Print this articleDespite turmoil in world financial markets over the last year the trillion dollar mobile communication industry continues to confound expectations with spectacular accelerating growth.
A new market study by Portio Research reveals that over half the world now uses a mobile phone and predicts that 80 percent of the world's population will be doing so by the end of 2013 -- a staggering 5.8 billion people.
Among the top 20 growth markets ranking list (2007-2013) there are few surprises. China wins the top spot, just ahead of India. These two countries are expected to contribute over 1 billion additional subscribers during this time.
Brazil comes in a distant third with 132 million additional subscribers over the same period. Africa, the Middle East and Latin America, are also expected to experience high growth estimated at CAGR 13.3 percent, 10.7 percent and 9.9 percent, respectively.
Meanwhile despite rising worldwide mobile voice and data revenues mobile ARPU continues to decline and is predicted to fall from $23.2 in 2005 to $15.8 by the end of 2013, largely because additional subscriber growth is likely to come from low per capita income markets.
Portio's report provides a comprehensive breakdown of mobile handset market share, Nokia is still in the lead shipping over 437 million handsets during 2007, while Samsung has displaced Motorola from the number two spot. In the first two quarters of 2008 LG displaced Sony Ericsson from the number four spot.
"In 2006 we predicted that over half the world would be using a mobile phone by 2009 thought by many to be wishful thinking at the time," said John White, Business Development Manager at Portio Research.
"Despite this the mobile industry achieved this milestone early in 2008 and continues to be a beacon of good news amid the daily gloom and doom of the last year. This report suggests that this will continue."
A new market study by Portio Research reveals that over half the world now uses a mobile phone and predicts that 80 percent of the world's population will be doing so by the end of 2013 -- a staggering 5.8 billion people.
Among the top 20 growth markets ranking list (2007-2013) there are few surprises. China wins the top spot, just ahead of India. These two countries are expected to contribute over 1 billion additional subscribers during this time.
Brazil comes in a distant third with 132 million additional subscribers over the same period. Africa, the Middle East and Latin America, are also expected to experience high growth estimated at CAGR 13.3 percent, 10.7 percent and 9.9 percent, respectively.
Meanwhile despite rising worldwide mobile voice and data revenues mobile ARPU continues to decline and is predicted to fall from $23.2 in 2005 to $15.8 by the end of 2013, largely because additional subscriber growth is likely to come from low per capita income markets.
Portio's report provides a comprehensive breakdown of mobile handset market share, Nokia is still in the lead shipping over 437 million handsets during 2007, while Samsung has displaced Motorola from the number two spot. In the first two quarters of 2008 LG displaced Sony Ericsson from the number four spot.
"In 2006 we predicted that over half the world would be using a mobile phone by 2009 thought by many to be wishful thinking at the time," said John White, Business Development Manager at Portio Research.
"Despite this the mobile industry achieved this milestone early in 2008 and continues to be a beacon of good news amid the daily gloom and doom of the last year. This report suggests that this will continue."
According to 3G Americas, mobile wireless technology is on the move throughout the Western Hemisphere. Specifically, the GSM family of technologies is showing explosive growth. At the end of 2Q 2008, there were 472 million subscribers in North, Central and South America.
In North America there is additional footprint coverage of high-speed broadband UMTS/HSPA by AT&T, Rogers Wireless, Telcel, T-Mobile USA and others.
With the expansion of broadband coverage and UMTS/HSPA technology capabilities driving enhanced data applications, many cellular operators are reporting an average of about 20 percent of ARPU from wireless data service.
The trend for mobile wireless broadband in the Americas is very positive. In July, the Pew Internet and American Project released a comprehensive study on internet usage in America. This Pew study showed DSL and cable continue to dominate home broadband products, and when you study the report closely, you'll see that wireless broadband has gone from zero in 2002 to capturing 12 percent of the market today.
This means that about one in eight Americans use wireless as their primary means of accessing the internet -- a figure that many would have thought highly unlikely several years ago. And, for good reason given the comparative price of these service offerings.
Mobile wireless technology in Latin America continues to make significant progress in affecting resident's lives economically, socially and politically. There are 33 commercial deployments of UMTS/HSPA broadband technology in 17 countries.
As of June 30, 2008, the Latin America and Caribbean region leads the Western Hemisphere with more total subscribers (417 million) than North America (284 million) as well as more GSM customers -- 354 million in Latin America, as compared to North America's 118 million.
Worldwide there are over 3.3 billion subscribers for the GSM family of technologies with 214 UMTS/HSPA commercial deployments.
In North America there is additional footprint coverage of high-speed broadband UMTS/HSPA by AT&T, Rogers Wireless, Telcel, T-Mobile USA and others.
With the expansion of broadband coverage and UMTS/HSPA technology capabilities driving enhanced data applications, many cellular operators are reporting an average of about 20 percent of ARPU from wireless data service.
The trend for mobile wireless broadband in the Americas is very positive. In July, the Pew Internet and American Project released a comprehensive study on internet usage in America. This Pew study showed DSL and cable continue to dominate home broadband products, and when you study the report closely, you'll see that wireless broadband has gone from zero in 2002 to capturing 12 percent of the market today.
This means that about one in eight Americans use wireless as their primary means of accessing the internet -- a figure that many would have thought highly unlikely several years ago. And, for good reason given the comparative price of these service offerings.
Mobile wireless technology in Latin America continues to make significant progress in affecting resident's lives economically, socially and politically. There are 33 commercial deployments of UMTS/HSPA broadband technology in 17 countries.
As of June 30, 2008, the Latin America and Caribbean region leads the Western Hemisphere with more total subscribers (417 million) than North America (284 million) as well as more GSM customers -- 354 million in Latin America, as compared to North America's 118 million.
Worldwide there are over 3.3 billion subscribers for the GSM family of technologies with 214 UMTS/HSPA commercial deployments.
More than six out of ten Chief Marketing Officers (CMO) and other senior marketing professionals surveyed in the U.S. said that digital tactics (including mobile) accounted for more than one-quarter of their agency marketing, according to a market study by Zoomerang for Sapient.
Respondents also said digital marketing was growing in importance. Nearly one-half (45 percent) of those polled had either switched agencies or planned to switch during the next 12 months to gain access to more meaningful digital expertise.
Almost eight out of ten said that agency interactive and digital aptitude was important or very important. But, the numbers just don't add up.
Since the Sapient sample involved fewer than 100 respondents, the results are most useful in a "directional" sense, but the amount of digital marketing (generally over 25 percent) CMOs reported seems high.
As a point of comparison, digital ad spending growth remains steep compared with other media, yet it still accounts for less than 10 percent of total ad spending in the U.S.
Translation: some CMOs are lying about their use of digital marketing in an attempt to hide their apparent laggard track record.
The other thing to note is that Sapient asked respondents about marketing activity, not marketing spending. Since e-mail is a relatively low-cost tactic, it can account for a great deal of marketing activity relative to its cost.
Gail Scibelli, vice president at Sapient, told eMarketer that some of the marketing professionals surveyed could have been including e-commerce initiatives in their estimates.
The datacenter network market reached $8.7 billion in 2007, up 17 percent from $7.6 billion in 2006, according to one of three new "Place in the Network" market studies published by IDC.
The IDC study shows that the datacenter network continues to support strategic initiatives, including customer migrations to new virtualized dense computing in the datacenter.
As a result, IDC predicts this market will continue to grow at a healthy 6 percent compound annual growth rate (CAGR), reaching $11.9 billion in 2012.
"The datacenter is in the midst of unprecedented change driven by a combination of factors all converging to make the datacenter a real-time responsive resource for organizations," said Lucinda Borovick, research vice president, Datacenter Networks.
"Our research shows that the datacenter network has an important and unprecedented role to play in the datacenter of the future as infrastructure changes, such as multicore processors and server virtualization combined with fundamental changes in utility cost structures, drive a shift in the very nature of datacenter buildouts."
In addition to the datacenter, the remote branch office is becoming one of the top network IT initiatives of the decade. According to another recent "Place in the Network" study, many enterprises see a strategic opportunity to provide value at the branch, as the closest point of contact to the customer.
IT organizations want to deliver resources to support branch office growth while keeping operational and management costs in check.
"Enterprises view the branch as a critical beachhead for IT to deliver business value to the enterprise. Remote branch networking revenue will reach $13.9 billion by 2012," continued Borovick.
In a third new study, Network Equipment Spending by Place in the Network, IDC presents an analysis of how and where end users are spending their data network equipment budget. Place-in-the-network shifts are creating opportunities for enterprise network equipment suppliers.
While most opportunities today remain in the core network, IDC believes that vendors should be aware of branch office and other remote user trends relative to teleworkers and temporary networks.
The IDC study shows that the datacenter network continues to support strategic initiatives, including customer migrations to new virtualized dense computing in the datacenter.
As a result, IDC predicts this market will continue to grow at a healthy 6 percent compound annual growth rate (CAGR), reaching $11.9 billion in 2012.
"The datacenter is in the midst of unprecedented change driven by a combination of factors all converging to make the datacenter a real-time responsive resource for organizations," said Lucinda Borovick, research vice president, Datacenter Networks.
"Our research shows that the datacenter network has an important and unprecedented role to play in the datacenter of the future as infrastructure changes, such as multicore processors and server virtualization combined with fundamental changes in utility cost structures, drive a shift in the very nature of datacenter buildouts."
In addition to the datacenter, the remote branch office is becoming one of the top network IT initiatives of the decade. According to another recent "Place in the Network" study, many enterprises see a strategic opportunity to provide value at the branch, as the closest point of contact to the customer.
IT organizations want to deliver resources to support branch office growth while keeping operational and management costs in check.
"Enterprises view the branch as a critical beachhead for IT to deliver business value to the enterprise. Remote branch networking revenue will reach $13.9 billion by 2012," continued Borovick.
In a third new study, Network Equipment Spending by Place in the Network, IDC presents an analysis of how and where end users are spending their data network equipment budget. Place-in-the-network shifts are creating opportunities for enterprise network equipment suppliers.
While most opportunities today remain in the core network, IDC believes that vendors should be aware of branch office and other remote user trends relative to teleworkers and temporary networks.
According to an ABI Research market study of online households in the U.S., the number of consumers watching online video streamed through a browser has doubled over the past year -- going from 32 percent a year ago to 63 percent today.
ABI believes this is due to growth in the amount of rich content available in ad-supported format on portals and through social networks, as well as increasing demand from consumers for video in both short- and long-form online.
"Consumers are changing their online habits quickly," says research director Michael Wolf.
"Broadband speeds have continued to increase at the same time that Hollywood has decided online distribution is a legitimate revenue opportunity that will increase total return on their video assets, and expand audiences. At the same time, easy to use content creation tools are being put into the hands of consumers and this has effectively created new forms of communication and entertainment."
All forms of content are contributing to the rise of broadband video consumption, including that of long-form TV shows, and much of the longer-form content today is being watched by younger viewers.
When asked if they watched long-form content in the form of TV shows or movies online, nearly half of those under 25, and 53 percent of those aged 25-29 indicate they do so once a month or more.
Older viewers are much more likely to have experimented once with online shows -- three quarters of those over 65 who watch video online responded that they have never watched TV shows or movies online. I believe that will change over time, and age will not be a barrier to adoption.
"Today's younger consumers are developing habits that will mean drastic changes for the video entertainment market," said Wolf.
"Many consume a large percentage or even a majority of their video entertainment through online distribution today, and we believe that this trend will continue to accelerate as more efforts are made to put this content on various non-PC screens."
ABI believes this is due to growth in the amount of rich content available in ad-supported format on portals and through social networks, as well as increasing demand from consumers for video in both short- and long-form online.
"Consumers are changing their online habits quickly," says research director Michael Wolf.
"Broadband speeds have continued to increase at the same time that Hollywood has decided online distribution is a legitimate revenue opportunity that will increase total return on their video assets, and expand audiences. At the same time, easy to use content creation tools are being put into the hands of consumers and this has effectively created new forms of communication and entertainment."
All forms of content are contributing to the rise of broadband video consumption, including that of long-form TV shows, and much of the longer-form content today is being watched by younger viewers.
When asked if they watched long-form content in the form of TV shows or movies online, nearly half of those under 25, and 53 percent of those aged 25-29 indicate they do so once a month or more.
Older viewers are much more likely to have experimented once with online shows -- three quarters of those over 65 who watch video online responded that they have never watched TV shows or movies online. I believe that will change over time, and age will not be a barrier to adoption.
"Today's younger consumers are developing habits that will mean drastic changes for the video entertainment market," said Wolf.
"Many consume a large percentage or even a majority of their video entertainment through online distribution today, and we believe that this trend will continue to accelerate as more efforts are made to put this content on various non-PC screens."
The U.S. managed security services market was valued at $1.3 billion in 2007, an increase of 19.6 percent over 2006. This figure is expected to increase to $2.8 billion by 2012, representing a compound annual growth rate of 17.2 percent, according to the latest study by IDC.
Positive incremental growth is anticipated during the forecast period due to increased end-user demand.
"Among the many dynamics shaping the U.S. managed security services market today, growing security complexity, the evolving pace of today's technology, and stringent compliance mandates are driving demand and spending for managed security services," said Irida Xheneti, IDC research analyst, Security Services.
As organizations continue to add more employees, partners, suppliers, and customers, they are faced with the challenges of deploying, implementing, and integrating the appropriate technologies to increase the productivity of their employees and enable more efficient collaboration with partners, suppliers, and customers.
IDC's latest study indicates that while new technology initiatives empower organizations for greater growth opportunities, they have also become the source of many IT security vulnerabilities.
To protect against any vulnerabilities, organizations are required to keep up with the rapidly evolving and sophisticated threats. For many organizations, security management has become one of the main IT and business challenges.
Given these dynamics, IDC believes that the managed security services market will continue to experience significant growth during the forecast period as a result of the following market developments:
- The U.S. managed security services market will continue to experience double-digit growth rates for the next five years due to an increase in security complexity, internal and external pressures, and the increased demand for cost-effective security management solutions.
- The managed security services market remains fragmented, with leading contenders including telecommunications companies, systems integrators (SIs), and traditional security product (SPs) vendors. The market will continue to see more merger and acquisition activity in this space as larger, more established SIs and SPs acquire security assets and leverage their existing channels to drive solutions to market.
- Services that enable customers to mitigate and manage risk and meet compliance regulations while increasing productivity will continue to be in high demand. The complexity of managing security, the high cost of hiring internal staff, and the shortage of IT security expertise will continue to be core drivers for managed security services spending.
Positive incremental growth is anticipated during the forecast period due to increased end-user demand.
"Among the many dynamics shaping the U.S. managed security services market today, growing security complexity, the evolving pace of today's technology, and stringent compliance mandates are driving demand and spending for managed security services," said Irida Xheneti, IDC research analyst, Security Services.
As organizations continue to add more employees, partners, suppliers, and customers, they are faced with the challenges of deploying, implementing, and integrating the appropriate technologies to increase the productivity of their employees and enable more efficient collaboration with partners, suppliers, and customers.
IDC's latest study indicates that while new technology initiatives empower organizations for greater growth opportunities, they have also become the source of many IT security vulnerabilities.
To protect against any vulnerabilities, organizations are required to keep up with the rapidly evolving and sophisticated threats. For many organizations, security management has become one of the main IT and business challenges.
Given these dynamics, IDC believes that the managed security services market will continue to experience significant growth during the forecast period as a result of the following market developments:
- The U.S. managed security services market will continue to experience double-digit growth rates for the next five years due to an increase in security complexity, internal and external pressures, and the increased demand for cost-effective security management solutions.
- The managed security services market remains fragmented, with leading contenders including telecommunications companies, systems integrators (SIs), and traditional security product (SPs) vendors. The market will continue to see more merger and acquisition activity in this space as larger, more established SIs and SPs acquire security assets and leverage their existing channels to drive solutions to market.
- Services that enable customers to mitigate and manage risk and meet compliance regulations while increasing productivity will continue to be in high demand. The complexity of managing security, the high cost of hiring internal staff, and the shortage of IT security expertise will continue to be core drivers for managed security services spending.
There are two new approaches to home automation -- mainstream systems based on standardized technologies and packaged components, and home automation as a managed service offered through a broadband or wireless service provider.
Both have the potential for such broad market appeal that new research from ABI Research forecasts shipments to grow more than 50-fold between 2007 and 2013.
For 20 years, home automation systems were confined to two niche markets: luxury custom-designed and installed high-end systems that cover the whole home at a typical cost of $30,000-60,000 and up, and do-it-yourself X10 systems that tech-savvy customers typically bought online and were self-installed.
Now, however, according to ABI Research senior analyst Sam Lucero, "Home automation systems are becoming more mainstream and managed services are growing. ABI Research believes that they will appeal to a much wider public. Our forecasts indicate that the overall market will grow from a modest 237,000 systems shipped in 2007, to more than 4 million systems in 2013."
By far the lion's share of that growth will occur in the two new segments, mainstream and managed services. Mainstream systems are based on standard technologies and packaged components, as well as software that is integrated into other devices in the home, such as set-top boxes.
They feature interoperable devices available from multiple vendors, as opposed to integrated single-vendor systems. Such products are typically sold via high-touch retail and big box outlets. Home builders are also using them as an option.
Managed home automation will show the strongest growth of all, with an anticipated 1.3 million shipments in 2013.
Partnering with automation vendors such as 4Home, Portus, iControl, and uControl, broadband and telecom service providers are starting to offer such services, which provide functionality and remote monitoring via a computer or smartphone, as part of quintuple-play bundles.
Both have the potential for such broad market appeal that new research from ABI Research forecasts shipments to grow more than 50-fold between 2007 and 2013.
For 20 years, home automation systems were confined to two niche markets: luxury custom-designed and installed high-end systems that cover the whole home at a typical cost of $30,000-60,000 and up, and do-it-yourself X10 systems that tech-savvy customers typically bought online and were self-installed.
Now, however, according to ABI Research senior analyst Sam Lucero, "Home automation systems are becoming more mainstream and managed services are growing. ABI Research believes that they will appeal to a much wider public. Our forecasts indicate that the overall market will grow from a modest 237,000 systems shipped in 2007, to more than 4 million systems in 2013."
By far the lion's share of that growth will occur in the two new segments, mainstream and managed services. Mainstream systems are based on standard technologies and packaged components, as well as software that is integrated into other devices in the home, such as set-top boxes.
They feature interoperable devices available from multiple vendors, as opposed to integrated single-vendor systems. Such products are typically sold via high-touch retail and big box outlets. Home builders are also using them as an option.
Managed home automation will show the strongest growth of all, with an anticipated 1.3 million shipments in 2013.
Partnering with automation vendors such as 4Home, Portus, iControl, and uControl, broadband and telecom service providers are starting to offer such services, which provide functionality and remote monitoring via a computer or smartphone, as part of quintuple-play bundles.
According to the latest In-Stat market study, the U.S. business market currently devotes the largest part of managed services spending to managed infrastructure in 2008 at 35 percent.
Most of this current spending is done by the enterprise market -- firms with more than 1,000 employees. While enterprises devote the largest portions of their managed services budgets to managed infrastructure services, at the other end of the spectrum SOHO and small businesses (fewer than 100 employees per firm) spend the bulk of their managed services dollars on Web and application hosting.
Managed network services is the biggest slice of the pie among mid-sized businesses (100 to 999 employees per firm).
The leading trend in managed services is the quickly increasing spending on the out-tasking of Web and application hosting among enterprises and, to a lesser degree, mid-sized businesses.
Spending on Web and application hosting is expected to experience strong increases and a CAGR of 20 percent through 2012. Meanwhile, managed infrastructure and managed network services, are expected to experience solid, but lower growth, with CAGRs of 4 and 3 percent over the same period, respectively.
Spending on Web and application hosting is expected to become the largest area of managed services spending by 2010. The combined growth in the three areas of managed services spending is expected to result in a 7 percent CAGR for total managed services spending through 2012.
Enterprises make up the bulk of wireline data spending, 67 percent in 2008. Mid-sized businesses account for 21 percent of the market. Small businesses (5 to 9 employees) and SOHO businesses (1 to 4 employees) make up just 10 and 2 percent, respectively.
I believe that the upside potential for managed service providers to target the SMB and SOHO segments of the market is truly substantial. Given an appropriate marketing strategy, this is an unprecedented new revenue opportunity.
Most of this current spending is done by the enterprise market -- firms with more than 1,000 employees. While enterprises devote the largest portions of their managed services budgets to managed infrastructure services, at the other end of the spectrum SOHO and small businesses (fewer than 100 employees per firm) spend the bulk of their managed services dollars on Web and application hosting.
Managed network services is the biggest slice of the pie among mid-sized businesses (100 to 999 employees per firm).
The leading trend in managed services is the quickly increasing spending on the out-tasking of Web and application hosting among enterprises and, to a lesser degree, mid-sized businesses.
Spending on Web and application hosting is expected to experience strong increases and a CAGR of 20 percent through 2012. Meanwhile, managed infrastructure and managed network services, are expected to experience solid, but lower growth, with CAGRs of 4 and 3 percent over the same period, respectively.
Spending on Web and application hosting is expected to become the largest area of managed services spending by 2010. The combined growth in the three areas of managed services spending is expected to result in a 7 percent CAGR for total managed services spending through 2012.
Enterprises make up the bulk of wireline data spending, 67 percent in 2008. Mid-sized businesses account for 21 percent of the market. Small businesses (5 to 9 employees) and SOHO businesses (1 to 4 employees) make up just 10 and 2 percent, respectively.
I believe that the upside potential for managed service providers to target the SMB and SOHO segments of the market is truly substantial. Given an appropriate marketing strategy, this is an unprecedented new revenue opportunity.
According to a new market study by Informa Telecoms & Media, mobile phone traffic generated in the home environment was estimated at 40 percent in 2007. By 2013 it is expected to reach an overwhelming 58 percent.
Informa expects Femtocells deployment to help operators offload up to 8 percent of total mobile traffic to fixed networks via end-user broadband lines.
Their report finds that mobile voice minutes of use (MoU) in the home environment will approach 42 percent of total mobile voice traffic by the end of 2008. As the price gap between fixed and mobile calls narrows mobile voice usage at home will gradually increase to reach 49 percent by 2013.
The office environment will come in second position with a 30 percent market share, while only 9 percent of calls will be initiated on the move -- when walking, driving, or on the train or bus -- and the remaining 21 percent of calls will be generated from other public environments.
Mobile data usage is also expected to increase over the coming years, thanks to the aggressive flat-rate data-plans pushed by mobile operators, the rollout of mobile broadband networks and most importantly the advances in mobile terminal software.
In particular, advanced user interfaces are leading to the proliferation of new type of smartphones and mobile internet devices, including Apple's iPhone and Google's G1.
Apparently, 2007 was a watershed year for operators in terms of their strategy regarding the development of new non-voice services for their customers.
"While mobile operators continue to develop their own services and strategies around applications such as music, games, TV and video, there was a realization during 2007 that a far greater opportunity exists in providing unrestricted broadband access to the Internet" said Malik Saadi, Principal Analyst at Informa.
In the same way that voice traffic has moved from old fixed line telephony service PSTN to mobile, there is reason to believe that a significant percentage of Internet traffic generation will move away from fixed personal computers to mobile devices including mobile handsets, mobile Internet devices (MIDs) and connected notebooks.
These strategies are starting to pay off with the leading mobile operators seeing data revenues surpassing 40 percent growth in 1H 2008 compared to the same period last year.
At the same time mobile data traffic is surging with operators now recording growth ranging from 120 to 250 percent over their networks. However, Informa has estimated that annual revenues generated by 1 PetaByte of data traffic will decrease by a factor of 4.9 by 2012 to reach $125 million -- down from $612 million in 2008.
In 2008, the home environment will already be responsible for more than 43 percent of total mobile data traffic but this traffic is expected to predominate with an overwhelming 60 percent by 2013.
The growth will be driven by users increasingly initiating sessions in the relaxed environment of their home, through browsing the internet, watching longer and richer video clips, downloading music and video content, exchanging pictures, or using VoIP and on-line chatting.
Informa expects Femtocells deployment to help operators offload up to 8 percent of total mobile traffic to fixed networks via end-user broadband lines.
Their report finds that mobile voice minutes of use (MoU) in the home environment will approach 42 percent of total mobile voice traffic by the end of 2008. As the price gap between fixed and mobile calls narrows mobile voice usage at home will gradually increase to reach 49 percent by 2013.
The office environment will come in second position with a 30 percent market share, while only 9 percent of calls will be initiated on the move -- when walking, driving, or on the train or bus -- and the remaining 21 percent of calls will be generated from other public environments.
Mobile data usage is also expected to increase over the coming years, thanks to the aggressive flat-rate data-plans pushed by mobile operators, the rollout of mobile broadband networks and most importantly the advances in mobile terminal software.
In particular, advanced user interfaces are leading to the proliferation of new type of smartphones and mobile internet devices, including Apple's iPhone and Google's G1.
Apparently, 2007 was a watershed year for operators in terms of their strategy regarding the development of new non-voice services for their customers.
"While mobile operators continue to develop their own services and strategies around applications such as music, games, TV and video, there was a realization during 2007 that a far greater opportunity exists in providing unrestricted broadband access to the Internet" said Malik Saadi, Principal Analyst at Informa.
In the same way that voice traffic has moved from old fixed line telephony service PSTN to mobile, there is reason to believe that a significant percentage of Internet traffic generation will move away from fixed personal computers to mobile devices including mobile handsets, mobile Internet devices (MIDs) and connected notebooks.
These strategies are starting to pay off with the leading mobile operators seeing data revenues surpassing 40 percent growth in 1H 2008 compared to the same period last year.
At the same time mobile data traffic is surging with operators now recording growth ranging from 120 to 250 percent over their networks. However, Informa has estimated that annual revenues generated by 1 PetaByte of data traffic will decrease by a factor of 4.9 by 2012 to reach $125 million -- down from $612 million in 2008.
In 2008, the home environment will already be responsible for more than 43 percent of total mobile data traffic but this traffic is expected to predominate with an overwhelming 60 percent by 2013.
The growth will be driven by users increasingly initiating sessions in the relaxed environment of their home, through browsing the internet, watching longer and richer video clips, downloading music and video content, exchanging pictures, or using VoIP and on-line chatting.
The communications industry buzz makes unified communications (UC) sound like it will cause seismic shifts across the business world, according to the latest market study by In-Stat.
In the long run, some grand predictions may prove accurate because definitions of unified communications are so broad, with reports on uptake quoting big numbers, such as 50 percent of enterprises evaluating, installing, or running unified communications applications.
However, apparently even the small baby steps of progress, such as a unified messaging installation or a web conferencing subscription, are being counted within those reports.
"Real transformational changes will take more time, perhaps even a generation, to accomplish," says David Lemelin, In-Stat analyst.
"But, it's possible that a new generation, dubbed Millennials, bringing to the workplace communications habits formed in their early years (text messaging, social networking, blogging, etc.), portends more rapid adoption."
That said, I believe that UC isn't just for the young, it's for the young at heart. Frankly, I can think of one baby-boomer who is ready to make the full long-jump leap today.
In-Stat's market study found the following:
- Worldwide unified communications product revenues will reach $18 billion in 2012.
- In-Stat's survey of VoIP users demonstrates messaging is the most mature aspect of UC.
- Conferencing is the most compelling near-term opportunity for service providers.
In the long run, some grand predictions may prove accurate because definitions of unified communications are so broad, with reports on uptake quoting big numbers, such as 50 percent of enterprises evaluating, installing, or running unified communications applications.
However, apparently even the small baby steps of progress, such as a unified messaging installation or a web conferencing subscription, are being counted within those reports.
"Real transformational changes will take more time, perhaps even a generation, to accomplish," says David Lemelin, In-Stat analyst.
"But, it's possible that a new generation, dubbed Millennials, bringing to the workplace communications habits formed in their early years (text messaging, social networking, blogging, etc.), portends more rapid adoption."
That said, I believe that UC isn't just for the young, it's for the young at heart. Frankly, I can think of one baby-boomer who is ready to make the full long-jump leap today.
In-Stat's market study found the following:
- Worldwide unified communications product revenues will reach $18 billion in 2012.
- In-Stat's survey of VoIP users demonstrates messaging is the most mature aspect of UC.
- Conferencing is the most compelling near-term opportunity for service providers.
Have you seen a movie trailer online lately? Seems like they're surfacing more frequently in all types of rich media Ads. Online film marketing is truly expanding -- in both the scope and sophistication.
In 2007, studios in the Motion Picture Association of America (MPAA), and their subsidiaries, spent $754 million advertising films online. By 2012 that figure will increase to $2.4 billion.
According to eMarketer projections, last year online channels represented approximately 5 percent of all film advertising, but by 2012 the figure will climb to 13.2 percent.
"Not only is online film advertising spending on a fast growth curve, the marketing channels used by studios are also expanding," says Paul Verna, senior analyst at eMarketer.
"Today, virtually every film marketing campaign leverages traditional and new media channels, with applications such as social network profiles, widgets and recommendation engines becoming an integral part of the mix."
Films are rarely released without Facebook and MySpace profiles, a YouTube channel driven by the studio and other forms of direct engagement with the target audience via social media.
"The demographics of film audiences also work in favor of online and social media marketing," says Mr. Verna. "Blockbusters such as 'The Dark Knight' and 'Iron Man' appeal to the kinds of people who are online in massive numbers and are more apt to use Web 2.0 tools -- youthful, digitally savvy consumers."
However, despite the projected increases in online advertising spending, the film industry faces serious challenges in content delivery.
Box office attendance and DVD sales remain flat, and digital download services are still in their infancy. Consumers demand access, flexibility, portability and affordability, and so far no digital download service meets all these criteria.
"It's a scary time for many industry executives," says Mr. Verna. "Nevertheless, studios need to apply the lessons learned, confront their fears of revenue cannibalization -- which in the past have been misguided -- and embrace new technologies."
From a virtual standing start of just 10 million units in 2008, shipments of ultra-mobile devices (UMD) -- the umbrella term for ultra-mobile PCs, netbooks and mobile Internet devices -- are expected to exceed 200 million in 2013.
According to ABI Research principal analyst Philip Solis, "The UMD market will still be small compared to the wireless handset market, but with a forecast revenue of nearly $27 billion in 2013, it will certainly be significant."
While netbooks account for about 90 percent of today's UMD market, they will fall to a distant second place by 2013, while Mobile Internet Device (MID) shipments surge ahead to take nearly 68 percent of the market, with Ultra-mobile PCs (UMPCs) remaining a niche category.
To put the UMD market forecasts into perspective, the 2013 estimate of 200 million shipped devices is roughly the anticipated size of the worldwide laptop PC market.
"As this market enters its rapid growth phase and starts to evolve," Solis continues, "we will see considerable experimentation with different distribution channels."
Some will apparently sell direct from the manufacturer, some via retail outlets, and some through mobile operators who will subsidize them to encourage new mobile data service plan subscriptions.
The Dell Mini was one new device that caught my attention. The base model is powered by Ubuntu Linux, and priced at $349. That said, consumer reviewer comments about the glossy screen's effect on contrast and some keyboard layout related issues are of concern.
According to ABI Research principal analyst Philip Solis, "The UMD market will still be small compared to the wireless handset market, but with a forecast revenue of nearly $27 billion in 2013, it will certainly be significant."
While netbooks account for about 90 percent of today's UMD market, they will fall to a distant second place by 2013, while Mobile Internet Device (MID) shipments surge ahead to take nearly 68 percent of the market, with Ultra-mobile PCs (UMPCs) remaining a niche category.
To put the UMD market forecasts into perspective, the 2013 estimate of 200 million shipped devices is roughly the anticipated size of the worldwide laptop PC market.
"As this market enters its rapid growth phase and starts to evolve," Solis continues, "we will see considerable experimentation with different distribution channels."
Some will apparently sell direct from the manufacturer, some via retail outlets, and some through mobile operators who will subsidize them to encourage new mobile data service plan subscriptions.
The Dell Mini was one new device that caught my attention. The base model is powered by Ubuntu Linux, and priced at $349. That said, consumer reviewer comments about the glossy screen's effect on contrast and some keyboard layout related issues are of concern.
When world's predicted four-billionth mobile phone subscription comes before the end of 2008, it will have taken just five full quarters for the latest billion net additions.
The engine for this rapid growth has been the tremendous consumer demand seen in emerging markets, such as China and India, where in each of these countries there have been over 50 million new mobile subscriptions in the last six months alone -- as well as significant growth in markets such as Indonesia, Vietnam, Pakistan and Brazil.
The rise of global mobile subscription numbers is set to slow, with Informa Telecoms and Media's forecast suggesting the five billionth subscription will be signed during 4Q 2011, with worldwide penetration reaching in excess of 70 percent by this time.
Only in Africa will penetration at the end of 2011 still be below 50 percent.
"It is clear that the mobile industry will see a slowdown in growth -- it is simply untenable for the extraordinary growth witnessed over the last 18 months to continue," says Informa Principal Analyst, Nick Jotischky.
Even taking the fastest growing regions of Asia Pacific and Africa into account, where we will see well over 20 percent year-on-year growth in subscription numbers this year, Informa's forecast suggest that this growth rate will slow to below 10 percent in 2010.
Facing the reality of this slowdown in growth, the world's largest mobile operators are broadening, and in some cases reconsidering their strategic thinking. Informa's report studies the parallel business lines being assumed by the likes of Vodafone, China Mobile and Telenor.
On the one hand, the extension of basic mobile connectivity to new lower-income groups remains central to their strategic direction, but increasingly so too is the accelerating collision of broadband Internet and mobility.
"Mobile broadband services, and in particular the evolution of HSPA, have reinvented the business case for 3G technologies and as a result mobile Internet services are helping to provide operators with new business streams, particularly within higher-income groups," Jotischky explains.
Emerging markets are no longer quite as attractive as they once were as the race to extend rural network coverage has given the ultimate challenge to operators -- how best to reach out to low income groups and still make a profit. It is no longer just about the quantity of subscriptions, but also the value that can be attributed to these subscriptions.
The engine for this rapid growth has been the tremendous consumer demand seen in emerging markets, such as China and India, where in each of these countries there have been over 50 million new mobile subscriptions in the last six months alone -- as well as significant growth in markets such as Indonesia, Vietnam, Pakistan and Brazil.
The rise of global mobile subscription numbers is set to slow, with Informa Telecoms and Media's forecast suggesting the five billionth subscription will be signed during 4Q 2011, with worldwide penetration reaching in excess of 70 percent by this time.
Only in Africa will penetration at the end of 2011 still be below 50 percent.
"It is clear that the mobile industry will see a slowdown in growth -- it is simply untenable for the extraordinary growth witnessed over the last 18 months to continue," says Informa Principal Analyst, Nick Jotischky.
Even taking the fastest growing regions of Asia Pacific and Africa into account, where we will see well over 20 percent year-on-year growth in subscription numbers this year, Informa's forecast suggest that this growth rate will slow to below 10 percent in 2010.
Facing the reality of this slowdown in growth, the world's largest mobile operators are broadening, and in some cases reconsidering their strategic thinking. Informa's report studies the parallel business lines being assumed by the likes of Vodafone, China Mobile and Telenor.
On the one hand, the extension of basic mobile connectivity to new lower-income groups remains central to their strategic direction, but increasingly so too is the accelerating collision of broadband Internet and mobility.
"Mobile broadband services, and in particular the evolution of HSPA, have reinvented the business case for 3G technologies and as a result mobile Internet services are helping to provide operators with new business streams, particularly within higher-income groups," Jotischky explains.
Emerging markets are no longer quite as attractive as they once were as the race to extend rural network coverage has given the ultimate challenge to operators -- how best to reach out to low income groups and still make a profit. It is no longer just about the quantity of subscriptions, but also the value that can be attributed to these subscriptions.
ComScore announced that mobile search is gaining in both popularity and frequency of use -- both in the U.S. and Western Europe.
comScore M:Metrics reports that in June 2008, 20.8 million U.S. mobile subscribers and 4.5 million European mobile phone subscribers accessed search during the month, an increase of 68 and 38 percent from June 2007, respectively.
The U.K. had the highest penetration of mobile subscribers using search at 9.5 percent, followed closely by the U.S. at 9.2 percent.
"It is interesting to note that as we see the number of mobile search users increase, the frequency of activity is also growing," observed Alistair Hill, analyst, comScore.
The number of people accessing mobile search at least once a week grew 50 percent in Europe, with France and Spain leading at a rate of 69 and 63 percent, respectively.
Meanwhile, the number of U.S. users accessing mobile search has more than doubled as a result of expanded 3G penetration and smartphone adoption, as well as the proliferation of flat-rate data plans.
Google is the preferred brand for browser-based searches with a 60 percent share of mobile searchers in all countries measured by comScore M:Metrics.
Yahoo! ranks second in Germany, Italy, UK and the U.S. In the U.S., Yahoo's mobile searcher penetration is 34.6 percent -- more than double its share in most other countries.
comScore M:Metrics reports that in June 2008, 20.8 million U.S. mobile subscribers and 4.5 million European mobile phone subscribers accessed search during the month, an increase of 68 and 38 percent from June 2007, respectively.
The U.K. had the highest penetration of mobile subscribers using search at 9.5 percent, followed closely by the U.S. at 9.2 percent.
"It is interesting to note that as we see the number of mobile search users increase, the frequency of activity is also growing," observed Alistair Hill, analyst, comScore.
The number of people accessing mobile search at least once a week grew 50 percent in Europe, with France and Spain leading at a rate of 69 and 63 percent, respectively.
Meanwhile, the number of U.S. users accessing mobile search has more than doubled as a result of expanded 3G penetration and smartphone adoption, as well as the proliferation of flat-rate data plans.
Google is the preferred brand for browser-based searches with a 60 percent share of mobile searchers in all countries measured by comScore M:Metrics.
Yahoo! ranks second in Germany, Italy, UK and the U.S. In the U.S., Yahoo's mobile searcher penetration is 34.6 percent -- more than double its share in most other countries.
Sprint, the U.S. wireless operator, lowered its mobile broadband prices for using a phone as a modem, but the price for using PC Cards and USB modems are unchanged. Given this change, cellular modem sales are still set to top $22 billion by 2013.
ABI Research principal analyst Dan Shey notes, "Customers want mobile broadband experiences like those provided by their PCs, meaning they want the fastest devices. Phones with at least 3G radios threaten cellular modem sales; however shipments of these modems will not exceed 30 percent of cellular handset shipments by 2011."
But to truly understand this threat, we must analyze regional penetration of 3G devices. Industrialized countries will see deeper penetration of these higher-priced devices, typically in the hands of business customers.
However convenience is important to business customers -- PC Cards and USB modems are far more convenient than phones for broadband connectivity. Adding complexity to the analysis is the growing penetration of embedded cellular connectivity in laptops and notebooks, which will reduce the need for external devices.
How does this apply to consumers and to developing world regions? Any operator can drop the price for mobile broadband using the phone as the modem, which is more amenable to a broad customer base regardless of world region.
But the questions remain -- how will this pricing change detract from use of the phone for other revenue-generating services? And, does it perpetuate the perception of the wireless operator as the dumb pipe provider?
The ABI Research study provides a comprehensive overview of the market for cellular modems. The report analyzes the factors both driving and inhibiting growth and examines how changes in the market are creating both opportunity and complexity for the value-chain participants.
ABI Research principal analyst Dan Shey notes, "Customers want mobile broadband experiences like those provided by their PCs, meaning they want the fastest devices. Phones with at least 3G radios threaten cellular modem sales; however shipments of these modems will not exceed 30 percent of cellular handset shipments by 2011."
But to truly understand this threat, we must analyze regional penetration of 3G devices. Industrialized countries will see deeper penetration of these higher-priced devices, typically in the hands of business customers.
However convenience is important to business customers -- PC Cards and USB modems are far more convenient than phones for broadband connectivity. Adding complexity to the analysis is the growing penetration of embedded cellular connectivity in laptops and notebooks, which will reduce the need for external devices.
How does this apply to consumers and to developing world regions? Any operator can drop the price for mobile broadband using the phone as the modem, which is more amenable to a broad customer base regardless of world region.
But the questions remain -- how will this pricing change detract from use of the phone for other revenue-generating services? And, does it perpetuate the perception of the wireless operator as the dumb pipe provider?
The ABI Research study provides a comprehensive overview of the market for cellular modems. The report analyzes the factors both driving and inhibiting growth and examines how changes in the market are creating both opportunity and complexity for the value-chain participants.
Demand for intelligent control applications will push U.S. revenues for consumer wireless and powerline controls from $740 million in 2008 to over $3 billion in 2012, according to the latest market study by Parks Associates.
They forecast the installed base for these technologies will skyrocket to nearly 60 million in 2012, thanks in large part to key players entering this market. Companies including Black & Decker, Schlage, Hawking, iControl, and Wayne Dalton have all announced new products targeting access control, remote monitoring, and consumer energy management applications.
Zilog recently announced a new control platform incorporating both wired and wireless connectivity interfaces that provides consumers with remote access and control through WiFi-enabled handheld devices, including the Apple iPhone and the BlackBerry Curve.
"The era of electronic home controls has arrived," said Bill Ablondi, Director, Home Systems Research, Parks Associates. "Technological advancements, the migration to IP-based systems, and the entry of key companies are all driving this market."
The report finds entertainment controls, including advanced universal remote controllers, will drive growth in wireless controls. Lighting applications will drive the opportunities for powerline controls.
"Another key application is remote home monitoring," Ablondi said. "We expect to see major manufacturers join forces with telecommunications and video service providers to fuel consumer demand for remote monitoring and Web-based security services."
They forecast the installed base for these technologies will skyrocket to nearly 60 million in 2012, thanks in large part to key players entering this market. Companies including Black & Decker, Schlage, Hawking, iControl, and Wayne Dalton have all announced new products targeting access control, remote monitoring, and consumer energy management applications.
Zilog recently announced a new control platform incorporating both wired and wireless connectivity interfaces that provides consumers with remote access and control through WiFi-enabled handheld devices, including the Apple iPhone and the BlackBerry Curve.
"The era of electronic home controls has arrived," said Bill Ablondi, Director, Home Systems Research, Parks Associates. "Technological advancements, the migration to IP-based systems, and the entry of key companies are all driving this market."
The report finds entertainment controls, including advanced universal remote controllers, will drive growth in wireless controls. Lighting applications will drive the opportunities for powerline controls.
"Another key application is remote home monitoring," Ablondi said. "We expect to see major manufacturers join forces with telecommunications and video service providers to fuel consumer demand for remote monitoring and Web-based security services."
Telephone service via a cable TV provider has gone from something of a curiosity among voice services to a widely available service. In fact, in a few countries such as the United States and the United Kingdom, cable telephony has become a common choice for wired telephone service.
According to In-Stat, even with the increasingly widespread availability of cable telephony service, there are some critics who remain skeptical about the long-term viability of the service. When queried about this, most cable TV operators point out the following:
- A cable TV service bundle of video, high-speed data and telephony is a compelling package, and it continues to attract entertainment and information-hungry consumers.
- Advances in hybrid fiber-coaxial (HFC) network technology are providing a cost-effective way to provision telephony services over the existing cable TV infrastructure.
- The widespread availability of VoIP-based cable telephony services is also enhancing the cost competitiveness of cable telephony services.
Recent growth in the number of cable telephony subscribers appears to support the cable operator's statements. As of mid-2008, over 34 million subscribers around the world had signed up for cable telephony service.
In the U.S. alone, the total number of subscribers has risen from 250,000 in early 2000, to over 15 million today. In Europe the numbers are also impressive -- the region now has over 11 million cable telephony subscribers.
However, even with this impressive growth, cable operators still face challenges with their voice services. Foremost among these are continuing changes in telephony technology, shifting regulatory and legislative environments, and an ever-changing competitive landscape.
According to In-Stat, even with the increasingly widespread availability of cable telephony service, there are some critics who remain skeptical about the long-term viability of the service. When queried about this, most cable TV operators point out the following:
- A cable TV service bundle of video, high-speed data and telephony is a compelling package, and it continues to attract entertainment and information-hungry consumers.
- Advances in hybrid fiber-coaxial (HFC) network technology are providing a cost-effective way to provision telephony services over the existing cable TV infrastructure.
- The widespread availability of VoIP-based cable telephony services is also enhancing the cost competitiveness of cable telephony services.
Recent growth in the number of cable telephony subscribers appears to support the cable operator's statements. As of mid-2008, over 34 million subscribers around the world had signed up for cable telephony service.
In the U.S. alone, the total number of subscribers has risen from 250,000 in early 2000, to over 15 million today. In Europe the numbers are also impressive -- the region now has over 11 million cable telephony subscribers.
However, even with this impressive growth, cable operators still face challenges with their voice services. Foremost among these are continuing changes in telephony technology, shifting regulatory and legislative environments, and an ever-changing competitive landscape.
ComScore released results of a study into the online gaming category, indicating significant user growth among teenage girls between the ages of 12 and 17 and women between the ages of 55 and 64.
While the total female online gaming audience in August 2008 grew 27 percent versus last year to nearly 43 million visitors, the number of female gamers in the 12-24 and 55-64 age segments grew at a substantially faster rate.
Growth in these particular demographic groups is likely the result of the emergence of gaming content, portals and Web sites catering specifically to these segments.
"Many advertisers and their ad agencies have long understood the appeal of online gaming among teenage boys, and they have now found creative ways to effectively reach these female audiences with targeted ad campaigns," said Edward Hunter, director of Gaming Solutions at comScore.
"With the increased interest in online gaming among the highly lucrative teenage girl and older female demographic segments, marketers who have been hesitant to transfer some of their ad spend to the gaming space may now be taking a second look."
Contributing to strong growth in the category among younger girls is the increasing popularity of fashion and dress-up sites, such as Stardoll.com, DressUpGames.com, and I-Dressup.com, and virtual worlds such as Neopets and Gaiaonline.com.
Meanwhile, the growth among older females is in part due to partnerships between women's content portals and casual game sites, such as the iVillage.com partnership with Pogo.com games.
While the total female online gaming audience in August 2008 grew 27 percent versus last year to nearly 43 million visitors, the number of female gamers in the 12-24 and 55-64 age segments grew at a substantially faster rate.
Growth in these particular demographic groups is likely the result of the emergence of gaming content, portals and Web sites catering specifically to these segments.
"Many advertisers and their ad agencies have long understood the appeal of online gaming among teenage boys, and they have now found creative ways to effectively reach these female audiences with targeted ad campaigns," said Edward Hunter, director of Gaming Solutions at comScore.
"With the increased interest in online gaming among the highly lucrative teenage girl and older female demographic segments, marketers who have been hesitant to transfer some of their ad spend to the gaming space may now be taking a second look."
Contributing to strong growth in the category among younger girls is the increasing popularity of fashion and dress-up sites, such as Stardoll.com, DressUpGames.com, and I-Dressup.com, and virtual worlds such as Neopets and Gaiaonline.com.
Meanwhile, the growth among older females is in part due to partnerships between women's content portals and casual game sites, such as the iVillage.com partnership with Pogo.com games.
The home video market in Western Europe is expected to generate total retail revenues of 11 billion Euros by the end of 2008, with 97 percent of those revenues coming from packaged media (DVD and Blu-ray) and 3 percent from new digital video (online and mobile video).
Although revenues from online video are currently low, the presence of major hardware players such as Apple (iTunes), Microsoft (Xbox Live Video Marketplace) and the recently launched PlayStation Network video service from Sony provides a promising outlook for the market.
Apple is already quoting sales of 50,000 movies per day on its video service, a clear indication that there is a growing appetite amongst consumers to view digital video content.
The online video market is expected to gain traction and will be encouraged by technology advancements such as faster broadband speeds. Futuresource anticipates online video revenues to increase significantly by 2012 and along with mobile video will represent 13 percent of total video revenues in Western Europe.
There is a massive advantage for online video services to be tied into a hardware ownership model -- the installed base of hardware devices gives these online video service a ready made and ready equipped base of consumers to aim their video services at.
As the vast majority of revenues in the short to medium term will come from packaged media we are seeing a raft of initiatives in the market aimed at boosting sales. Certainly the continued release of blockbuster titles on Blu-ray will be key factor in holding up packaged media. However, in the near term the focus continues to be on DVD.
Across Europe an increasing amount of titles are being heavily re-promoted in the 3-4 month post release period -- many using special packaging to differentiate and add value on the retailers shelf.
The continued appetite for TV content on DVD has also helped to drive somewhat of a resurgence in non-standard packaging. Although TV content is performing well in UK, it has been Germany, Spain and Belgium that has witness impressive 25 percent growth rates in volume terms for TV content on DVD in an otherwise near-flat market.
The challenges that all these sales boosting initiatives bring clearly has a knock on impact throughout the home video supply chain.
As in any mature market as well as focusing on sales boosting initiatives the studios are also equally focused on improving efficiencies and reducing costs throughout the home video supply chain.
An added complexity in many of the studios supply chain discussions, particularly in the USA, is the whole subject of sustainability and environmentally green strategies.
Wal-Mart in particular in the USA is currently challenging all its suppliers on their carbon footprint. This topic will clearly become more center stage in Europe over the forthcoming year.
Although revenues from online video are currently low, the presence of major hardware players such as Apple (iTunes), Microsoft (Xbox Live Video Marketplace) and the recently launched PlayStation Network video service from Sony provides a promising outlook for the market.
Apple is already quoting sales of 50,000 movies per day on its video service, a clear indication that there is a growing appetite amongst consumers to view digital video content.
The online video market is expected to gain traction and will be encouraged by technology advancements such as faster broadband speeds. Futuresource anticipates online video revenues to increase significantly by 2012 and along with mobile video will represent 13 percent of total video revenues in Western Europe.
There is a massive advantage for online video services to be tied into a hardware ownership model -- the installed base of hardware devices gives these online video service a ready made and ready equipped base of consumers to aim their video services at.
As the vast majority of revenues in the short to medium term will come from packaged media we are seeing a raft of initiatives in the market aimed at boosting sales. Certainly the continued release of blockbuster titles on Blu-ray will be key factor in holding up packaged media. However, in the near term the focus continues to be on DVD.
Across Europe an increasing amount of titles are being heavily re-promoted in the 3-4 month post release period -- many using special packaging to differentiate and add value on the retailers shelf.
The continued appetite for TV content on DVD has also helped to drive somewhat of a resurgence in non-standard packaging. Although TV content is performing well in UK, it has been Germany, Spain and Belgium that has witness impressive 25 percent growth rates in volume terms for TV content on DVD in an otherwise near-flat market.
The challenges that all these sales boosting initiatives bring clearly has a knock on impact throughout the home video supply chain.
As in any mature market as well as focusing on sales boosting initiatives the studios are also equally focused on improving efficiencies and reducing costs throughout the home video supply chain.
An added complexity in many of the studios supply chain discussions, particularly in the USA, is the whole subject of sustainability and environmentally green strategies.
Wal-Mart in particular in the USA is currently challenging all its suppliers on their carbon footprint. This topic will clearly become more center stage in Europe over the forthcoming year.
It's true, touch screens have been available for some time, and are found in a variety of fixed and portable devices, but it was the launch of the Apple iPhone that refocused people's attention.
Shipments in 2007 of touch screen-based mobile devices increased 91 percent over 2006, and ABI Research forecasts that revenue from the global touch screen market for mobile phones and other handheld devices such as MIDs, UMPCs, and PNDs will reach $5 billion in 2009.
"Nearly all mobile handset manufacturers are getting into touch screens to a greater or lesser extent," says research director Kevin Burden. "The acceptance of touch screens to date has varied by geographic region, which has been a significant factor in determining the success of individual handset vendors."
Samsung and Motorola have been the most successful, commanding 33 percent and 30 percent shares of the touch screen mobile phone market respectively.
Samsung and Motorola lead the market for touch screen phones primarily because of their scale and significant presence in the Asian markets. Because it's difficult to represent even a fraction of the common Asian characters on a QWERTY-style keyboard, touch screen devices on which characters can be written with a stylus are immensely popular.
The Asia-Pacific market consumed more than 80 percent of the world's total touch screen-based mobile phone production over the past year. At 24 percent Sony Ericsson has the third-largest market share, while all the other handset vendors -- including Apple -- are essentially niche players.
A number of factors are driving further adoption of touch screen-based mobile devices. Consumers are looking for more intuitive user interfaces and personalization options as device functionality increases.
Also, prices for touch components and panels continue to decrease and are falling on an average of nearly 10 percent per year.
Shipments in 2007 of touch screen-based mobile devices increased 91 percent over 2006, and ABI Research forecasts that revenue from the global touch screen market for mobile phones and other handheld devices such as MIDs, UMPCs, and PNDs will reach $5 billion in 2009.
"Nearly all mobile handset manufacturers are getting into touch screens to a greater or lesser extent," says research director Kevin Burden. "The acceptance of touch screens to date has varied by geographic region, which has been a significant factor in determining the success of individual handset vendors."
Samsung and Motorola have been the most successful, commanding 33 percent and 30 percent shares of the touch screen mobile phone market respectively.
Samsung and Motorola lead the market for touch screen phones primarily because of their scale and significant presence in the Asian markets. Because it's difficult to represent even a fraction of the common Asian characters on a QWERTY-style keyboard, touch screen devices on which characters can be written with a stylus are immensely popular.
The Asia-Pacific market consumed more than 80 percent of the world's total touch screen-based mobile phone production over the past year. At 24 percent Sony Ericsson has the third-largest market share, while all the other handset vendors -- including Apple -- are essentially niche players.
A number of factors are driving further adoption of touch screen-based mobile devices. Consumers are looking for more intuitive user interfaces and personalization options as device functionality increases.
Also, prices for touch components and panels continue to decrease and are falling on an average of nearly 10 percent per year.
While initial reactions to marketing and advertising messages on a mobile phone can often be negative, a recent survey from ABI Research finds that the level of responsiveness can often be improved through incentives.
In fact, approximately 37 percent of those who have received text message-based advertising have indicated they are more likely to respond to advertising in a text-based marketing message if they are offered an incentive such as a retail coupon or free song or ringtone, compared with only 11 percent who indicated that such incentives would not have any impact.
"We think that in general, advertisers and operators must tread carefully when delivering marketing messages to a consumer's mobile handset, especially given that many subscribers believe they are paying a significant amount of money for their mobile services," says research director Michael Wolf.
"However, we believe that marketing and advertising messaging that is properly crafted and that utilizes incentives could enjoy more acceptance on the part of the consumer."
Incentives that received the most positive response in an ABI Research study were real-world discounts and coupons for retail storefronts. In fact, over 60 percent of those who were either neutral or open to potential text message marketing nominated a discount coupon at a local retailer as the incentive they would most likely respond to. The next most popular incentives were free ringtones and songs.
"As more content and applications move through both messaging systems and browsers, advertisers are going to need to consider how best to package advertising," said Wolf.
"We believe that most consumers will ultimately be amenable to limited marketing on their mobile phones, particularly that which is non-intrusive, targeted, and that can bring them some kind of value in the form of both real-world and digital media-based incentives."
In fact, approximately 37 percent of those who have received text message-based advertising have indicated they are more likely to respond to advertising in a text-based marketing message if they are offered an incentive such as a retail coupon or free song or ringtone, compared with only 11 percent who indicated that such incentives would not have any impact.
"We think that in general, advertisers and operators must tread carefully when delivering marketing messages to a consumer's mobile handset, especially given that many subscribers believe they are paying a significant amount of money for their mobile services," says research director Michael Wolf.
"However, we believe that marketing and advertising messaging that is properly crafted and that utilizes incentives could enjoy more acceptance on the part of the consumer."
Incentives that received the most positive response in an ABI Research study were real-world discounts and coupons for retail storefronts. In fact, over 60 percent of those who were either neutral or open to potential text message marketing nominated a discount coupon at a local retailer as the incentive they would most likely respond to. The next most popular incentives were free ringtones and songs.
"As more content and applications move through both messaging systems and browsers, advertisers are going to need to consider how best to package advertising," said Wolf.
"We believe that most consumers will ultimately be amenable to limited marketing on their mobile phones, particularly that which is non-intrusive, targeted, and that can bring them some kind of value in the form of both real-world and digital media-based incentives."
The managed network services market is forecast to grow to over $34 billion by 2013, according to the latest market study by Informa Telecoms & Media.
The developing regions such as the Middle East and Africa are expanding particularly strongly as new services are launched, while the established markets such as Western Europe are driven by the need to differentiate through marketing support and customer service.
According to the Informa report author, Richard Jesty, one major trend which is currently emerging is the willingness of operators of all sizes to consider using managed services.
He said "The future for managed services is vibrant, with new strategic deals now being struck with Tier 1 operators, and consultancy becoming a significant factor. But what makes this trend so exciting are the implications it has for the changing nature of the telecoms operator's business model and the opportunities this creates for service providers."
External services already represent around 30 percent of operator's total spending on services worldwide, including both internal and third party services. These services cover not only managed services but also activities such as market and technical research, training, IT systems integration and business support.
By 2013 the proportion of these services which are handled by external managed service providers is expected to increase, indicating that the growth of external spending will be faster than that of internal spending on equivalent business and technical support.
Against this background, it is clear that the addressable market for managed services in telecoms offers excellent potential over the next five years.
Informa's market study identified three sectors in the market:
- Network-led: these services focus primarily on creating greater efficiency in managing the network.
- Service-led: these functions typically include content hosting and can cover new services such as payment and partner management systems which allow fixed, mobile and convergent telecoms players to deliver competitive offerings in a cost-effective way.
- Consultancy-led: these are newer services which respond to the need for business transformation in the telecoms market, and which include a higher degree of strategic involvement on the part of the service provider.
The services market is evolving as a result of the convergence of the specialist managed network services and the generalist professional services sectors, and this means that key players now include the larger management consultancies and IT systems integrators -- such as Accenture, Capgemini, IBM -- as well as the major network vendors.
Future growth in managed services will be driven by a number of factors, some of which are global and some which apply more in the mature markets or in the developing regions. For example the incumbent operator outsourcing services in its home territory may be the exception at present, but this may well become a feature of the market over the next five years.
The developing regions such as the Middle East and Africa are expanding particularly strongly as new services are launched, while the established markets such as Western Europe are driven by the need to differentiate through marketing support and customer service.
According to the Informa report author, Richard Jesty, one major trend which is currently emerging is the willingness of operators of all sizes to consider using managed services.
He said "The future for managed services is vibrant, with new strategic deals now being struck with Tier 1 operators, and consultancy becoming a significant factor. But what makes this trend so exciting are the implications it has for the changing nature of the telecoms operator's business model and the opportunities this creates for service providers."
External services already represent around 30 percent of operator's total spending on services worldwide, including both internal and third party services. These services cover not only managed services but also activities such as market and technical research, training, IT systems integration and business support.
By 2013 the proportion of these services which are handled by external managed service providers is expected to increase, indicating that the growth of external spending will be faster than that of internal spending on equivalent business and technical support.
Against this background, it is clear that the addressable market for managed services in telecoms offers excellent potential over the next five years.
Informa's market study identified three sectors in the market:
- Network-led: these services focus primarily on creating greater efficiency in managing the network.
- Service-led: these functions typically include content hosting and can cover new services such as payment and partner management systems which allow fixed, mobile and convergent telecoms players to deliver competitive offerings in a cost-effective way.
- Consultancy-led: these are newer services which respond to the need for business transformation in the telecoms market, and which include a higher degree of strategic involvement on the part of the service provider.
The services market is evolving as a result of the convergence of the specialist managed network services and the generalist professional services sectors, and this means that key players now include the larger management consultancies and IT systems integrators -- such as Accenture, Capgemini, IBM -- as well as the major network vendors.
Future growth in managed services will be driven by a number of factors, some of which are global and some which apply more in the mature markets or in the developing regions. For example the incumbent operator outsourcing services in its home territory may be the exception at present, but this may well become a feature of the market over the next five years.
The home monitoring market will undergo major growth as a result of robust consumer interest and the emergence of new technologies offering digitally networked services and enhanced functionality compared with traditional systems.
In a recent IDC poll of 1,500 consumers, more than half expressed interest in the ability to monitor and control heating, ventilation, and air conditioning, as well as electricity and home appliances from an external PC or wireless phone.
The home security and monitoring market has changed little in decades and remained largely unaffected by the Internet. The major difference between traditional and next-generation security systems is that the latter are broadband-based and offer redundant connectivity via wireless and voice, while most ADT systems rely on voice or wireless alone.
Likewise, the home automation market is not mature and has few consumer applications with widespread appeal and ease of use. Emerging vendors profiled in a new IDC study include InGrid, iControl, and uControl.
The latter two allow the networking of compatible home utilities and appliances, linking home security and monitoring with energy management, and can potentially bring home automation to the mainstream.
"The new home security systems are digital, broadband-based, and give the user unprecedented control, including the ability to log in and control systems from anywhere," said Irene Berlinsky, IDC research analyst. "New distribution channels through cable and telecommunications companies will reach non-traditional customers and potentially expand the entire market."
Changes in the American landscape (aging baby boomers, rising energy prices) will increase long-term demand for home security/monitoring/automation services. The speed of adoption will depend on how quickly service providers roll out such services to their customers.
They are in an ideal position to push these services because consumers contact them directly to sign up for or transfer service upon moving to a new residence. Also, existing customers that move are likely to call their cable or telco before their home security provider, presenting an opportunity for the former to sell a home monitoring service compatible with legacy systems.
In a recent IDC poll of 1,500 consumers, more than half expressed interest in the ability to monitor and control heating, ventilation, and air conditioning, as well as electricity and home appliances from an external PC or wireless phone.
The home security and monitoring market has changed little in decades and remained largely unaffected by the Internet. The major difference between traditional and next-generation security systems is that the latter are broadband-based and offer redundant connectivity via wireless and voice, while most ADT systems rely on voice or wireless alone.
Likewise, the home automation market is not mature and has few consumer applications with widespread appeal and ease of use. Emerging vendors profiled in a new IDC study include InGrid, iControl, and uControl.
The latter two allow the networking of compatible home utilities and appliances, linking home security and monitoring with energy management, and can potentially bring home automation to the mainstream.
"The new home security systems are digital, broadband-based, and give the user unprecedented control, including the ability to log in and control systems from anywhere," said Irene Berlinsky, IDC research analyst. "New distribution channels through cable and telecommunications companies will reach non-traditional customers and potentially expand the entire market."
Changes in the American landscape (aging baby boomers, rising energy prices) will increase long-term demand for home security/monitoring/automation services. The speed of adoption will depend on how quickly service providers roll out such services to their customers.
They are in an ideal position to push these services because consumers contact them directly to sign up for or transfer service upon moving to a new residence. Also, existing customers that move are likely to call their cable or telco before their home security provider, presenting an opportunity for the former to sell a home monitoring service compatible with legacy systems.
In a recent market study of North American and European SMB IT decision makers, Forrester Research attempted to determine the sources of information used in the buying process. They asked the following questions:
When researching and comparing network and telecommunications products, how important is each of the following "digital media" as sources of information for informing your purchase decisions?
a) Vendor, industry/trade, or professional Web sites; b) blogs from vendors, peers, or industry commentators; c) email or electronic newsletters; d) Web-based events or Webinars; e) interactive media: podcasts, video, online demos, or rich Internet apps; f) discussion forums, online communities, or social network sites; and g) other (please specify).
They also asked which publications or sources of information do SMB decision makers refer to when making enterprise-wide network and telecom technology purchase decisions for their company. The results demonstrate the continued fragmentation in sources of influence, and the increasing role of the online channel.
Word-of-mouth and Web sites are seen as "most important" for purchase decisions.
Decision makers view their peers and colleagues -- and the information exchanged from traditional word of mouth -- as very important (38 percent) and somewhat important (51 percent) sources of information for informing purchasing decisions.
However, they also report that digital media sources -- specifically vendor, industry/trade, or professional Web sites -- are very important (33 percent) and somewhat important (54 percent) digital sources of information.
Sixty-one percent of SMBs view discussion forums, online communities, or social network sites as important or very important sources of information, along with blogs (55 percent).
My opinion: combining online collaboration methods -- that enable the propagation of word-of-mouth referrals -- is clearly where more emphasis should be applied to the technology marketing planning process. It's the most compelling forward-looking market development opportunity for technology product and service marketers.
According to In-Stat, legacy network services -- like frame relay, leased line and ATM -- over the wide area network (WAN) continue to provide U.S. businesses with a reliable, manageable communications infrastructure on which to operate.
However, Next Generation Network (NGN) services over the WAN are better equipped to provide the building blocks necessary in addressing the progressively more demanding connectivity requirements faced in today's business environment -- all size businesses are transitioning towards the IP-NGN model.
For purposes of In-Stat's study, NGN services are defined as IP/MPLS and Ethernet services.
Overall, all size of business segments have similar goals in moving from legacy to NGN services, but there are differences in motivations and concerns over migration that vary by size of business.
In-Stat latest market study included 810 respondents, of which approximately 90 percent were very knowledgeable or extremely knowledgeable in their organization's use of wide area network (WAN) services, and involved with the decision making, management, or implementation of WAN services for their respective organizations.
Respondents also worked in organizations which have a minimum of 2 business locations. Analysis of the results was conducted based upon the size of the organization. Size of businesses segmentation includes small businesses (50 - 99 employees), mid-sized business (100 – 999 employees), and enterprises (1,000+ employees).
In-Stat's market study findings include:
- When making WAN purchasing decisions in 2008, small and mid-sized business respondents indicate they are most driven by the need to improve network security, where as enterprise respondents indicate the need to reduce costs as the leading driver.
- Enterprises remain the largest users of legacy services (64 percent), followed closely by mid-sized businesses (62 percent), with small businesses being the more modest users (49 percent).
- Frame relay is the most widely deployed legacy service across all size of business segments.
- Enterprises will also lead the migration from legacy to NGN services, with 49 percent indicating that they are currently migrating or planning to migrate to other services such IP/MPLS or Ethernet. They were again followed closely by mid-sized businesses at 42 percent, with small businesses moving less aggressively at 35 percent.
However, Next Generation Network (NGN) services over the WAN are better equipped to provide the building blocks necessary in addressing the progressively more demanding connectivity requirements faced in today's business environment -- all size businesses are transitioning towards the IP-NGN model.
For purposes of In-Stat's study, NGN services are defined as IP/MPLS and Ethernet services.
Overall, all size of business segments have similar goals in moving from legacy to NGN services, but there are differences in motivations and concerns over migration that vary by size of business.
In-Stat latest market study included 810 respondents, of which approximately 90 percent were very knowledgeable or extremely knowledgeable in their organization's use of wide area network (WAN) services, and involved with the decision making, management, or implementation of WAN services for their respective organizations.
Respondents also worked in organizations which have a minimum of 2 business locations. Analysis of the results was conducted based upon the size of the organization. Size of businesses segmentation includes small businesses (50 - 99 employees), mid-sized business (100 – 999 employees), and enterprises (1,000+ employees).
In-Stat's market study findings include:
- When making WAN purchasing decisions in 2008, small and mid-sized business respondents indicate they are most driven by the need to improve network security, where as enterprise respondents indicate the need to reduce costs as the leading driver.
- Enterprises remain the largest users of legacy services (64 percent), followed closely by mid-sized businesses (62 percent), with small businesses being the more modest users (49 percent).
- Frame relay is the most widely deployed legacy service across all size of business segments.
- Enterprises will also lead the migration from legacy to NGN services, with 49 percent indicating that they are currently migrating or planning to migrate to other services such IP/MPLS or Ethernet. They were again followed closely by mid-sized businesses at 42 percent, with small businesses moving less aggressively at 35 percent.