 to approximately six devices by 2010. Despite the relatively tepid pace of global network adoption, home network penetration is nonetheless expected to reach millions of homes in Asia, Europe, and North America via service provider push strategies. Such push strategies will help drive sign...

A recent survey of 13,000 consumers in 13 countries found that more than 20 percent of respondents said they spend up to half of their leisure time playing video games. Conducted by market research firm GMI, the poll found 30 percent of those surveyed in India and 20 percent of respondents in Mexico spend up to half of their leisure time playing games, compared with respondents from the U.S. (24%) and Germany (24%). Eighty percent of all consumers surveyed said they believe people will spend more time playing video games over the next ten years. "Relatively unexploited markets in Latin America and in Asia such as India offer new growth to the videogame industry," said analyst Billy Pidgeon. While 58 percent of consumers overall don't think games are a good form of social activity, this thinking is reversed in India and Mexico, where 4 percent and 64 percent of those surveyed, respectively, play games to socialize -- compared with other nations like the Netherlands and Fra...

According to Informa Telecoms & Media, the number of mobile subscriptions worldwide will reach 2.14 billion by the end of 2005, having already surpassed the 1.8 billion mark. Building on record growth of 354 million in 2004, net additions are again expected to exceed 350 million in 2005. Rapid growth in key developing markets will not be offset by a decline in mature markets to the extent previously expected. Reductions in access fees in expanding markets such as Nigeria and Mexico have had an impact on short-term growth. The Russian mobile market grew by 89 percent in 2004 on the back of four previous years of annual growth in excess of 100 percent, and Russia alone is forecast to account for 43 percent of net additions in Central and Eastern Europe in 2005-2010. The Chinese mobile market, which exceeded the 400-million-subscription mark in March 2005, is forecast to grow by 65 percent by the end of 2010. Indonesia is forecast to exceed 50 million subscriptions in 2007. According ...

The BBC announced that it has begun to trial a new program download technology in 5,000 U.K. households that could pave the way to endless TV repeats -- The BBC said it hoped to deliver its interactive Media Player (iMP), or "iTunes for the broadcast industry", by year's end, allowing viewers to download any shows from the previous week. Once up and running, the service, currently in its second stage, will make around 190 hours of TV shows and 310 hours of radio programs available for legal downloading across the U.K., the BBC said. "iMP will allow our audience to access our TV and radio programs on their terms -- anytime, any place, any how," said Ashley Highfield, BBC director of new media and technology. "We'll see what programs appeal in this new world and how people search, sort, snack and savor our content in the broadband world." Increasing numbers of people are using the internet to access audio visual material, but Mr. Highfield has warned...