Digital Lifescapes

Total U.S. advertising spending is expected to increase 2.6 percent in 2007 to $153.7 billion, according to the full-year forecast released by TNS Media Intelligence. This anticipated tepid gain is the smallest since the media economy emerged from its 2001 recession and follows estimated advertising spending growth of 3.8 percent in 2006. Advertising expenditures are forecast to increase by just 2.1 percent in the first half of 2007 followed by a gain of 3.2 percent in the second half, paralleling an expected late year uptick in overall economic activity. "Our outlook for 2007 is tempered by the absence of two biennial advertising events, the Olympics and federal elections, which tend to contribute an incremental 80-100 basis points to growth rates," said Steven Fredericks, President and Chief Executive Officer...

At the International Consumer Electronics (CES) event, AMD announced new products, OEM reference designs and software for its LIVE! initiative. Part of the CES announcements included the AMD LIVE! Home Cinema entertainment system. "The last time I wrote about AMD LIVE! and Intel Viiv, I gave AMD credit for not actively pursuing living room PCs. That has changed," says Carl Gressum, Senior Analyst at IT research firm Ovum. "In my opinion, AMD should focus on what it does well -- semiconductors -- not on developing living room PCs." With the advent of the Windows Media Center OS, PC vendors sought to create a new category of PCs aimed at the living room. The idea was to sell high-end PCs in alternative form factors to make them more acceptable in the living room space, be connected to the television and be the center for digital media and TV viewing. Not only could a vendor sell a normal desktop or notebook PC, but also a living room PC, to the same consumer. Products...

The good news for the semiconductor sector is that 2007 will represent the peak year of its present growth cycle, with double-digit growth expected. The bad news for the semiconductor industry in 2007 is that due to the changing dynamics of the business, growth will amount to only 10.6 percent for the year -- far below historical market peaks. Worldwide semiconductor revenue will expand to $285.8 billion in 2007, a 10.6 percent rise from $258.5 billion in 2006. This compares with the iSuppli newly revised forecast of 9 percent semiconductor growth in 2006. After 2007, growth will decelerate to 8.7 percent in 2008 and then bottom out at 3.7 percent in 2009, before bouncing back to a 7.4 percent rise in 2010. While some industries would be satisfied to achieve 10.6 percent growth, it represents a moderate rise for a semiconductor business that has seen expansions as high as the 30 to 40 percent range during its best years. However, the mild peak comes with a benefit: global semiconductor...

The market analysts at iSuppli have apparently been busy pulling together their end-of-year assessment, and here's the outcome. Now that the broadband era is upon us, the technology and telecommunications industries are shifting their focus beyond access, to content. Frankly, it's about time. "Over the last three years, broadband has become ubiquitous, both in the wired and wireless worlds," said Mark Kirstein,vice president of multimedia content and services at iSuppli Corp. "Worldwide broadband subscribers have reached 248 million, while the number of 3G wireless subscribers passed 1 billion at the end of 2006. The electronics industry now is turning its attention to delivering the high-value applications and content that will capitalize on these fast access networks." The implications of this are huge, as virtually all technology markets are being driven by media distribution in an underlying fashion. Examples include: - Portable Media Player (PMP/MP3) sh...

The eye-catching big video displays have a true 'wow factor' -- they are all over and throughout the entire CES conference, reports iSuppli. YESCO is a company that brings the majority of these signs to the Vegas strip and around the world. An example of displays that may soon be replacing billboards on U.S. freeways is a 135-foot YESCO sign that features a 100-foot by 50-foot concave, with a double-faced Light Emitting Diode (LED) message center and a visual moving virtual eraser. iSuppli predicts that by 2010, 75,000 billboards -- or 15 percent of total billboards in the U.S. -- will be digital displays, up from a mere 500 digital billboards, or 0.1 percent, of all billboards in 2006. This technology has several names -- digital billboards being one of them -- electronic billboards, dynamic signage, narrow-casting, data casting, electronic display networks, digital in-store merchandising displays, out-of-home media networks, employee TV, captive audience networks or digital m...

The number of broadband lines in the UK reached 13.1 million by the end of 2006, adding more than 3.1 million new lines in the year, according to Point Topic. This is a disappointment for many broadband service providers, as growth declined 20 percent compared with 2005. Delays in meeting the demand for 'free' bundled offers and the task of transferring over 1 million lines to Local Loop Unbundling (LLU) have both contributed to the drop in new broadband connections. "We believe that internet service providers have the chance to do better in 2007 though," says Tim Johnson, CEO Point Topic. "Our latest survey shows there is still a big latent demand for broadband in the consumer market." For example, more than 20 percent of the 10 million UK households currently without any internet access say they are 'very' or 'fairly' likely to go online in the next 6 months. Ninety percent of these say they would go straight to broadband, representing 1....

According to Ovum, the 437 million mobile phone users in China undeniably make it the world's most promising market for wireless value-added services (WVAS), and the market will grow at a very dynamic and robust pace in the years ahead. With data contributing 21 percent of total mobile service revenues by June 2006, Ovum forecasts that WVAS will generate over $11.5 billion revenues in China by 2010, a 48 percent surge from 2006. Kevin Lee, a Senior Analyst with Ovum based in Hong Kong, says "Messaging will continue to dominate the WVAS sector, contributing to over 63 percent of total VAS revenues in 2010." According to Lee, the advent of new media services including mobile music, games and mobile TV, primarily assisted by the high consumption of bandwidth will change the current market scenario. Lee explains, "The growth of the wireless value-added services market in China will likely be driven by the latest change of VAS policy, availability of converged terminals, ...

The aim for websites of broadcast television networks is to drive visitors to their flagship broadcast channels -- as well as to grow revenue from online advertising. JupiterResearch analyst Todd Chanko says another strategic goal should be establishing relationships with medium and smaller advertisers that don't ordinarily buy network TV commercials. Automobile companies -- historically the major advertisers in broadcast TV -- are cutting ad budgets and shifting spending quickly to new media. Website advertising so far represents just a trickle of revenue to broadcast TV networks -- an advantage in attracting advertisers with modest ad budgets. ABC Television is reportedly charging $100,000 for placing a single ad buy across a range of videos on their ABC.com site over a three-month period. That sum couldn't even purchase a single prime-time commercial during the regular TV season, as Kagan Research estimates a 30-second spot averaged $168,320 in 2005 on the 'Big Four'...

Across the tech vendor community, approximately 50 percent of marketing investment is allocated to demand generation and about one-third of that investment is ear-marked to directly support the sales force. New research from IDC shows that, for most vendors, this complex and expensive intersection of marketing and sales remains very much a 'work in process.' However, IDC observes pockets of excellence that are emerging as executives are starting to come to grips with the escalating costs of selling and marketing in today's tech industry. According to IDC's Chief Marketing Officer (CMO) Advisory Practice -- which undertook a study evaluating which IT vendors have demonstrated best practices in lead management process development and execution -- marketing's lead management process at a majority of tech vendors fails to provide even the most basic need of establishing a consistent global definition of a lead. Other failure points include data collection, lead qualific...

Not exactly surprising news -- Apple iPhone

With a massive surge of consumer Internet users in recent years, the online gaming market has a bright future in the Asia/Pacific region, according to In-Stat. If you are searching for momentum in online gaming growth, then look to the Orient. Total online games market revenues for Asia/Pacific in 2005 stood at $3.2 billion and will rise to $6.8 billion in 2010, the high-tech market research firm says. "The increase in speed and consistency of Internet connections provided by ISPs and telecom operators continues to greatly facilitate development of online gaming," says Bryan Wang, In-Stat analyst. "Online games are no longer restricted to slow-action strategy games." Clearly, European and North American broadband service providers can learn much from the success of their Asia/Pacific peer group -- who have decisively moved beyond the passive 'speeds and feeds' marketing approach, and risen to the interactive realm of consumer engagement. In-Stat's study ...

In the words of any self-respecting leader from an autocratic company culture fashioned in the glory days of the mass-market, "it's either my way, or it's the highway." That's the kind of bean-counter bravado that Wall Street conceived, nurtured and ultimately rewarded. Now those same market analysts that cheered-on that mindset are questioning it today. Why the change of heart? Perhaps one good case study in the tech sector is the rise and stall of the Dell marketing machine. In February of 2006, Business Week published an editorial entitled " It's Dell vs. the Dell Way ." Nearly one year later, a current assessment sheds light on a growing dilemma for the mass-market oriented American enterprise. People that get very angry at Dell, for unresolved customer care and technical support issues, tend not to understand the company's core business model, or the company's longstanding culture that's sometimes called "The Dell Way."...

Informitv reports that UK satellite pay-TV service provider BSkyB now has over two million Sky+ digital video recorder (DVR) boxes installed. Sky plans to allow recordings to be activated over the web, and to introduce 'push' video-on-demand services. The company also released new research on how Sky+ affects viewing behavior. In Sky+ households, time-shift record and replay accounts for 22 percent of all viewing of programs originally scheduled between 9pm and 10pm and 17 percent of those scheduled between 10pm and 11pm. Across all channels, time-shifting accounts for just over 12 percent of total viewing through Sky+ boxes. Drama programs accounts for nearly 40 percent of all time-shifted viewing, followed by documentaries at just under 15 percent, entertainment at 13 percent and movies at 9.5 percent. Current affairs programs accounts for just 1.2 percent while news and weather represent just 0.6 percent of time-shifted viewing. Nearly a third of viewing of the 'Fox FX...

A spate of corporate acquisitions is redrawing the competitive landscape in the world of IPTV and telco TV, with far-reaching consequences for all members of the IP video ecosystem. The announcement that Motorola would acquire Tut Systems was just the latest in a similar series of moves that included Ericsson's acquisition of Redback Networks. According to ABI Research principal analyst Michael Arden, the pool of independent IPTV solutions vendors keeps on shrinking, creating a market gap which will affect smaller telecom service operators. "Those first IP video equipment providers were small startups creating cutting-edge technologies that the larger vendors weren't nimble enough to do themselves," says Arden. "Lately, as IPTV technology becomes more important -- not only for telco TV but also for cable and satellite -- the big companies need those technologies, and they are going out and acquiring the small companies that were the first ones in the market....

What does a legacy communications or consumer electronics leader have in common with the Ford Motor Company? On the surface, very little. But, when you dig deeper into Ford's current business challenges, there are valuable 'lessons learned' worthy of comparison. U.S. business school case studies that profile Ford often include three related topics, the establishment of mass-production methods, the Model-T automobile innovation, and the Ford Edsel anticlimax. Each stage of the historical Ford storyline forms the foundation for current-day mass-marketer thinking -- we know what customers want, and it looks just like this, period. How does that mindset carry-over into the 21st Century? AP reports that the challenge from Ford Motor Company's top brass was daunting: Take an old car and a bland one and make them better. Don't change their basic frames and footprints, but make them look and feel new. And by the way, the future of the company is at stake, because if they do...

Factory-to-dealer sales of consumer electronics are projected to exceed $155 billion in 2007, or seven percent growth, according to the semi-annual industry forecast released by the Consumer Electronics Association (CEA). By comparison, the consumer electronics (CE) industry had revenues totaling $145 billion in 2006. According to the CEA, the display category will continue to fuel industry growth in 2007. The TV market is setting all-time revenue records. CRT-based sets are giving way to flat panel displays. The successful ongoing transition to digital television is driving demand in this market space. CEA projects that display technologies will continue to be the star category in the industry and account for $26 billion in revenues for 2007. All television sets manufactured today with an analog tuner must also contain a digital tuner, which is largely responsible for the vast increase in digital television sales. Unprecedented price declines in plasma and LCD displays are also contri...

Cable TV is advancing as Wall Street bid up cable company stocks 61 percent in the past year, far above the 12 percent gain in the broad market. That's why cable MSOs are under the oversight microscope, once again. Most conspicuously, the Federal Communications Commission voted last month to require states and cities to act within 90 days on franchise applications, in a victory for telephone companies wishing to launch rival pay-TV services. The FCC action is among a half dozen setbacks for cable, according to Kagan Research. "Cable has been playing defense for over a decade and generally fared well, when taking the long view," notes John Mansell, senior analyst at Kagan Research. "Certainly cable has incurred its fair share of setbacks at the FCC and in court cases, but it has been spared what would be large reversals on other issues." Mansell notes cable has beaten back efforts to require carriage of all digital broadcast TV channels (known as multicast must-c...

Yet another wireless sector analyst laments about how the broadband service providers are using a Gucci-like marketing model, unsuccessfully -- keeping prices high and making product availability scarce. However, I wonder if perhaps this strategy is intended to limit new subscriber sales, so that these unproven data networks aren't overloaded by the few subscribers that actively use them. Maybe carriers are trapped in the early-adopter stage of market development by severe technical limitations. More wireless network operators are deploying HDSPA technology to significantly boost data rates for subscribers, but most carriers haven't adjusted their pricing schemes to make high-speed wireless data more attractive to users, according to a new worldwide mobile data service price report from Light Reading. With almost 90 commercial networks launched in 2006, HDSPA is driving a vast change in wireless data rates from peaks of 300 kbit/s per user with regular 3G services to almost 3 M...

As you may recall, China surpassed the U.S. in total DSL broadband subscribers last year. Now according to Pyramid Research, China Mobile became the most valuable listed mobile operator with the world's largest subscriber base in 2006, moving ahead of UK-based Vodafone Group Plc, which had previously held the crown. China Mobile closed the third quarter of 2006 with more than 287 million subscribers in China, while Vodafone reported a total of nearly 192m across its properties around the world. China Mobile's move into the top spot further illustrates where to expect the next billionth customer. Of the 472 million new subscribers in 2006, 87 percent come from emerging markets -- developing markets in Asia account for 44 percent of all new customers, and Africa/Middle East is estimated to have 2.4 times as many new subscribers as Western Europe. The pattern holds true for the next five years -- emerging markets will attract more than a billion new customers between 2007 and 2011...

Sales segmentation is a 'vital first step' in building a platform for more profitable and efficient sales strategies, according to a study by IDC. Their research indicates that for companies who make the investment in thoughtful, and thorough, data-based sales segmentation policies and practices, the payoff will be substantial. "Simply put, the goal of sales segmentation is to identify the unique needs of groups of customers and to efficiently serve those needs," said Lee Levitt, director of IDC's Sales Leadership Board. "Some customers require extensive hand-holding and large account teams. Other customers expect specific industry expertise from their account manager or account team. Smaller accounts must be served efficiently by territory account managers covering 30-50 accounts or by channel partners." Feedback from IDC survey research participants shows that customer buying dynamics and support requirements vary by segment, and an effective sales seg...