Significant spending on podcast advertising

Emarketer: The total US audience for podcasts could reach 25 million by 2008, and perhaps 50 million by 2010.

The total audience for podcasts has shown meteoric growth, particularly in the USt. The active listening audience is much smaller, but it is still set to grow rapidly.

A year ago, many people had not even heard of podcasting. Yet the number of podcast listeners who have ever listened to or watched a podcast is projected to top 10 million this year and reach 50 million by 2010. Today, many major media outlets, as well as thousands of individuals all over the Web, have their own podcasts, ensuring that niche markets and interest groups are well served.

However, many of these podcast listeners are one-time users,. The key to increased spending in this new medium, is for these one-time listeners to become regular, active podcast listeners. eMarketer forecasts that the active podcast audience in the US can be expected to reach 3 million this year, 7.5 million in 2008 and 15 million in 2010.

Podcasting is not set to become a new mass-market venue, at least for the next half decade. By way of comparison, US broadcast radio still reaches close to 200 million Americans.

Nevertheless, online advertisers and marketers are paying serious attention to this new 'anywhere, anytime' channel. eMarketer projects that spending on podcast advertising will reach $80 million this year and $300 million by 2010. Podcasting: Who's Tuning In?

Podcasting: Who's Tuning In? Publ 20060228

Worldwide IP PBX Revenue Up 23%, TDM Systems Down 15% in 2005

Infonetics: The enterprise telephony market continues its steady transition from circuit switching technology to packet switching technology, with worldwide TDM system revenue falling 15% and IP PBX revenue rising 23% between 2004 to 2005. Together, worldwide TDM and IP PBX systems revenue totaled $8.1 billion in 2005, a 12% increase over 2004, and will grow 43% between 2005 and 2009, when it will reach $11.6 billion as organizations continue to move to VoIP. In that five-year span, IP PBX revenue is forecast to jump up 82% while TDM revenue will plunge 88%.

For the quarter, PBX/KTS revenue totaled $2.2 billion in 4Q05, up 1% over 3Q05, and 10% higher than a year ago. TDM system revenue was down 6% in 4Q05, and IP PBX revenue nudged 3% higher than last quarter.

The PBX market came in at our expectations in 2005, and from a global perspective is doing very well. worldwide revenue growth accelerated in 2005, although it's mostly coming from EMEA, Asia Pacific, and CALA. North America lost revenue share in 2005 as things slowed down here, showing just 4% revenue growth for the year.

• In the overall PBX/KTS systems market, Nortel, Avaya, Siemens, Alcatel, and NEC (in that order) lead in worldwide 2005 line shipments

• Nortel leads the North American IP PBX market in line shipments for 2005, followed by Avaya and Cisco, but it's a very close race among all three

• Alcatel leads the IP PBX market in EMEA in 4Q05 and for the year, followed by Siemens

• Cisco dominates the market for IP phones with 42% unit market share in 2005

• Hybrid PBXs accounted for 65% of 2005 PBX/KTS revenue, TDM 23%, and pure IP 12%; hybrids and pure IP will continue to increase through 2009 at the expense of TDM

• 44% of 2005 PBX/KTS systems revenue came from EMEA, 32% from North America, 19% Asia Pacific, and 5% CALA

Enterprise Telephony Publ 20060228

Internet Finding Few Newcomers in 2006

Parks Associates: Substantial barriers exist to luring late adopters to the Internet; 14 million households rely on Internet connections outside the home.Few new households willing to subscribe to Internet services, which will limit 2006 growth in overall Internet penetration to one percent, rising from 63% to 64% by year’s end.. A survey of 1,000 U.S. homes, there are currently 39 million homes without Internet access, and among these, only eight million own a computer, an obvious prerequisite for Internet adoption. Moreover, the majority of these PC households will not subscribe to an Internet service at any cost.

The study found only two million offline homes are planning to get Internet services in 2006. Another 300,000 homes said they might subscribe if offered a cheaper service. At the same time, 14 million U.S. households do not have Internet service at home but access the Web at work or other locations, such as a library or an Internet café.

.

The National Technology Scan (2005) Publ 20060228

Wi-Fi Chipset Market Continues Impressive Growth

In-Stat: The Wireless LAN (WLAN) chipset market is on a phenomenal growth pace that is projected to continue over the next few years. The market will soar from just over 140 million annual chipset unit shipments in 2005 to 430 million in 2009. In 2005, growth was driven primarily by mobile PCs, home/SOHO wireless routers and residential gateways, and external clients. The market has been driven primarily by traditional networking devices over the last five years, as well as embedded Wi-Fi in mobile PCs. But the market is shifting, as it will be increasingly buoyed by new categories of devices such as handheld games, gaming consoles, cell phones and printers.

• Broadcom, Atheros, and Intel were the market leaders in 2005, each ruling specific market segments.

• In 2007 and 2008, the phone segment will noticeably emerge, driven by embedded Wi-Fi in cellular phones.

• In 2005, overall chipset revenues were expected to reach almost $1 billion.

Wi-Fi Chipset Fever: 140 Million and Growing Publ 20060228

Smartphones 2009 premium prices and global supersize. Smartphone Forecast: Shipments to More Than Double in 2006

ABI: Smartphones' premium prices and supersized form factors have historically combined with a limited demand for advanced data services to restrict them to niche market status. But 2006 will bring a growth spurt in the smartphone market that will see worldwide shipments more than double. The 123 million units that ABI Research forecasts will be shipped this year will give smartphones nearly a 15% share of the mobile phone market. What will drive the expansion of smartphones beyond the current core market of early adopters? Mobile Wireless Research, five factors lie behind the devices' growing momentum. Increasing demand for robust data communications applications — especially mobile email and instant messaging — will play a role, particularly as 3G speeds improve the appeal of mobile data services. With increasing sales volumes, prices are falling fast, while the choice of models on offer is growing rapidly (39% more models were available in 2005 than in 2004). Even as their functionality expands, smartphones are shrinking in size, offering lower power consumption and longer battery life. Finally, Wi-Fi is reaching into the smartphone, and we expect to see fully a quarter of all models offering embedded Wi-Fi by 2010. But behind attrsaidctive interfaces and powerful applications lie operating systems, and the shifting tides of OS adoption will be at least as important as any other factor in determining the shape of the future market. With the Palm OS moribund, Linux is finding increasing favor, with industry heavyweights such as Motorola, Samsung, NEC and Panasonic among its backers. The Windows Mobile OS is gaining ground too, notes Solis, while Symbian, whose OS is currently the hands-down market share winner, is attempting to stave off competitors by halving its license fees for volume deals. The Smartphones study explores the smartphone's role of combining communications and computing as an extension of the PC, the Internet, and the corporate intranet; it analyzes how major mobile operators around the world are increasing the number of smartphones they offer in order to attract and retain customers looking for high-end services. It forms part of the firm's subscription Mobile Devices Research Service , which includes a number of research reports, regular market updates, forecast and industry databases,. Smartphones: The Next Phase of worldwide Publ 20060228

Regional Analysis: Top Six Vendors Drive worldwide Mobile Phone Sales to 21 Percent Growth in 2005

In Western Europe, sales of mobile phones totaled 49.1 million units in the fourth quarter of 2005 and 164 million units in 2005. Consumers took advantage of Christmas promotions and upgraded their phones to newer and trendier phones. The trend in the fourth quarter was all about fashion, with phones such as the Motorola pink razr v3 and the Siemens CL75 Poppy capturing consumers' interest,. In countries such as the UK, people were even prepared to subscribe to a new contract before their existing contract ended in order to acquire the pink razr phone. The same trend of upgrading to trendier phones occurred in the more mature markets in Central Eastern Europe, the Middle East and Africa (CEMEA), as first time subscribers continued to join networks and mobile phone sales for the year reached 153.5 million units. The region's growth in 2006 to be fuelled by increased replacement sales in Eastern Europe and the Middle East, but mainly by new subscriber growth in Africa. In North America, the fourth quarter was a record quarter with mobile phone sales reaching 41.3 million units. In 2005, sales reached 148.4 million units. Consumers continued to upgrade their phones with camera devices and unique form factors such as the Motorola razr V3. The region also experienced strong growth in the prepaid phone segment. Sales of mobile phones in Latin America reached nearly 102 million units in 2005, a 40 percent increase from 2004. However, the explosive growth experienced over the past few quarters is slowing. We expect year on year growth in the region in 2006 to be in the high single-digits. In Asia/Pacific, mobile phone sales reached 56.4 million units in the fourth quarter of 2005 and 204 million units in 2005. Sales in the region were fuelled by key markets such as China and India. In China, sales were driven by strong growth in global System for Mobile Communications (GSM), while in India, subscriber additions in November and December exceeded all previous performances. Mobile phone sales in Japan totaled 11.7 million units in the fourth quarter of 2005, and totaled 45 million units for the year. Music player functionality fuelled replacement sales especially by young users. Looking ahead to results for the first quarter of 2006 , Chinese New Year, prolonged Christmas and New Year sales promotions in Western Europe and North America, as well as continued growth in emerging markets, will all contribute to strong sales in the first quarter of 2006. Based on preliminary data for the first two months we expect to see a similar trend as in the first quarter of 2005 with a drop over the previous quarter in the region of five to eight percent.More information is available in the Gartner report Market Share: Mobile Terminals, worldwide, 4Q05 and 2005.

Worldwide mobile phone sales

Publ 20060228

Top Six Vendors Drive worldwide Mobile Phone Sales to 21 Percent Growth in 2005

Gartner: Worldwide mobile phone sales totaled 816.6 million units in 2005, a 21 percent increase from 2004, as the leading six vendors increased their share of the market at the detriment of smaller vendors. The top six vendors accounted for 79.4 percent of worldwide mobile phone sales in 2005. These leaders experienced a steady increase in market share throughout the year, as their market share increased from 78 percent in the first quarter to 84 percent in the fourth quarter of 2005. As competition continues to drive price pressure in the low-end, and a design and technology arms racein the high-end, the survival of the fittest depends more and more on economies of scales, or very carefully cut out niche markets. In the fourth quarter of 2005, the mobile phone market remained strong with sales exceeding 235 million units (see Table 1). This is yet again the biggest quarter on record since Gartner started tracking the market on a quarterly basis in 2001. The industry experienced record sales due to continued strong growth in emerging markets, where falling prices for cellular connectivity (phones and subscriptions) resulted in higher-than-expected sales. In more mature markets, such as Western Europe and North America, replacement sales were driven by users that gave into the charm of highly fashionable devices. Table 1 worldwide Mobile Terminal Sales to End-Users in 4Q05 (Thousands of Units)

Company	4Q05 Sales	4Q05 Market Share (%)	4Q04 Sales	4Q04 Market Share (%)
Nokia	82,218.3	35.0	64,387.3	33.0
Motorola	41,884.0	17.8	31,744.3	16.3
Samsung	28,385.4	12.1	23,883.7	12.2
LG	16,875.0	7.2	13,340.5	6.8
Sony Ericsson	16,118.7	6.9	12,335.8	6.3
BenQMobile	11,101.7	4.7	12,821.0	6.5
Others	38,546.6	16.3	36,807.9	18.9
Total	235,129.7	100.0	195,320.5	100.0

Note* This table includes integrated digital enhanced network (iDEN) terminals. It excludes original design manufacturers to original equipment manufacturer shipments and .Code Division Multiple Access Wireless Local Loop (CDMA WLL) Source: Gartner Dataquest (February 2006) More tebles in press release. Nokia remained the worldwide leader with 32.5 percent of all mobile phone sales in 2005 (see Table 2). It now has a market share that is more than double that of its nearest competitor in Europe and Asia, and more than three times its nearest competitor in Eastern Europe, the Middle East and Africa. After a difficult 2004, Nokia bounced back bringing to market successful products like the 6680, highly stylish products such as the 8800 and it took the lead in the Wideband Code Division Multiple Access (WCDMA) market with products such as the n70. To illustrate Nokia's performance, more than one third of the world's phone users bought a Nokia phone in the fourth quarter of 2005. With sales just under 42 million units in the fourth quarter of 2005, Motorola retained the number two spot in Western Europe and at a world-wide level. It remained the preferred brand in North America and displaced Samsung from the number two spot in Asia Pacific. In 2005, thinwas definitively better for Motorola that recorded the largest market share growth among the top manufacturers in 2005. Samsung remained in the third position in the fourth quarter of 2005 with sales totaling 28.4 million units. For 2005 its market share remained static at 12.7 percent, with only a 0.1 percentage point gained from 2004, widening the gap with Motorola. This is mainly due to Samsung favoring margins over market share and the decision not to enter the price war in the emerging markets.

Worldwide mobile phone sales

Publ 20060228

Optical long haul recovers in 2005 with 32% gain

Infonetics: Worldwide optical revenue increased 19% between 2004 and 2005, to $10.7 billion, driven by strong growth in the metro equipment segment (up 15%) and the long haul segment (up 32%). 2005 was the first time we've seen a gain in the optical long haul segment since 2001, a good sign that carriers realize that investing in today’s long haul equipment will save them money in the long run through operational returns. The new long haul WDM equipment provides greater efficiencies through ROADMs and other advanced features, enabling carriers to address competitive pressures, rising broadband traffic, and IPTV opportunities. As more carriers upgrade their networks, we'll see steady growth in the optical market at least through 2009.

Although the long haul segment is improving, the bulk of spending continues to be in metro optical equipment, which made up 71% of all optical network hardware revenue in 2005, compared to long haul’s 29%. This 70:30 ratio will remain about the same through 2009, as increased corporate network traffic, storage networking, consumer broadband demands for services such as IPTV, and service provider wireless network backhaul investments continue driving metro spending.

• Optical network hardware revenue was up 10% to $3.0 billion between 3Q05 and 4Q05, fueled by gains by Adva, Alcatel, Ciena, Corrigent, ECI, Huawei, Siemens, Tellabs, and others; Cisco, Fujitsu, and NEC were down for the quarter

• Alcatel continues in first position for worldwide optical network hardware revenue share in 2005, followed by Nortel, Huawei, Fujitsu, and Lucent

• In 2005, WDM hardware made up 32% of total optical revenue and will increase to 40% in 2009; WDM ROADM switch hardware made up 19% of WDM revenue and will increase to 37% in 2009

• North America accounted for 32% of total optical network hardware revenue, EMEA for 33%, Asia Pacific 29%, and CALA 6% in 2005

Optical Network Hardware Publ 20060227

Corporate Buying of Wireless Services and Equipment in 2005

In-Stat: Because of their ability to generate higher average revenues per user (ARPU), business customers continue to represent one of the most attractive market segments for wireless carriers. As they seek to expand this lucrative subscriber base, carriers need to better understand the dynamics and drivers of corporate wireless buying decisions and tailor their offerings to effectively meet the unique needs of these business users. To better help wireless carriers understand this important market recently completed an in-depth study based on a survey of more than 600 wireless decision-makers in the US. More than 40% of the respondent business wireless decision-makers were senior executives (e.g., president, owner, c-level executive) and more than 30% were IT or department managers.

• Overall, the average monthly bill for voice services was $87.74, with respondents reporting that average monthly bills had fallen significantly for small- and medium-sized businesses while rising somewhat for larger businesses.

• While businesses still spend on average about two-thirds of their monthly budgets on wireless voice and one-third on wireless data, the split in very large organizations has narrowed to only 56% voice versus 44% for data.

• Besides service quality, price, and coverage, availability of flexible billing options is the most important factor influencing wireless provider selection, with the availability of Service Level Agreements (SLAs) growing in importance among large enterprise customers..

• The survey found that Verizon Wireless's business customers are most satisfied with it as a primary provider; Sprint and T-Mobile’s customers are least satisfied, with organizations that listed them as primary wireless providers most likely to switch carriers.

• Wireless data usage is increasing, with the vast majority (93.5%) of responding companies using wireless data somewhere in their organizations, either on a limited or a widespread basis. Within those organizations using wireless data, on average, 48% of employees have access to the technology.

• Respondents reported a strong overlap between use of wireless providers and related wireline providers, and 31% reported they receive integrated bills.

Corporate Buying of Wireless Services and Equipment: 2005 Publ 20060227

SIP Gateways, Wireless Gateways and Hybrid Fiber Gateways Boom as worldwide Gateways Grow

Total worldwide sales revenue for signaling gateways, media gateways, media servers, and session border controllers is expected to increase at a compounded rate of nearly four percent over the next five years. This specialized equipment enables traditional phone networks to interconnect to and move data across the Internet. During 2005, nearly $2.2 billion worth of gateway technology was sold in global markets; by 2010, sales of new gateway gear will increase to $2.6 billion annually. SIP.

Insight’s newly-released market analysis report, SIP, SS7 and Gateways: A Transaction View of Next-Gen Operations 2005-2010, Publ 20060227

As Enterprise Network Complexity Rises, Outsourcing to a Managed Service Provider Increases Savings

InSight: The US managed services market will grow at a compounded rate of 22 percent over the next five years due to growth in all segments of the managed services value chain. In today’s sophisticated communications environment, it is the managed service providers that are in the best position to assist the enterprise customer as the promise of new IP capabilities greatly increases management complexity. Thus, revenues associated with the managed services market will grow from $34 billion in 2006 to nearly $94 billion in 2011.

Insight’s newly-released market analysis report, Managed Services in an IP world: New Opportunities for Wireless and Wired Networks 2006-2011,

Publ 20060224

Exploding Consumer Demand For Digital Music And Radio Transforms Automotive Entertainmen

Strategy Analytics : Emerging Digital Audio Products Drive $36 Billion Multimedia Market. The new automotive infotainment report, Forecast 2005-2012, predicts that increasing demand for new digital entertainment features in the car will result in the automotive multimedia systems market reaching 97 Million units by 2012. The average revenue per system sold will increase rapidly, to $375-an increase of over 20 percent over 2005 figures.

Japanese suppliers, most notably Alpine, Panasonic, Kenwood and Pioneer, are taking the market lead in rolling out the widest range of features, particularly audio systems capable of playing compressed music files and digital radio, and offering connection for portable MP3 players. Over a third of all new car buyers in each of the US, France, Germany and the UK intend to purchase an MP3 player in the next 12 months.

By far the most significant trend set to hit automotive entertainment in the next 2 years is the rapid adoption of digital music. Almost half of new car buyers in the US, France, Germany and the UK intend to bring compressed format music files into their cars in order to play music through their audio systems. Radio also remains a very strong automotive entertainment media, but in-car radio and music listening habits vary significantly across countries.

Automotive suppliers who best understand demand trends for multifeatured audio entertainment outside the vehicle will be most successful at unlocking new opportunities inside the vehicle. By its very nature, a car provides an audio environment. But there is a real danger that too many automotive manufacturers will miss key consumer demand trends by getting distracted by the recent growth in portable navigation and DVD video. In-vehicle Infotainment Systems Market Publ 20060223

By 2008 there Will Be a Predicted 100 Million Digital DTH Pay-TV Subscribers

Research and Markets: Digital Direct-to-Home (DTH) pay-TV revenues continue to grow at a faster rate than subscribers, as annual average revenue per user (ARPU) grows with price increases and additional services. Revenues will be US$46 billion in 2005 and will rise to US$80 billion in 2009.

In countries where DTH pay-TV has been available for over five years, as in North America and Europe, the market is mature and subscriber growth is slowing. Where DTH pay-TV platforms were launched after 2000, subscriber growth rates are higher. In India, for example, DTH pay-TV subscribers are expected to have tripled in 2005.

-- The digital DTH pay-TV market is now in its 12th year, with 60 platforms in countries around the world.

-- By the end of 2008, there will be 100 million digital DTH pay-TV subscribers, continuing the DTH reign as the top digital TV platform.

-- The expected launch of a DTH pay-TV platform in China in 2006 or 2007 will help make Asia the fastest-growing region for DTH pay-TV subscribers.

The report, Worldwide Digital Satellite Pay-TV Market covers the top digital DTH pay-TV platforms worldwide, and discusses the DTH market in each country with a DTH pay-TV provider. Also included is information on new platforms launching in India and China, as well as plans for new HD and DVR services. Five-year forecasts for digital DTH pay-TV subscribers, revenues, and annual ARPU by region are provided.

Worldwide Digital Satellite Pay-TV Market DTH? Red Viking Publ 20060223

Has the Video Game Sector Lost its Mojo?

eMakreter: - 40 million households in the US have a game console - 70 million US Internet users regularly play games online - By 2010 there will be over 420 million broadband households worldwide (approximately 900 million broadband users), which will drive games distribution online.

Online video gaming is likely to be the engine of innovation going forward, The widespread adoption of broadband, combined with the developing online capabilities of the game consoles, does provide smaller independent game producers and publishers with the potential to distribute niche and experimental games via the Internet directly to the user.

eMarketer forecasts that by 2010, 22% of all video game software revenues worldwide will be generated via digital downloads, up from only 8% in 2005.

Microsoft's second-generation console, X-Box 360, was launched in late 2005, but has yet to take advantage of its 'first-mover advantage' because the supply of units has not kept up with demand. Sony's Playstation 3 and Nintendo's Revolution boxes are slated to launch in the latter half of 2006, which should make 2007 the year to watch. Video Games: Where to Now? Games? Wkipedia Red Viking Publ 20060223

Regulations and Red Tape Fuel Hybrid Set-Top Box Markets

ABI: These days it's not just the roads that are full of hybrids. A new breed of set-top box (STB) that will receive and decode broadcast video content from satellite, terrestrial, or cable networks and interactive wireline services such as video-on-demand is finding its way into more and more households. These hybrid boxes are the result of government regulations and red tape that limit the kind of electronic content that particular kinds of companies can supply to the public. They also provide a faster time to market for existing broadcast operators that wish to include interactive video services. The move to this format has been sparked by two scenarios. In some countries, franchising and regulatory requirements do not allow telecom operators to broadcast certain kinds of information — essentially, they can't provide programming. So telecom operators are packaging existing satellite, terrestrial, or cable video services with interactive video-over-IP. On the other hand, DTT or satellite operators that already have broadcast approvals are giving their customers an STB that allows them to receive those satellite over-the-air signals as well as enabling interactive video-on-demand. Companies that offer over-the-air services are worried about losing customers because they lack a wireline service allowing interactivity. For example, Rupert Murdoch's BSkyB has purchased Easynet, a British DSL company, and market-watchers speculate about a combination of its DSL network with BSkyB's video service. The interest in IP-capable STBs is already well-established and growing, and it may offer a wide range of practical solutions in divergent markets around the world. Some will offer a stripped-down version perhaps on-demand only. In other markets — particularly the US and some Western European countries - it will be the most advanced kind of video service with all the ‘bells and whistles.' It's a pretty flexible business model that can be adapted to the demands of the market. orldwide Set-Top Box Markets: CATV, DBS, IP, DTT Publ 20060223

CMTS Market Up 10% in 2005

Infonetics: Worldwide CMTS revenue and port shipments were up for the year but down for the quarter, as Cisco, Motorola, and Arris led the market to a 25% port gain and a 10% revenue gain, from $667 million to $736 million, between 2004 and 2005.

The worldwide CMTS market is forecast to grow 50% between 2005 and 2009, when it will top $1.1 billion.

After a 15% jump in revenue between the second and third quarters of 2005, CMTS revenue dropped 6% in 4Q05 to $198 million, but steady growth is expected for the next few years, with revenue hitting $234 million in 4Q06, a 18% increase over 4Q05. Port shipments were also down for the quarter, with upstream port shipments dropping 6% and downstream port shipments down 10% in 4Q05 from 3Q05.

The number of worldwide cable broadband subscribers totaled 46.4 million in 2005, a 14% jump from 2004, and is expected to increase another 50% between 2005 and 2009, when it will reach 69.6 million.

Cable subscribers continue to grow at a healthy clip around the world, particularly in North America and EMEA, despite the growing momentum behind lower-cost xDSL offerings and the rollout of PON and fiber-based services by incumbent telcos,” North American MSOs continue to chip away at incumbent telcos by rolling out bundled voice, data, and video services with broadband data speeds far exceeding what most DSL providers can offer today. With CMTS vendors adding enhanced capabilities and bandwidth to their existing platforms, MSOs are in a good position to make further inroads over the next few years.”

• On the 2005 leadership board, Cisco maintained its number-one position in worldwide CMTS revenue, followed by Motorola and Arris; the three CMTS titans improved their revenue market share from a combined 85% in 2004 to 95% in 2005

• For the quarter, Cisco’s worldwide CMTS revenue share dropped 7%, Motorola’s increased 5%, Arris’s increased 6%, and BigBand dropped 4%

• In 2005, 81% of CMTS ports were upstream, and 19% were downstream

• 53% of 2005 CMTS revenue came from North America, 21% from EMEA, 19% from Asia Pacific, and 7% from CALA

CMTS Hardware CMTS? Answers Wikipedia Red Viking Publ 20060223

Wireless venture capital is about to hit an all-time high

Investments in wireless technology maintained strong growth recently and are bucking the general venture capital investment trends that have witnessed overall decline from 2000 to 2005. The portion dedicated to wireless investments is on the increase, and will continue to do so, hitting an all-time high in 2006.

Wireless was a significant growth sector for venture capital investment in 2005. During 2005, 152 wireless-related companies received $1.3 billion in funding, a 24% increase over 2004's $1.1 billion. Wireless accounted for 7% of total VC investment last year, a figure that will rise in 2006 and beyond. The bulk of telecom investment today - around 60% - is in wireless and related technology, including networking, infrastructure, semiconductors, mobile computing, content and services.

Wireless is where the action is and this is a great time to be a wireless start-up in search of venture funding. The focus of private equity investors is squarely on the rapidly growing, global wireless market. Longer term, we expect the movement towards financing wireless start-ups outside the US to grow, as major funds are earmarking funds for start-ups in Asian countries, such as China and India.

As the US public markets remain weak and private equity investing grows outside the US, we will see many more IPOs of wireless companies taking place in the public markets outside the US, such as the London Stock Exchange's AIM.

Historically, venture capital investment has shown strong support for technology-oriented businesses, particularly companies and industries that develop and rely upon information technologies. The rationale is simple: these are growth industries. Most venture capital firms are led by successful high-tech entrepreneurs or individuals who have successfully financed them.

Venture-backed M&As in the telecom/wireless remained strong in 2005 and all indicators point to continued strength in this area in 2006, particularly with IPOs as stock markets rebound. This is particularly relevant because of the dearth of IPOs in the technology sector over the past five years. The largest deal of 2005 was the $4.1 billion acquisition of VoIP company Skype by eBay. Looking forward, one eagerly anticipated IPO is Vonage, the US-based VoIP service provider, and it is likely that an IPO will take place in 2006.

However, risks still remain, warns visiongain. During 2005, there were only three venture-backed IPOs in the US telecoms sector. The stock of each of these firms has declined since their IPOs, which does not provide a great deal of confidence to investors in telecom IPOs. Only one 2005 telecom IPO did well: the stock of Neustar, a service provider to wireless and wire line operators, gained post-IPO. However, Neustar was not a venture-backed offering. Wireless venture capital

Publ 20060223

U.S. Wireless Market Revenue Rises 10.7% in 2005

TIA: Revenue in the U.S. wireless market totaled $174.7 billion in 2005, up 10.7 percent from 2004, with an acceleration in handset revenue and a ramp-up in new wireless subscribers as key drivers of growth. The wireless handset and device market totaled $15 billion in 2005 and is expected to increase 19.3 percent in 2006 climbing to $17.8 billion. Twenty-five million new wireless subscribers were added in 2005, more than in any other year, and the 21.4 million subscribers added in 2004 matched the previous high in 2001. The overall wireless market, including transport services, devices, wireless equipment and services in support of the wireless infrastructure, to grow at an 11.0 percent compound annual growth rate (CAGR), reaching $265.2 billion in 2009. While demand for wireless communications remains strong, there are limits to its subscriber growth potential, as nearly two-thirds of the U.S. population has already subscribed to a wireless service. As a result, carriers are encouraging the development of new wireless applications that will boost average revenue per user. Growth in wireless revenue will be driven by additional minutes of use for voice services, subscriptions to wireless data packages, additional revenue-generating applications and subscribers' willingness to trade up to more comprehensive, and more expensive, plans resulting in increased revenue per subscriber. TIA expects a drop to single-digit increases in wireless subscribers (wireless telephony and paging) beginning in 2007, with growth averaging 8.2 percent on a compound annual basis through 2009, when there will be an estimated 278.5 million wireless subscribers, representing 88 percent of the population. Revenue generated from all wireless services rose 14.8 percent in 2005 to $118.6 billion. TIA expects revenue to increase to $180.4 billion in 2009, growing 11.1 percent on a compound annual basis. The recent pick-up in wireless subscribership reflects, in part, moderating price increases and the introduction of new uses for wireless communications devices (wireless phones, pagers, PC cards and personal digital assistants (PDAs)). Revenue in the wireless device market rose 22.6 percent in 2005 reaching $15 billion as a 25.4 percent increase in wireless phones offset a 21.6 decline in pagers and a 5.9 percent decrease in PDAs. The emergence of new mobile applications such as video and music will continue to fuel both the subscriber and handset markets. Wireless phones comprise 94 percent of the total wireless device market, with revenue reaching $14 billion in 2005. The overall wireless device market is expected to increase from $17.8 billion in 2006 to $24.5 billion in 2009 growing at a 13.1 percent CAGR. Overall wireless equipment revenue totaled $29.4 billion in 2005 and is expected to grow at an 8.3 percent CAGR reaching $40.4 billion in 2009. With the continued expansion of third-generation network coverage and the near-term licensing of advanced wireless services spectrum, a substantial roll-out of third-generation infrastructure will contribute to capital spending during the next few years. Capital expenditures revenue will grow at a 7.5 percent CAGR reaching $32 billion in 2009. Spending on services in support of the wireless infrastructure rose 18.0 percent in 2005, accelerating from the 13.6 percent increase in 2004. New wireless applications and wireless infrastructure upgrades are fueling growth in this area. Total spending on services in support of wireless infrastructure in the United States will increase to a projected $20 billion by 2009, up 14.1 percent CAGR from the $11.8 billion total of 2005. TIA's 2006 Telecommunications Market Review and Forecast Publ 20060224

Animation industry in China - and global

Research and Markets: In 2004, the global production value of gaming, animation and derivative products reached over $500 billion. The animation industry has become the biggest industry in the UK and the second biggest in Japan. The production value of the Chinese animation industry recorded over RMB 30 billion in 2004, RMB 70 billion in 2005 and is projected to reach RMB 300 billion in 2009.

The author believes that an environment conducive to the development of the Chinese animation industry has been securely formed; and that since the industry chain is becoming increasingly mature, the industry will start developing rapidly after several years of adjustment. An upsurge in Chinese animation investment, which is represented by substantial private capital in Jiangsu and Zhejiang provinces, has caused Hangzhou (capital of Zhejiang province) to become a significant animation base in China. Animation manufacturers such as Hengdian Group and SNDA will become the first Chinese animation manufacturers with international competitiveness. The continued development of the animation industry will bring about a profound impact on TV program markets. China-made animation programs will reach 70% of the overall Chinese TV animation market by the year 2009.

China TV Industry 2005

Publ 20060223

IP router and switch market posts impressive 13% growth in 4Q05.

Ovum-RHK: Alcatel and Tellabs lead market share gainers. Analysis of fourth-quarter 2005 results for IP service infrastructure vendors. Revenues for the segment grew 13% versus last year, and 2% sequentially.

4Q05 and full-year 2005 highlights for the IP services infrastructure market include:

• 4Q05 revenues: $2.1 billion, up 13% versus 4Q04

• 2005 revenues: $8.1 billion, up 12% compared to full-year 2004

• Cisco revenues were down 1% sequentially; up 6% versus 4Q04

• Juniper revenues increased 3% sequentially; up 18% versus 4Q04

• Alcatel revenues increased 17% sequentially; 45% versus 4Q04

• Redback revenues increased 63% sequentially; 85% versus 4Q04

• Tellabs revenues increased 120% sequentially from a small base

• Cisco lost over a point of market share; Tellabs gained a point.

With strong sequential growth of 11%, North America outweighed 3-5% declines in Europe, Asia-Pacific and Latin America, resulting in an overall market increase versus 3Q05. Edge IP/MPLS routers grew most strongly among product groups, with 4% growth. IP/Ethernet switch/routers grew 2%. The core IP/MPLS and ATM/MPLS switch categories were essentially flat compared to 3Q05.

The big story continues to be the continuing fragmentation of the edge market with Alcatel, Tellabs and Redback Networks all experiencing strong growth in 4Q05, . Ethernet VPNs, Ethernet-based broadband aggregation, wireless aggregation and frame relay/ATM interworking are creating new opportunities, in addition to the IP-VPN and dedicated Internet access applications which Cisco and Juniper have historically dominated. Seery also noted that the overall segment growth of 12% for the year is similar to growth seen in operator capex. Fourth-quarter 2005 results for IP service infrastructure vendors Publ 20060221

Color Printers Drive worldwide Page Printer Market to 19 Percent Growth in 2005

Gartner: Worldwide page printer shipments exceeded 21.4 million units in 2005, a 18.6 percent increase from 2004 shipments of 18.1 million units. Color page printer shipments totaled 3.1 million and increased 44.3 percent in 2005, while monochrome page printer shipments reached 18.4 million units, up 15.1 percent from 2004. Vendors experienced significant growth in the color page printer market due to aggressive pricing, as the average selling price of these devices declined 21 percent in 2005. Monochrome page printer shipments remain strong due to the growth in small and midsize business (SMB) and remote workers that need inexpensive printers. Hewlett Packard continued to lead the worldwide page printer market, as it accounted for 49 percent of all printer shipments in 2005 (see Table 1). HP adjusted pricing of low end monochrome lasers to stem their losses, focused on upgrading their current monochrome install base to new networked printers and expanded their color page printer offering. Table 1 worldwide: Page Printer Vendor Shipment Estimates, 2005 (Thousands of Units)

Company	2005 Shipments	2005 Market Share (%)	2004 Shipments	2004 Market Share (%)	2004-2005 Growth (%)
Hewlett-Packard	10,527,966	49.0	8,828,405	48.7	19.3
Samsung Electronics	1,874,820	8.7	1,901,933	10.5	-1.4
Lexmark	1,268,089	5.9	1,131,213	6.2	12.1
Brother	1,178,039	5.5	1,018,642	5.6	15.6
Canon	1,154,203	5.4	909,492	5.0	26.9
Other Vendors	5,468,926	25.5	4,322,420	24.0	26.5
Total	21,472,043	100.0	18,112,105	100.0	18.6

Source: Gartner Dataquest (February 2006) Mature markets grew at low double digit rates while emerging market grew at significantly higher rates demonstrating the broad strength in the page printer market .Page Printer Market Publ 2006022

600 Billion bits Across the Atlantic

Telegeography: Level 3 made waves in the subsea capacity market last week when the company announced the purchase of up to 600 Gbps of capacity on the Apollo trans-Atlantic submarine cable system. With the immediate purchase of 300 Gbps and an option to acquire an additional 300 Gbps, this sale represents the single largest purchase of lit subsea capacity ever by an individual carrier. Overall the purchase of 300 Gbps represents 6 percent of the 5.2 Tbps of lit trans-Atlantic capacity.

What factors drove this purchase? First of all, internet traffic across the Atlantic is growing rapidly. TeleGeography data reveals that average trans-Atlantic internet traffic grew 42 percent between 2004 and 2005. Level 3 announced that their traffic has doubled in the past 12 months, which is significantly faster than the aggregate traffic growth.

Second, and perhaps more importantly, trans-Atlantic prices appear to have bottomed out. The price for a 10 Gbps wavelength – under $20,000 per month – has sunk below both operational and replacement costs. Although the price and terms of the agreement between Level 3 and Apollo were not announced, this purchase could signify a shift from short-term annual leases driven by cost considerations to a long-term strategic approach to network building. This purchase is a big step by Level 3. They recognize that prices are at unsustainably low levels and that they are confident in their networks' need for a significant amount of additional capacity over the long-run.

Trans-Atlantic cable operators stand to benefit if other carriers follow Level 3's lead and make plans to secure long-term capacity. Another bulk capacity purchase by a consortium of major carriers reported by TeleGeography in July 2005 is still in the works, which could bring additional stability to the market.

Global Bandwidth Research Service. Publ 20060222

Worldwide Server Market Slows in Fourth Quarter But Grows to $51.3 Billion in 2005, Highest Revenues in 5 Years

IDC: worldwide Quarterly Server Tracker, factory revenue in the worldwide server market declined 0.2% year over year to $14.5 billion in the fourth quarter of 2005. This was the first year-over-year quarterly decline in revenue since the first quarter of 2003, as year-over-year quarterly compares become more difficult. worldwide server unit shipments growth slowed modestly to 10.6% in 4Q05 when compared with the year-ago period.

Volume systems grew 7.3% year over year and the segment continue to be the catalyst for growth for the server market overall, gaining favor with SMB and enterprise customers alike. After four consecutive quarterly increases, revenue for midrange enterprise servers declined 11.5% year over year and the high-end enterprise server market showed a 1.7% decline year over year, the fifth consecutive quarter of declining revenue for high-end enterprise servers.

The volume server market continues to evolve as richer server configurations driven by both scale-out cluster implementations and scale-up server virtualization initiatives continue to drive increased customer spending. However, even in the volume segment, the quarterly unit shipment growth of 11.5% was two-thirds the year-over-year unit growth rate observed in 4Q04, illustrating a transition towards more richly configured systems in the market. This evolution is driven by IT managers increased desire to consolidate and virtualize their server infrastructures as they seek to maintain balanced and manageable IT growth in the future.

• The Windows server market continued to show solid growth, with factory revenues increasing by 4.7% year over year. Overall, Windows servers accounted for $4.9 billion in 4Q05, representing 33.6% of quarterly server market revenue. For all of 2005, Windows server revenues were $17.7 billion, which means that for the first time the Windows server segment modestly exceeded spending for Unix servers as customers deployed more fully configured Windows servers in support of scalable enterprise workloads and server virtualization projects.

• Linux servers generated $1.6 billion in quarterly revenue, the fourteenth consecutive quarter of double-digit growth, with year-over-year revenue growth of 20.8%. For the full year, Linux server revenues were $5.7 billion, placing it in third place for the first time from an operating system perspective as customers continued to expand the role of Linux servers into an increasingly wider array of commercial and technical workloads.

• Unix servers experienced a 5.9% decline in factory revenue year over year to $5.0 billion for the quarter with worldwide Unix revenues for the quarter representing 34.3% of overall quarterly factory revenue. For all of 2005, Unix server revenues were $17.5 billion, moving the platform from sole possession of first place from an operating system perspective for the first time in more than a decade.

Each platform offers its own advantages in terms of workloads and customer preferences, and there is substantial overlap in terms of ISV applications that run on many of these server platforms. Although the trend is towards volume systems, we do not believe that any one platform will be in a position to force another platform out of the marketplace for many years to come.

• IBM retained the number 1 spot in the worldwide server systems market with 38.4% market share in factory revenue, growing its revenue by 0.8% when compared to the same quarter one year ago. HP continued to hold the number 2 spot in terms of factory revenue with 26.8% share, growing revenue 3.8% compared to 4Q04 and gaining 1 point of market share overall.

• Dell maintained third place with 9.6% factory revenue market share in 4Q05. Dell experienced 7.3% revenue growth compared with 4Q04, while fourth place Sun experienced a year-over-year revenue decline of 10.9% in 4Q05 to 8.2% market share.

• Fujitsu/Fujitsu-Siemens earned a fifth place standing in terms of factory revenue with 4.3% market share. The Fujitsu Group of companies saw a 10.9% factory revenue decline year over year.

• In terms of unit shipments, HP maintained the number 1 position worldwide with 30.2% server shipment share, growing shipments 8.8% year over year. Dell maintained the number 2 spot in terms of worldwide server shipments with 23.3% share, up from 21.3%.

More:

x86 Industry Standard Server Market Dynamics.

Bladed Server Market Shows Strong Shipment and Revenue Growth Top 5 Corporate Family, worldwide Server Systems Factory Revenue, Full Year 2005 (Revenues are in Millions)

More: IDC worldwide Quarterly Server Tracker, February 2006 Publ 20060222

MP3 Players, LCD TVs, DVD Recorders Lead Consumer Product Growth

In-Stat: MP3 Players, LCD TVs, DVD Recorders. The top three fastest-growing consumer electronic devices from 2003-2009 are projected to be portable digital audio players at a 57.0% Combined Annual Growth Rate (CAGR), LCD televisions at 52.3%, and DVD recorders at 51.4%. Two notable devices are projected to decline over the same period, analog televisions that are being squeezed out by digital televisions (a –15.3% CAGR), and fax machines (a –13.9% CAGR) that find their functionality consumed by multi-function peripherals.

• The ever more versatile PC is expected to grow to a 282 million unit-market by 2009.

• worldwide semiconductor sales in the consumer electronics category will reach $45.6 billion in 2010.

• Original equipment manufacturers have strong opportunities in markets in the East and in the West, and in developed markets as well as emerging markets.

It's All in the Eye of the Consumer: 2005 Consumer Electronics Roll-up Publ 20060222