David H. Deans
Technology | Media | Telecommunications
Austin, Texas | London, England
JuneJun 30 Tuesday Tue 09
Canada Beating U.S. Broadband Penetration
Worldwide broadband subscriptions will reach 466 million in 2009, representing 1.1 billion discrete broadband users, according to the latest market study by Strategy Analytics.
The total number of broadband subscriptions will surpass 800 million by 2013, implying a 14.6 percent CAGR. DSL continues to be the dominant access technology, accounting for nearly two-thirds of worldwide subscriptions.
Fiber and WiMAX, however, continue to grow share and together will account for over 25 percent of all broadband subscriptions by 2013.
The Asia Pacific region claims 41 percent of all broadband subscriptions, followed by Western Europe and then North America. North America and Western Europe likewise lead in terms of household broadband penetration.
Global penetration stood at 23 percent in 2008, and will reach 44 percent by 2013. The Central and Eastern European Region (CEE) is the fastest growing market, and is expected to grow 28 percent in 2009.
Global Broadband ARPUs will decline approximately 4 percent between 2009-2013, with service revenues reaching $291 billion by 2013.
A challenging economic environment coupled with high market maturity is putting downward pressure on subscriber growth in North America -- Strategy Analytics estimates a slight deceleration for the region.
In 2008 the North American broadband market added 6.7 million new subscribers, representing 9 percent growth over the previous year.
U.S. household broadband penetration is expected to reach 63 percent in 2009, growing to 82 percent by 2013. Penetration is significantly higher in Canada, where 79 percent of households will have broadband access in 2009.
Cable is the dominant access broadband technology in North America, accounting for over half of all household connections. Fiber rollouts by Telcos are gaining momentum, and 12 percent of broadband connections will be delivered via FTTx technology by 2009.
Service revenues for the region will grow from $46 billion in 2008 to nearly $80 billion in 2013. That said, North American broadband services still can't compete with market leaders in the Asia-Pacific and European regions -- on both competitive price and bandwidth offered.
ICT Industry Historic Market Declines in 2009
For the first time in its history, the Telecommunications Industry Association (TIA) is projecting a 3.1 percent decline in revenue for the overall global Information and Communications Technology (ICT) market in 2009 -- due to global economic conditions.
In the U.S., revenue will suffer a 5.5 percent decline in 2009.
While revenue will remain weak in 2010 -- with a modest 1.2 percent increase -- the longer-term outlook is apparently brighter. Globally, TIA projects a strong rebound for the ICT industry after 2010, citing a 6.4 percent revenue growth in 2011 and a 7.9 percent increase in 2012.
For the U.S., telecommunications revenue is expected to decrease by 6.4 percent in the next two years, but rebound by 14.4 percent during 2011-12. The effects of the current Stimulus Package, which carves out investment dollars for broadband, will enable growth throughout the ICT industry and beyond.
"Broadband will be a driver for recovery in all areas, from healthcare IT to smart grid technology, public safety networks to education, as well as for businesses and consumers," said Grant Seiffert, TIA President.
While TIA was instrumental in obtaining the $7.2 billion for broadband, other funding for energy, health IT and R&D will also spur recovery, especially in reviving some of the many jobs losses.
The sum of increased productivity and revenue amongst all other industry segments whose growth broadband deployment contributes to is often underrated and perhaps immeasurable.
Growing demand for high-volume data applications is driving all segments, say the independent, unbiased analysts at Wilkofsky Gruen Associates who help to develop the TIA Market Review & Forecast.
Despite the current recession, TIA predicts that wireless and business data revenue will grow by 73 percent during the next four years to $110 billion in 2012 from $64 billion in 2008.
Further analysis shows that economic recovery during 2011-12 will be driven by pent-up demand for ICT equipment upgrades.
Growth in data traffic will strain network capacity and stimulate investment; availability of financing will fuel investment; and broadband growth will expand the platform for VoIP and IPTV.
Will the Demand for PC-TV Tuners Recover?
Demand for PC-TV tuners has fallen off from the 2008 levels due to the worldwide economic recession, according to the latest study by In-Stat. Perhaps broadcast signal reception quality is also still an issue -- that was my prior personal experience with analog tuners.
The market also faces fundamental challenges, including slow consumer demand, increased competition from online television and other programming sources, and lower prices due to a shift from hybrid analog/digital tuners to digital-only tuners.
One hopeful development is that Microsoft's Windows 7 and the new version of Media Center will apparently include better connectivity solutions for PC-TV Tuners.
"Opportunities for growth will be for hybrid analog/digital tuner manufacturers to increase share by lowering prices, or for new entrants to leapfrog the analog and hybrid segments by aggressively targeting the emerging digital-only segments, albeit with lower margins," says Gerry Kaufhold, In-Stat analyst.
I'm actually wondering if there's such a thing as a USB Digital-Only TV tuner that delivers consistently good quality reception on a notebook computer screen -- I'll gladly write a review of a product. Contact me directly if you represent a vendor, and can provide a review sample.
Overall, selling PC-TV tuners is going to be a tougher business going forward. Will the market fully recover? We'll have to wait and see.
In-Stat's market study found the following:
- 2009 unit shipments will see a net decline of nearly 11 percent. Moderate unit growth will resume in subsequent years, driven nearly exclusively by digital-only tuner shipments.
- Worldwide PC-TV Tuner revenue likely peaked in value during 2008, at about $1.4 billion.
- The European region is by far the largest geographic market for PC TV Tuners, representing more than 50 percent of worldwide revenue.
- PC Tuner growth in Notebooks will significantly outpace other segments, which include desktops, retail sticks, and retail add-in cards.
- ATSC M&H mobile video in the U.S. may create significant upside for digital-only tuners.
IPTV Operators Adopt OTT for Differentiation
According to the latest market study by MRG, 2008 IPTV subscribers reached 1 million over its last forecast in late 2008, or 21.3 million, resulting in projected subscriber growth of 26.9 million in 2009 to over 81 million in 2013.
Systems vendor combined CapEx revenue plus service revenue will grow from $9.7 billion in 2009 to $25.6 billion in 2013.
Their new IPTV forecast for 2009-2013 is based on very detailed semi-annual analysis that MRG does on individual Service Providers and on a country-by-country basis -- including six IPTV CapEx products broken into 4 regions.
"The relatively strong market in 2008 caused CapEx transactions to flourish through the end of 2008," says Jose Alvear, MRG Analyst.
That anticipatory wave of orders kept vendor pipelines full all the way through 2008, but in Q1/2009, many IPTV vendors reported single-digit reduction in revenues, which is reflected in our flattened 2009 forecast.
One indicator that new subscriptions will remain strong is the Q1/2009 IPTV subscriber growth of 583,000 combined for U.S. Verizon and AT&T compared with 114k new subs added by the two largest U.S. Cable Operators, Comcast and Time Warner for the same period.
Also a signal of new growth is the number of new IPTV Operators in Eastern Europe and the Rest-of-World (ROW) region. The number of Service Providers in the ROW category went up from 64 companies to 84.
Countries like Colombia, Qatar, United Arab Emirates, Montenegro and the Russian federation have seen new growth in their operations, and, the ROW region will be among the fastest-growing market from 2009 to 2013 with a 29 percent CAGR.
As the IPTV market matures, many innovations are emerging, including Service Providers turning to Over-the-Top (OTT) Video applications to supplement their video-on-demand offerings.
Technical upgrades also contribute to growth, including DVRs, High-definition programming, MPEG-4/H.264, and first class system integration. Professional services growth is brought on by stronger regional partnerships of vendors and resellers that continue to move into smaller markets.
Growth in System Integration and Professional Services will also be spurred by the growth of turnkey system sales where all the components are heavily pre-integrated.
JuneJun 16 Tuesday Tue 09
IPTV Operators Adopt OTT for Differentiation
According to the latest market study by MRG, 2008 IPTV subscribers reached 1 million over its last forecast in late 2008, or 21.3 million, resulting in projected subscriber growth of 26.9 million in 2009 to over 81 million in 2013.
Systems vendor combined CapEx revenue plus service revenue will grow from $9.7 billion in 2009 to $25.6 billion in 2013.
Their new IPTV forecast for 2009-2013 is based on very detailed semi-annual analysis that MRG does on individual Service Providers and on a country-by-country basis -- including six IPTV CapEx products broken into 4 regions.
"The relatively strong market in 2008 caused CapEx transactions to flourish through the end of 2008," says Jose Alvear, MRG Analyst.
That anticipatory wave of orders kept vendor pipelines full all the way through 2008, but in Q1/2009, many IPTV vendors reported single-digit reduction in revenues, which is reflected in our flattened 2009 forecast.
One indicator that new subscriptions will remain strong is the Q1/2009 IPTV subscriber growth of 583,000 combined for U.S. Verizon and AT&T compared with 114k new subs added by the two largest U.S. Cable Operators, Comcast and Time Warner for the same period.
Also a signal of new growth is the number of new IPTV Operators in Eastern Europe and the Rest-of-World (ROW) region. The number of Service Providers in the ROW category went up from 64 companies to 84.
Countries like Colombia, Qatar, United Arab Emirates, Montenegro and the Russian federation have seen new growth in their operations, and, the ROW region will be among the fastest-growing market from 2009 to 2013 with a 29 percent CAGR.
As the IPTV market matures, many innovations are emerging, including Service Providers turning to Over-the-Top (OTT) Video applications to supplement their video-on-demand offerings.
Technical upgrades also contribute to growth, including DVRs, High-definition programming, MPEG-4/H.264, and first class system integration. Professional services growth is brought on by stronger regional partnerships of vendors and resellers that continue to move into smaller markets.
Growth in System Integration and Professional Services will also be spurred by the growth of turnkey system sales where all the components are heavily pre-integrated.
JuneJun 8 Monday Mon 09
Will the Demand for PC-TV Tuners Recover?
Demand for PC-TV tuners has fallen off from the 2008 levels due to the worldwide economic recession, according to the latest study by In-Stat. Perhaps broadcast signal reception quality is also still an issue -- that was my prior personal experience with analog tuners.
The market also faces fundamental challenges, including slow consumer demand, increased competition from online television and other programming sources, and lower prices due to a shift from hybrid analog/digital tuners to digital-only tuners.
One hopeful development is that Microsoft's Windows 7 and the new version of Media Center will apparently include better connectivity solutions for PC-TV Tuners.
"Opportunities for growth will be for hybrid analog/digital tuner manufacturers to increase share by lowering prices, or for new entrants to leapfrog the analog and hybrid segments by aggressively targeting the emerging digital-only segments, albeit with lower margins," says Gerry Kaufhold, In-Stat analyst.
I'm actually wondering if there's such a thing as a USB Digital-Only TV tuner that delivers consistently good quality reception on a notebook computer screen -- I'll gladly write a review of a product. Contact me directly if you represent a vendor, and can provide a review sample.
Overall, selling PC-TV tuners is going to be a tougher business going forward. Will the market fully recover? We'll have to wait and see.
In-Stat's market study found the following:
- 2009 unit shipments will see a net decline of nearly 11 percent. Moderate unit growth will resume in subsequent years, driven nearly exclusively by digital-only tuner shipments.
- Worldwide PC-TV Tuner revenue likely peaked in value during 2008, at about $1.4 billion.
- The European region is by far the largest geographic market for PC TV Tuners, representing more than 50 percent of worldwide revenue.
- PC Tuner growth in Notebooks will significantly outpace other segments, which include desktops, retail sticks, and retail add-in cards.
- ATSC M&H mobile video in the U.S. may create significant upside for digital-only tuners.
JuneJun 4 Thursday Thu 09
ICT Industry Historic Market Declines in 2009
For the first time in its history, the Telecommunications Industry Association (TIA) is projecting a 3.1 percent decline in revenue for the overall global Information and Communications Technology (ICT) market in 2009 -- due to global economic conditions.
In the U.S., revenue will suffer a 5.5 percent decline in 2009.
While revenue will remain weak in 2010 -- with a modest 1.2 percent increase -- the longer-term outlook is apparently brighter. Globally, TIA projects a strong rebound for the ICT industry after 2010, citing a 6.4 percent revenue growth in 2011 and a 7.9 percent increase in 2012.
For the U.S., telecommunications revenue is expected to decrease by 6.4 percent in the next two years, but rebound by 14.4 percent during 2011-12. The effects of the current Stimulus Package, which carves out investment dollars for broadband, will enable growth throughout the ICT industry and beyond.
"Broadband will be a driver for recovery in all areas, from healthcare IT to smart grid technology, public safety networks to education, as well as for businesses and consumers," said Grant Seiffert, TIA President.
While TIA was instrumental in obtaining the $7.2 billion for broadband, other funding for energy, health IT and R&D will also spur recovery, especially in reviving some of the many jobs losses.
The sum of increased productivity and revenue amongst all other industry segments whose growth broadband deployment contributes to is often underrated and perhaps immeasurable.
Growing demand for high-volume data applications is driving all segments, say the independent, unbiased analysts at Wilkofsky Gruen Associates who help to develop the TIA Market Review & Forecast.
Despite the current recession, TIA predicts that wireless and business data revenue will grow by 73 percent during the next four years to $110 billion in 2012 from $64 billion in 2008.
Further analysis shows that economic recovery during 2011-12 will be driven by pent-up demand for ICT equipment upgrades.
Growth in data traffic will strain network capacity and stimulate investment; availability of financing will fuel investment; and broadband growth will expand the platform for VoIP and IPTV.
JuneJun 3 Wednesday Wed 09
Canada Beating U.S. Broadband Penetration
Worldwide broadband subscriptions will reach 466 million in 2009, representing 1.1 billion discrete broadband users, according to the latest market study by Strategy Analytics.
The total number of broadband subscriptions will surpass 800 million by 2013, implying a 14.6 percent CAGR. DSL continues to be the dominant access technology, accounting for nearly two-thirds of worldwide subscriptions.
Fiber and WiMAX, however, continue to grow share and together will account for over 25 percent of all broadband subscriptions by 2013.
The Asia Pacific region claims 41 percent of all broadband subscriptions, followed by Western Europe and then North America. North America and Western Europe likewise lead in terms of household broadband penetration.
Global penetration stood at 23 percent in 2008, and will reach 44 percent by 2013. The Central and Eastern European Region (CEE) is the fastest growing market, and is expected to grow 28 percent in 2009.
Global Broadband ARPUs will decline approximately 4 percent between 2009-2013, with service revenues reaching $291 billion by 2013.
A challenging economic environment coupled with high market maturity is putting downward pressure on subscriber growth in North America -- Strategy Analytics estimates a slight deceleration for the region.
In 2008 the North American broadband market added 6.7 million new subscribers, representing 9 percent growth over the previous year.
U.S. household broadband penetration is expected to reach 63 percent in 2009, growing to 82 percent by 2013. Penetration is significantly higher in Canada, where 79 percent of households will have broadband access in 2009.
Cable is the dominant access broadband technology in North America, accounting for over half of all household connections. Fiber rollouts by Telcos are gaining momentum, and 12 percent of broadband connections will be delivered via FTTx technology by 2009.
Service revenues for the region will grow from $46 billion in 2008 to nearly $80 billion in 2013. That said, North American broadband services still can't compete with market leaders in the Asia-Pacific and European regions -- on both competitive price and bandwidth offered.
MarchMar 28 Saturday Sat 09
FebruaryFeb 13 Friday Fri 09
Online Video Upside Continues to Impress
Are we nearing the end of online video viewer growth? Apparently, the upside seems unstoppable -- even in the current world economy. As more data about 2008 Internet usage in the U.S. is released, online video increasingly looks like one of the year's big winners.
U.S. Internet users viewed 12.7 billion online videos during November 2008 alone, up more than one-third over November 2007, according to data released in January 2009 by comScore Video Metrix.
comScore said more than 146 million U.S. Internet users watched an average of 87 videos per viewer in November 2008 -- that's 77 percent of the total U.S. Internet audience.
eMarketer also puts online video viewers at more than three-quarters of U.S. Internet users, and estimates that percentage will rise to 88 percent by 2012. For savvy online marketers, this continued growth raises the question of how much online video can be monetized.
"Although many consumers are loath to sit through ads when watching online video, they seem even less willing to pay directly for content," said David Hallerman, senior analyst at eMarketer.
"As a result, content owners and publishers are focusing on ad-funded models. Except for movies, some premium TV fare and select sports content--which remain attached to transactional models -- most TV-oriented programming has migrated to advertising-based formats," Mr. Hallerman continued.
eMarketer estimates online video advertising spending will grow rapidly to reach $4.6 billion in 2013, up from $587 million in 2008.
Europe has Highest Mobile Service Adoption
Europe as a region has the highest adoption of mobile services at 121 percent penetration and this is expected to rise to 135 percent by 2012. At these high penetrations, overall service revenue growth through the handset is expected to decline.
However, ARPU is expected to continue growing among business users. According to a new market study by ABI Research, overall business revenue is forecast to grow at a compound annual growth rate (CAGR) of over 4 percent, a significant statistic considering that ARPU from consumer mobile services will stay flat at a CAGR of 0.1 percent.
Says practice director Dan Shey, "Not surprisingly, data services are providing the ARPU uplift driven by the uptake of smartphones, and adoption and usage of mobile e-mail and Internet services."
However, the impact of these drivers as well as others is different for business customers in different occupational segments -- the end result is a unique set of subscriber and ARPU growth rates, penetration, and total revenue opportunity by occupation.
Shey adds, "In the current economic environment, focusing resources on the right business user segments is absolutely essential. Understanding the opportunities specific to each business sub-segment will not only allow mobile suppliers to stay solvent in 2009 but will also position them for growth in better times."
Will Americans Adopt Mobile TV in 2009?
The upcoming switchover to all-digital television broadcasting in the U.S. and other major countries will create an unprecedented opportunity for mobile TV services, according to a new market study by ABI Research.
While mobile broadcast TV was pioneered in Japan and South Korea, following the switchover traditional and mobile TV broadcasters and cellular operators in many regions will launch mobile TV services that are forecast to attract over 500 million viewers by 2013.
There's an important distinction to draw between content streamed to mobile handsets over cellular networks, and free-to-air broadcasting to mobile devices equipped with mobile TV tuners.
"Mobile TV users have yet to value the medium properly because it has not been validated as an independent product and service," says senior analyst Jeff Orr. "It has been primarily offered at the end of a long list of more preferred cellular services. However, Mobile TV will soon be positioned in a more proper role as an extension of traditional broadcast TV services."
Mobile TV viewing will not solely be on cellular handsets, but also on MIDs, and automotive infotainment systems. Once the content is available and the services launched, mobile TV will enable more classes of mobile devices that are natural fits for mobile entertainment.
Who will benefit? Content developers and providers; device vendors, especially MID and cellular handset OEMs; and service providers.
Other winners: multimedia and security software, semiconductor and network infrastructure vendors. Once mobile TV users adopt the service at high growth levels, advertisers will also climb on board to target the significant number of new mobile viewers.
ABI Research believes the timing of the market's emergence is good. As 2009 progresses, signs of economic optimism may emerge, and allow the fledgling industry to establish a foothold before the holiday shopping season.
FebruaryFeb 11 Wednesday Wed 09
Bleak Forecast for Mobile Phone Carriers
After 25 years of consistent market growth, the mobile phone business now faces huge challenges this year from a bad global economy and a lack of meaningful new service features, according to the latest market study by In-Stat.
The bleak cell phone industry outlook is unprecedented, with dramatic ramifications for device manufacturers, semiconductor manufacturers, infrastructure system vendors and mobile operators alike.
"While the cell phone industry has generally been unaffected by economic ups and downs, the near future is different," says Allen Nogee, In-Stat analyst.
The current economic slowdown is more widespread and deeper than ever experienced during the cellphone's lifetime, and has spread through Europe, Asia, and North America.
In addition, this is the first year without any new major features being added, and last year's new feature, mobile TV, has had very limited success. You may recall the mobile TV anticlimactic results from last year, and the numerous studies that profiled a consistent lack of consumer interest in the service.
In-Stat market study found the following:
- Over 1.2 billon cell phones were estimated to have shipped in 2008, but the growth rate is plummeting.
- For the next five years, cell phone semiconductor revenue will only grow at a 3.3 percent Compound Annual Growth Rate (CAGR).
- Shipments of dual-mode cellular/Wi-Fi phones shipped will quadruple from 2008 to 2012.
- The market for digital baseband semiconductors in WCDMA handsets will reach more than $6 billion annually in 2012.
- In 2008, cell phone semiconductor revenue was expected to reach more than $44.5 billion, up over 6.2 percent over 2007.
A Triple-Play Promise that Never Delivered
Recent spikes in online video consumption have created an opportunity for service providers to offer an integrated three-screen video service, according to the latest assessment by TDG.
Most U.S. broadband service providers are no doubt viewing this opportunity -- especially those with expansive infrastructure investments that need to be rationalized.
"This is the trifecta of video services," notes Michael Greeson, president and principal analyst at TDG.
"Though very few have the assets and acumen to pull it off, rest assured every major cable, satellite, and mobile operator is actively pursuing a three-screen strategy. As our new research suggests, they'd be crazy not to."
As it stands today, people who want to watch TV programming and other video on their TVs, PCs, and mobile devices end up signing contracts with three different providers, receiving three different packages of content, and paying three different fees.
At some point, notes Greeson, services provider might integrate or bundle these disparate services into a single offering with one price, one point of customer contact, and one integrated electronic program guide.
However, in my opinion, the opportunity for a triple-play bonanza has come and gone from the expectations of service providers. In reality, most customers who bought the bundle "promise" typically received little more than a consolidated monthly bill.
TDG's recent study concludes:
- Approximately one-fourth of adult broadband users in the U.S. -- approximately 35 million -- are somewhat likely to sign up for a three-screen video service at a price between $65 and $105 per month.
- More than half of Three-Screen Intenders are between the ages of 25 and 44, though Intenders between the ages of 18 and 24 are significantly more enthusiastic.
- A sizable (undefined) portion of Early Mainstream consumers are poised to embrace a three-screen video offering, not just Early Adopters.
- Three-Screen Intenders are 21 percent more likely than Non-Intenders to use a game console, twice as likely to use an iPhone, and twice as likely to have a TV connected to their home network.
- 92 percent of Intenders view online video on a weekly basis, compared with 78 percent of Non-Intenders.
- Cable operators are preferred as a three-screen provider almost two-to-one over satellite TV providers.
- Real-time weather, news, and sports programming (both local and national) are among the content types most favored for a three-screen video service.
Will Online Social Networks Migrate to TV?
Rapidly growing interest in social networking has resulted in many people looking beyond the computer and mobile screens to the living room, according to a new market study by ABI Research.
A survey of over 1000 households conducted by the firm shows that consumers are looking to extend their social networks to the TV, as 36 percent of those who currently use social media on a regular basis say they would like to access their networks on the TV screen.
"Just as video entertainment is moving fluidly across various screens, so is social media," says senior analyst Jason Blackwell.
"We've seen that consumers find increased value through shared entertainment experiences and want to explore and deepen these experiences through communities of interest -- and that's what social TV will ultimately do."
When asked which types of application they would be most interested in for social TV, the answers were somewhat dependent on age. Younger consumers were more interested in engaging with their friends through chat and messaging, while middle-aged respondents were more likely to be interested in more passive social networking behavior such as checking status updates.
The most popular potential application for those over 50 who expressed interest in TV social networking was being able to see what their friends were watching on TV.
"Today we already see tens of millions of consumers engaging in communities in the living room through online console gaming services," adds Blackwell.
"Just as this interest community has seen rapid growth in the past few years, we expect the extension of Web 2.0 technologies to the living room to propel growth in new communities of interest."
FebruaryFeb 7 Saturday Sat 09
Network as the Platform for Economic Power
Do you find yourself online more often? Well, you're not alone. Americans are spending more time online, on both a daily and weekly basis. Home Internet access far outstripped work access time in 2008, according to the latest market study by Harris Interactive.
Both trends could continue in 2009, as America's growing pool of unemployed people use the Internet to search for new jobs, financial aid and 21st century skills training opportunities.
However, Americans are not the trailblazers in usage. That distinction goes to Internet users in China, who invested 44 percent of their leisure time on the Internet in 2008, according to TNS Global.
Americans now rank fifth worldwide, with 30 percent of their leisure time spent online -- virtually tied with Italy (31 percent), Spain and Australia (29 percent each).
The U.S. could potentially move up in the world rankings in coming years, especially if the Obama administration is successful in reversing the declining status of American network infrastructure within the Global Networked Economy.
Since 2001, the average amount of time U.S. adults spent online per week doubled, from 7 hours to 14 hours. Harris Interactive annual telephone poll revealed that average Internet hours grew slowly between 2001 and 2006, but took off in 2007 and increased even more rapidly in 2008.
At-home usage saw a more dramatic surge during that time, according to the USC Annenberg School "Center for the Digital Future." Their yearly survey found that U.S. Internet users spent an average of 15.3 hours per week online in 2007, compared with about 9 hours the year before.
There's reason to be hopeful that the $6 to $9 billion funding for broadband in the stimulus package proposal is a good starting point, or appropriate down payment, on the long-term investment strategy that the U.S. must undertake -- in order to achieve real progress that will turn the tide on economic competitiveness.
It's somewhat ironic that the largest communist legacy nation in the world has surpassed the world's most recognized democratic nation. Clearly, forward-looking public policy can deliver powerful results in the Global Networked Economy -- regardless of the political ideology of a country's leadership.
Netbook PCs Popular as the Second Device
In November 2008 ABI Research carried out a survey of more than 1000 adult consumers in the United States, aimed at identifying their attitudes to netbook computers and mobile Internet devices (MIDs).
The results are summarized in a Research Brief that provides critical insights into consumer perceptions of these products.
Among many other results, the research found that only 11 percent would use a netbook as their primary computer, while a massive 79 percent view netbooks as a secondary device to be used in addition to a laptop or desktop computer.
Netbooks are smaller, so they're not as easy to use or as powerful as a PC or a laptop, and generally don't include built-in CD or DVD drives. However, the flip side is that the smaller size and weight of netbooks makes them much easier to tote around the home or on-the-go.
According to ABI principal analyst Philip Solis, "While their low price does cause some consumers to view netbooks as a replacement for a laptop given the current economic conditions, the majority view a netbook as being a secondary device."
Even as a device that is secondary to the PC, this has to cut into the laptop market somewhat. When considering another laptop as an additional device mostly for browsing the web and using other Internet-based communications applications, consumers will find netbooks to be an appropriate alternative.
Home Networks Gain Digital Media Devices
Few home network users currently have permanent connections between their Consumer electronics (CE) devices and their home networks. Those that do primarily connect their game console, according to the latest market study by In-Stat.
As more connected CE devices become available, In-Stat expects Blue-ray DVD players and recorders will lead network new digital media client growth.
"The primary reasons that more devices are not connected to home networks are -- consumer awareness/knowledge, availability of network-capable CE products on retail shelves, prices of network-capable CE products, competition with non-network-capable CE products (like docking stations), and lack of perceived need by some consumers," says Joyce Putscher, In-Stat analyst.
In-Stat's market study found the following:
- Almost 43 percent of the Windows PCs used in North American homes in June 2008 had Media Center functionality, up from 32 percent in 2007.
- The worldwide media server-capable device market is estimated at $50 billion in 2008.
- In-Stat's consumer survey reveals that 64 percent of U.S. respondents are somewhat, very or extremely interested in watching Internet-based streaming video on their household TV.
- A proliferating set of competitors are offering a range of Digital Media Adapter/Player/Receiver (DMA/DMP/DMR) devices, including Apple, Cisco, Denon, Hewlett-Packard, Roku, Samsung, and many others.
Software as a Service Finds New Demand
According to IDC, the harsh economic climate will actually accelerate the growth prospects for the Software as a Service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications.
Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams. As such, IDC has increased its SaaS growth projection for 2009 from 36 percent growth to 40.5 percent growth over 2008.
"With a broad slowdown across IT sectors, businesses are increasingly bearish about their short-term ability to invest, whether for stability, growth, or cost savings down the road," said Robert Mahowald, director, On-Demand and SaaS research at IDC.
"But SaaS services have benefited by the perception that they are tactical fixes which allow for relatively easy expansion during hard times, and several key vendors finished the year very strong, reporting stable financials and inroads into new customer-sets."
IDC market study findings include:
- By the end of 2009, 76 percent of U.S. organizations will use at least one SaaS-delivered application for business use.
- The percentage of U.S. firms which plan to spend at least 25 percent of their IT budgets on SaaS applications will increase from 23 percent in 2008 to nearly 45 percent in 2010.
- This market's growth prospects will accelerate the shift to SaaS for the whole value chain as the promise of a recurring revenue stream, and the opportunity to tap OPEX and project-related dollars, will benefit the whole SaaS ecosystem.
- While demand for SaaS is strongest in North America, new contracts from customers in Europe, Middle East, Africa (EMEA) and Asia-Pacific (excluding Japan) also look particularly positive, and IDC expects that by year-end 2009, nearly 35 percent of worldwide revenue will be earned outside of the U.S.
- On the downside, IDC interviews with SaaS providers highlighted several issues, such as cash-flow shortfalls related to slow-paying current clients, liquidity challenges stemming from tight credit at lenders, and -- on the horizon -- limited resources to scale up with expanded infrastructure to support new customers and new service offerings.
Decline in Network Infrastructure Equipment
Dell'Oro Group announced that it forecasts the combined worldwide sales for access network infrastructure equipment including Cable, DSL and PON access concentrators will decrease almost 15 percent in 2009 to $4.0 billion.
Their latest market study indicates that this decrease is primarily due to declining subscriber additions and a weak global economy that will slow operator access network upgrade plans.
The report forecasts access concentrator shipment growth for Cable, PON, and VDSL in 2010 and to continue each year through 2013, the duration of the forecast period.
Meanwhile, the trend towards higher-speed networks is expected to result in sharp yearly declines in revenue for slower-speed ADSL infrastructure equipment.
"The weakening global economic situation has caused us to lower our forecast for most segments relative to our July 2008 forecast," said Tam Dell'Oro, Founder of Dell'Oro Group.
"This is especially true for 2009, but there are also implications throughout our forecast horizon even though an economic recovery is expected by 2010. We believe that operators will not change their network upgrade strategies, although we expect them to be more cautious with expenditures which likely result in slower, success-based deployments, added Dell'Oro.
About
Austin | London -- The mass-market for traditional media is vanishing, as niche-oriented Indie digital content rapidly finds its growing audience via word-of-mouth referrals on social networking sites. What are the trends in new media opportunities? Visit my Digital Lifescapes blog for the latest market research. Visit my online Portfolio for details on my social media and Web 2.0 consulting work.
David H. Deans is the Senior Partner of Deans & Associates, and the founder of GeoActive Group USA. He established this technology and digital media marketing professional services company to specialize in market research, go-to-market strategy development, plus the design and execution of targeted market development plans. Need help? Contact me via my corporate website GeoActive Group USA or connect via MySpace.
Music
British pop, folk, classic R&B and mod rock from the 60s and 70s; motown and soul; acid jazz and fusion; techno, experimental, chill, lounge and ambient soundscapes.
Interests
Writing, storytelling, sound/video mixing, independent film digital production and distribution -- the intersection between the communications and entertainment business -- new digital composition, editing, arrangement tools -- vintage content including analog keyboard samples, black and white stock film footage, etc.