Thursday, June 29, 2006

Home Entertainment as the Beachhead for Home Automation

ABI: Of all the household products and systems that might benefit from automation and control, home entertainment will offer the path of least resistance for vendors, h. Home entertainment is the key application that will provide traction for the home automation market,. Home automation has been around in two forms for at least 30 years. Commercial systems offering control of lighting, climate, appliances, security, and more have long been available from companies such as AMX and Crestron. They are sophisticated and expensive. At the other end of the scale, X-10, an inexpensive powerline-based technology, has been embraced by hobbyists and tinkerers, but has proved too limited and complicated for mass adoption. The large market in the middle has remained untapped, but that may be about to change. With the relatively recent introduction of interoperable new technologies such as Z-Wave, ZigBee, and INSTEON, new vendors such as Intermatic, Monster Cable, and Universal Electronics have entered the market, targeting mainstream households. Home theater systems are increasingly making their way into middle-class homes, and consumers clearly want to integrate their multimedia into residential life. Although home automation can control heating, cooling and ventilation, safety, security and access systems, pools and spas, appliances, and irrigation, vendors will find automation systems supporting home entertainment (control of lighting and curtains, for example) gaining the earliest mass market acceptance. Most people in the mainstream market just don't know about home automation technology, what it can do for them, or how it's implemented. Customer education is a key challenge for vendors. For that reason, high-touch retail will be best model for informing customers and deploying automation systems in their homes. Certain subsystems may be amenable to off-the-shelf sales, but more complex systems require a consultative sales model, which can be provided by stores such as Magnolia and M-Design. Home Automation and Control Publ 20060629

European Mobile Market To Stay Stronger

rncos: With a favorable growth in the number of both mobile replacement as well as new subscription, the global production of mobile handsets topped around 750Mn during the year 2005.

Entry of new manufacturers in the handset market has resulted in continuous growth in the sales of mobile handsets in the emerging market. There has been a remarkable growth in the replacement market in Europe, which accounted for more than 70% of the total sales of new handsets in 2002. Also, a growth of 20% was observed in the European mobile market during the Q2 of 2005.

n spite of a slight seasonal decline, there was a growth of 28% in the worldwide shipments of cell phones during the Q1 of 2006 as compared to the same period in the previous year. The historical progress shown by the market in the Q1 of 2006 is a good indicator of where the market may be by the end of the year.

Annual increase in the demand for mobile handsets indicates an assured growth in the replacement handset market in the years to come. About 227Mn mobile handsets were shipped, with an increasing number of consumers going in for new handsets.

Europe Mobile Handset Market Analysis (2007) Publ 20060629

The Booming Russian Residential Broadband Market

RNCOS:

The broadband market in Russia is replete with rewarding opportunities for investors, with demand for broadband connections far exceeding the numbers achievable by the service providers. The fragmented market offers enormous opportunities for prospective players and investors to reap benefits from the burgeoning broadband market in Russia.

There exists a great potential for growth in the budding broadband market in Russia. Going by statistics, globally Russia ranks among the top twenty markets in terms of the number of broadband connections and among the top ten countries as per the number of Internet users. In 2005 alone, approximately 5.5 mn broadband connections, both residential and official.

The Russian broadband market is in an upbeat mood and the market size will expand, achieving the milestone of $360mn in the year 2006.

As per global broadband market figures for 2005, Russia features as an important emergent market accounting for 43% of new residential lines installed and a significant increase of 11%( from 23% to 34%) in the share of this region in the global subscriber base. Going by even the most conservative estimates, by the end of 2006, the number of residential broadband lines in Russia will leapfrog to a whopping 2.4mn, an increase of more than 80%.

Residential broadband access has generated significant interest as a prospective revenue-driving segment for the sector. In 2005, the total number of residential lines exceeded 1.1mn and the market has been expanding consistently since then.

Russian Broadband Market Forecast (2005-2012) Russian Broadband Market Forecast (2005-2012) Publ 20060629

Worldwide broadband subscriptions to double by 2010

RNCOS: By the end of 2005, Russia‘s Internet user base was one of the largest and about 6mn internet users took advantage of broadband access at home or work. At present, more than 52% of the total Russian Internet users employ broadband. In Russia, 207mn new broadband connections were availed in 2005 alone and by 2010, broadband subscriptions are likely to reach 415mn.

By the year 2010, globally, broadband revenue is likely to reach US$124bn, with 62 % of households using the internet for telephonic conversations. In the US alone, subscriber size will grow from 10.3mn in 2006 to 44mn by 2010.

A comprehensive analysis of the Russian broadband sector. From 2000 to 2005, worldwide, the number of broadband users grew at a CAGR of 21%. During the fourth quarter of 2005, the total of broadband lines stood at 211mn, an increase of 39% from the same period in 2004. In 2005, Middle East and Africa (MEA) and Eastern Europe emerged as the two fastest growing regions, contributing 97% and 93% respectively. Russian Broadband Market Forecast (2005-2012) Publ 20060629

Mobile Phone Payments Replacing Cash in Japan .Japan's experience informs US marketers

eMarketer: Japanese households, with the highest mobile phone penetration in the world, are also among the most prolific users of their cell phones to make purchases. Over 43% of Japanese Internet users employ (mobile- and card-based) e-money several times a month.

While Japan is ahead of the rest of the world by three or four years, and some aspects of the experience in Japan are unique to Japan, other aspects can be adapted to the US and give marketers a step up on the competition,.

One survey revealed the top 10 locations where Internet users said they would like to use electronic money.

Another survey showed that 74% of Japanese consumers would like to use a mobile credit card in convenience stores, and 52% would like to use the device in a supermarket.

Consumers are attracted to the convenience of mobile payments because it not only removes the hassle of having to get cash, but it saves time. Consumers initially concentrate on paying for services where there is a low cost for trying it (like signing up for a card to save on a train ticket), or a low cost of failure (like only losing out on the cost of a cup of coffee). Convenience is the initial value point that gets people to try e-money and become curious about experimenting more.

Almost every successful Japanese mobile data service has started out this way from ringtones to using a mobile device to operating a soda vending machine. As customers grow in confidence and usage patterns, more sophisticated services are introduced for more money.

Mobile Payments in Japan Publ 20060629

Wednesday, June 28, 2006

Many mobile TV broadcasting options will not be financially viable

: Analysys:
  • Consumers are unlikely to spend a substantial amount on mobile TV and radio services, severely limiting the options that are financially viable

  • For small operators sharing a DAB-IP or DVB-H broadcasting network with a number of other mobile operators will be essential in order to achieve adequate financial returns,

  • Large operators could have their own broadcasting networks, and TDtv could prove cheaper than DVB-H

  • Report models the financial return from mobile broadcasting deployment options for operators considering mobile TV and radio technologies such as DAB-IP, DVB-H, T-DMB and TDtv

Despite high expectations for mobile TV and radio services, only a small number of broadcasting technology options will be financially viable, .

As consumer demand for mobile TV and radio increases and broadcasting services begin to emerge during 2006, there will be strong competitive pressures on mobile operators to respond. However, There is a strong chance that mobile users will not spend a substantial amount on mobile TV and radio services, or video-on-demand and other mobile broadcasting services.

Mobile operators in Western Europe are already evaluating several broadcasting technologies, including DAB-IP (Digital Audio Broadcasting - Internet Protocol), T-DMB (Terrestrial Digital Multimedia Broadcasting), DVB-H (Digital Video Broadcasting - Handheld) and TDtv, alongside the option of relying on enhanced 3G networks. If they opt for a dedicated broadcasting technology, they must decide whether to build their own networks or to share the cost and risk with other operators and/or broadcasters.

Financial modelling presented in the report reveals that small operators will have a very limited choice of viable options. Sharing a broadcasting network with a number of other mobile operators will be essential. With a shared network, either DAB-IP or DVB-H could yield attractive returns. While DAB-IP is potentially the cheapest solution, it is only appropriate in those few markets where DAB has been deployed extensively. Furthermore, only a limited range of DAB handsets and broadcast channels may be available. DVB-H is currently attracting the most interest from mobile operators in Western Europe and is the most likely to achieve significant economies of scale on both infrastructure and handsets.

Mobile operators with a large customer base have more options than smaller operators. While a shared DAB-IP or DVB-H network could provide a strong financial return for a large operator, some may want their own broadcasting networks, to differentiate themselves from competitors.

Mobile operators wanting to own broadcasting networks have two viable options: building DVB-H networks or upgrading their 3G networks to TDtv. TDtv would allow mobile operators to reuse existing cellular base stations and operate in already-licensed TDD (Time Division Duplex) spectrum, making it considerably cheaper. While DVB-H is also viable, operators must try to avoid high spectrum costs and the use of the more expensive L-band spectrum, which would require significantly higher take-up and revenue per service user to achieve a good return.

Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe Publ 20060628

Booming Trailer Tracking Market Growth to Continue

ABI: Markets for electronic trailer tracking hardware and services are booming. worldwide subscriber numbers will see a strong, prolonged growth well through the end of the decade, and in North America, the percentage of trailers tracked will more than triple. Growth is already very strong: worldwide subscriber numbers have almost doubled since the previous year. Several factors have converged to produce this strong growth: Trailer tracking hardware costs have fallen significantly, while products and services have become more sophisticated. Customers are more aware of the technologies, and many see electronic tracking as an efficient solution to maximize productivity of trailers and resources. This rapid expansion is seeing many new vendors enter the market, and some players chalking up big wins. A good example is GE, which recently acquired Wal-Mart as a trailer tracking customer. The retailer placed an order for 46,000 units. When the fit-out is complete by the end of this year, GE will have more than doubled its market share, putting it on a nearly equal footing with other leading vendors such as Qualcomm, SkyBitz, and Terion. As in any fast-growing market with new vendors, consolidation can be expected, and not all will survive. There are two parts to the trailer tracking equation: hardware and services. Most of the market value is in the ongoing provision of services, and these can range from basic tracking of a trailer's location and status, to multiple sensor connections, integration, and monitoring of parameters such as the temperature of refrigerated trailers. By the end of this decade trailer tracking stands to be integrated with other commercial telematics solutions. Trailer Tracking Markets Publ 20060628

1394 Slowing in PC Market, But Consumer Electronics Shows Promise

In-Stat: 1394 is being strongly challenged by USB in PC and peripherals markets, but there are signs of life in consumer electronics (CE). Digital televisions, cable set top boxes, and DVD recorders are all driving 1394a growth in the CE segment . In addition, the High-Definition Audio Video Networking Alliance (HANA) has endorsed 1394 as a transmission medium for high-definition content, a development that may spur adoption of 1394 in home video networks. In the PC world, 1394 has had success in notebook PCs, but has struggled in corporate desktops, which account for a significant share of PCs sold annually. However, Microsoft has announced that it will support 1394b in its next-generation Vista operating system, which may breathe additional life into 1394 in this segment. The CE segment is expected to surpass the combination of the PC and PC peripheral segments in 1394 devices by 2007.

  • The overall worldwide market for 1394-enabled devices will grow from 115.8 million units in 2005 to 219.9 million in 2010.

  • If HANA is successful in driving 1394b as a home networking technology, In-Stat expects to see 1394b in wall plates or separate boxes, such as gateways, rather than in CE devices.

1394 2006: Will Vista and HANA Support Provide a Boost? Publ 20060628

Touch Screen Phones Ready for Take Off. Touch Screen Phones Could Reach 40 Percent of Handsets by 2012

Strategy Analytics: The touch screen user interface in mobile phones will start to see significant growth by the end of 2007, assuming that the right conditions are present. By 2012, 40 percent of all phones may incorporate touch screen technology.

The touch screen market in cellphones is nearly ready to take off, but before it can do so certain conditions must be met. First, the cost of touch screen technology must shrink from $5-10 dollars to under $3. Second, revenue-generating applications must be developed to differentiate touch screen devices from menu or icon driven phones. Finally the market requires a catalyst, such as the presence of an iconic touch screen phone in a Hollywood blockbuster, to generate demand.

Touch screen interfaces for mobile phones will remain at under 2 percent of total devices until such a catalytic event occurs, predicted to be at the end of 2007, at which point rapid growth will ignite interest in touch screen phones, growing the market to around 40 percent by 2012.

Most demand to come from finger-sensitive technology built into high-end feature phones. This will be a significant shift from today's wireless PDA segment, where most stylus-driven touch screen devices can be found.

Undisplayed Graphic

Touch Screen Technology in Mobile Phones: Ready and Waiting for a Blockbuster Publ 20060628

Tuesday, June 27, 2006

Premium Content and Connected Devices Creating a Broadband Video 'Perfect Storm

ABI: Several converging trends are turbocharging the growth of broadband video and distributed entertainment in the home. The explosion of long tail content and the willingness of large content owners to distribute their premium catalog over IP networks, together with the ability of mobile, PC, CE, and set-top devices to act as networked media playback devices, are generating a broadband video perfect storm that will gather strength over the next three years. A number of factors have come together in 2006 to begin the widespread adoption of video over broadband connections into and around the home. As content providers and their distribution partners develop business models for network-based content delivery, the ecosystem for distributing entertainment throughout the home is coming of age. In just a couple of years, the device market has moved from a strict focus on physical layer technologies to enabling inter-device connections at the software and service layers through initiatives such as DLNA and Viiv. The emergence of long tail video portals such as YouTube has begun to create demand for Internet-delivered content among younger consumers. This, along with moves by large content owners to put their premium shows online, has filled what was once a gaping hole in the structure of the connected home. The scarcity of content available for distribution in the connected home is rapidly being corrected. This, combined with new platforms such as TiVo’s TiVoCast, and Microsoft’s revamped Online Spotlight in Windows Vista, will begin to shape a new market where content owners and consumers have their choice of providers on a multitude of platforms. While the future is bright as conditions for broadband video delivery to and around the home coalesce, there are still many hurdles. Proprietary approaches by technology vendors, and the persistent difficulty of home network setup will continue, creating challenges to networked-based content delivery even as the market for such content grows. Broadband Video and Internet TV Publ 20060627

Advances in Broadband Networks will Cause Carriers to Shift Focus from Voice to Data Revenues

Frost: In 2005, the four main wireless carriers in the U.S.: Cingular, Verizon Wireless, Sprint Nextel, and T-Mobile shifted their focus toward massive data network usage. As recently as the third quarter of 2004, there were six major U.S. wireless carriers, however, Cingular acquired AT&T Wireless and Sprint acquired Nextel, and both Cingular and Sprint are consolidating their networks, resources, and systems to reduce their operational expenditure (OPEX).

The voice average revenue per user (ARPU) will continue to decrease while data ARPU will grow substantially G Kibel. In the future, high speed wireless networks will be faster than ever, providing an opportunity for carriers to offer new services.

Advancements in network technologies and platforms as well as the associated development of sophisticated applications expect to stimulate demand for premium content and services. With a wide variety of new applications set to leverage improving technologies, the essential ingredients for compelling premium services are in place. Currently, the industry leaders are building strong customer bases to support well-conceived platforms for more sophisticated service concepts, including polyphonic ringtones, mobile music, games, graphics and information services.

However, the price per kilobit is still high for the average customers and handsets need to undergo further development. Once handsets integrate additional functionalities at reasonable prices, mobile data services will attract customers’ attention. Also, timing is critical, as the users' first impression of services will have lasting effects.

An application that is released too soon or before the technology can adequately support it may never be able to recover from an initial negative experience from customers, explains Kibel. On the other hand, a company that releases an application too late is likely to miss first-mover advantages and lose out on valuable market share.

Although data ARPU is rising, it is still voice ARPU that constitutes more than 90 percent of the revenues for the U.S. wireless carriers. In order to capture the attention of the users and attract them to generate more revenues in data ARPU, mobile handsets need to advance further. New handsets with better and enhanced displays will provide the best digital experience to customers. This in turn is likely to increase revenues drastically

A Competitive Analysis of Tier 1 US Wireless Carriers Publ 20060627

Local online advertising not living up to hype.l growing,

eMarketer: Local online advertising, once hyped as an indispensable resource for Internet shoppers, has yet to deliver on that promise. Online local ad spending growth is huge—but the growth emerges from such a small base that local makes up only 8% of online spend this year. Even when local online ad spending jumps by nearly 51% next year to $2 billion, it still will not quite be 10% of the 2007 ad spend estimate of $20.3 billion, while eMarketer predicts local at not quite 12% of Internet ad spending.

What is holding online local back?

One should never underestimate inertia and tradition when trying to gauge future paths for the local online ad market . That yellow pages and some newspapers bundle Internet and print sales, which not only increases the total price, but also undercuts the strategic importance of the Internet to local marketers. Too many merchants are set in their brick-and-mortar ways—lacking the ad budgets and ease with the Internet that would make advertising online more palatable.

But, the consumers are not there yet, either. Although broadband usage has hit critical mass, with 63% of the total US population now going online, a study of visits to Google domains during one representative week in May showed that of all visits to Google only 0.05% of those visits were to Google Local.

Where there is local online ad growth, paid search is the prime force supporting it, providing over 55% of the local total.

Local Online Advertising: Measuring the Potential Publ 20060627

Monday, June 26, 2006

New Converged Wi-Fi/Cellular Handsets to Take Market by Storm

In-Stat: Converged Wi-Fi/Cellular handsets are expected to make a big splash. By 2010, shipments of cellular handsets containing Wi-Fi will exceed 132 million devices, . Carriers have been reluctant to offer Wi-Fi-capable handsets for several reasons, but Wi-Fi has spread so fast that carriers will not be able to resist much longer. In the end, most US cellular carriers will embrace Wi-Fi in their handsets, as carriers know that if they don’t, other carriers will, and these carriers will likely steal away some of their customers. Combo handsets also offer carriers opportunities to provide services such as VoIP over Wi-Fi, lessening impact on their cellular data system.

  • More than 20 cellular handset models now have, or will soon be, released with embedded Wi-Fi access.

  • A few cellular carriers are planning to offer services that support voice calls over both cellular and Wi-Fi, and some Wi-Fi/Cellular handsets are incorporating VoIP clients for services like Skype.

  • It had been assumed that business customers would be first to adopt Wi-Fi/Cellular handsets, but in fact consumers are likely to be more receptive to early adoption of the technology.

The Road to Convergence: Wi-Fi/Cellular Handsets Get a Voice Publ 20060626

Mobility Is on the Rise with European Businesses. Survey Finds High Demand for Mobility Drives Increased Mobile Service Spending

Yankee: Results of its of European large enterprises and small and medium businesses, which provides insight into wireless/mobile technology adoption drivers as well as current and planned spending on wireless/mobile products and services. Some of the major highlights include:

• In 2006, large enterprises plan to spend the most on mobile data services including e-mail, remote access/mobile VPN solutions and salesforce automation applications. In contrast, small businesses are investing most in mobile voice services. These investments in voice are expected to grow substantially from 2005. Small business investments in mobile data are also expected to rise heavily from 2005, which is attributed to workers relying more on mobile e-mail.

• The percentage of mobile workers in European small businesses continues to rise as mobile investments become a business priority. More than 50% of small business employees are classified as mobile workers, spending more than 20% of their time away from their primary workspace. This figure grew from 48% in 2005.

European large businesses are increasingly interested in fixed-mobile integration as a means to control voice costs and consolidate fixed and mobile infrastructure into one managed solution. About 41% of respondents listed this capability as very important in terms of managing their organizational mobile voice programs.

• Large enterprises as well as small and medium businesses in Europe rarely work with just one mobile operator to deliver mobility solutions. More than 45% of large enterprises and 40% of small and medium businesses have relationships with more than one operator.

The growing appetite for mobile voice and data and services among European businesses presents European mobile operators with excellent market opportunities, . Their ability to offer customized, higher value services for mobile data and voice, and to become trusted IT advisors on business mobility, will be crucial for success in this segmented market. 2006 Transatlantic Wireless Business Survey Publ 20060626

Mobility Is on the Rise with European Businesses.

Survey Finds High Demand for Mobility Drives Increased Mobile Service Spending Yankee: Results of its of European large enterprises and small and medium businesses, which provides insight into wireless/mobile technology adoption drivers as well as current and planned spending on wireless/mobile products and services. Some of the major highlights include:

• In 2006, large enterprises plan to spend the most on mobile data services including e-mail, remote access/mobile VPN solutions and salesforce automation applications. In contrast, small businesses are investing most in mobile voice services. These investments in voice are expected to grow substantially from 2005. Small business investments in mobile data are also expected to rise heavily from 2005, which is attributed to workers relying more on mobile e-mail.

• The percentage of mobile workers in European small businesses continues to rise as mobile investments become a business priority. More than 50% of small business employees are classified as mobile workers, spending more than 20% of their time away from their primary workspace. This figure grew from 48% in 2005.

European large businesses are increasingly interested in fixed-mobile integration as a means to control voice costs and consolidate fixed and mobile infrastructure into one managed solution. About 41% of respondents listed this capability as very important in terms of managing their organizational mobile voice programs.

• Large enterprises as well as small and medium businesses in Europe rarely work with just one mobile operator to deliver mobility solutions. More than 45% of large enterprises and 40% of small and medium businesses have relationships with more than one operator.

The growing appetite for mobile voice and data and services among European businesses presents European mobile operators with excellent market opportunities, . Their ability to offer customized, higher value services for mobile data and voice, and to become trusted IT advisors on business mobility, will be crucial for success in this segmented market. 2006 Transatlantic Wireless Business Survey Publ 20060626

VoIP service revenue doubles in North America, Europe, Asia Pacific in 2005

Infonetics:, VoIP service revenue roughly doubled in North America, Europe, and Asia Pacific from 2004 to 2005, and is expected to continue booming at least over the next 5 years.

A combined $120 billion will be spent on VoIP services between 2005 and 2009 in the 3 regions.

Businesses around the world are migrating to IP for increased functionality, greater flexibility, improved productivity, and the potential of growing revenue through better customer service.

VoIP services continue to pick up fast in North America and in many parts of Europe, particularly in central and Eastern Europe, where small businesses have a strong appetite for business trunking, IP Centrex, and VoIP VPN services, Téral continued. In Asia Pacific, VoIP service revenue about doubled that of North America and Europe in 2004, and continues at a blazing pace. China will likely emerge as a major VoIP business market in the coming years because the Chinese government is encouraging carriers to accelerate the migration to IP Centrex and IP PBX from their existing TDM Centrex.

  • Between 2005 and 2009, VoIP service revenue will grow from:

    • $2.6 billion to $13.3 billion in North America

    • $2.3 billion to $12.7 billion in Europe

    • $4.2 billion to $12.9 billion in Asia Pacific

  • Percent of VoIP service revenue coming from residential vs. business customers:

    • 51% in North America

    • 72% in Europe

    • 83% in Asia Pacific

  • The number of worldwide VoIP subscribers is expected to almost double 2005 to 2006, when it will top 47 million

  • Vonage leads in North American residential/SOHO VoIP subscriber market share, but is down from 34% in 2004 to 27% in 2005, resulting from fierce competition from cable MSOs, traditional telcos, and low-cost new entrants

  • Cable companies continue pushing to increase VoIP subscriber share: Cablevision and Time Warner Cable each have double-digit share and combined have 39% of all North American residential VoIP subscribers

  • AT&T, Comcast, and Cox are the only other providers with North American VoIP subscriber share greater than 3%

VoIP Services Publ 20060626

Saturday, June 24, 2006

Europe Broadband Market Splits Between Leaders and Laggards. Nordics and Netherlands Lead, While Germany and Italy Lag

Strategy Analytics: Broadband Internet access is quickly becoming a mainstream consumer service in Western Europe, but conditions for growth vary widely, with some of the continent's largest countries still trailing on broadband availability and adoption. That is the conclusion of a new report which finds that Nordic countries such as Finland, Sweden and Norway lead the region in broadband adoption, thanks to their strong competitive environments. In contrast, broadband penetration remains lower than average in Germany and Italy, where incumbent telecom operators dominate the market. A summary of 2005 broadband penetration rates by country is shown below.

Undisplayed Graphic

Countries with higher broadband penetration usually have significant facilities-based competition between telecom companies offering DSL and other providers, such as cable TV operators. Local Loop Unbundling regulations have encouraged competition between incumbents and independent DSL providers, prompting both to offer faster broadband speeds and enabling new services such as Voice-Over-IP (VOIP) telephony and IP-based TV.

The report, which includes five-year forecasts for adoption of DSL, cable modem and other broadband technologies in 16 European countries, predicts that another 16 million households will adopt broadband this year, bringing the total base of subscribers in the region to 73.2 million. By 2010, Strategy Analytics forecasts that the number of broadband c ustomers i Western Europe will reach 108 million, or 63 percent of all households.

Ultimately we expect that the Internet and broadband services will be integrated into nearly all aspects of home life and social activity.

Broadband in Western Europe: Competition and Convergence Drive the Next Wave of Subscriber Growth Publ 20060624

Thursday, June 22, 2006

Mobile market to reach EUR198bn by 2011,

Analysys: The Western European mobile market is forecast to grow by more than 6% per year to reach EUR198.4 billion in 2011. With mobile penetration close to saturation, growth will primarily be driven by rich-media services including music and television.

We are now seeing a rapid acceleration in the number of full-track downloads and in streamed TV usage. Subscribers are becoming more familiar and comfortable accessing both on and off-portal content; as mobile broadband becomes more prevalent this growth is likely to continue. Holden adds that that the longer term prospects for voice revenues are also encouraging.

Although voice ARPU has been adversely affected by falling termination rates and aggressive pricing strategies, this trend is forecast to reverse from 2007 as 3G adoption increases, adds Holden. Operators are beginning to take advantage of 3G’s greater capacity to offer lower-cost bundles, thereby accelerating fixed–mobile substitution.

Fxed–mobile convergence has emerged as a key strategic challenge for mobile operators. While it is likely to further encourage fixed–mobile substitution, fixed operators’ moves towards converged technologies will also result in greater competition within the mobile market.

  • total mobile services revenue is forecast to grow at a compound average growth rate of 6.2% from EUR138.4 billion in 2005 to EUR198.4 billion in 2011
  • active mobile penetration in Western Europe was 96.2% at the end of 2005 and is forecast to grow to 108.8% by 2011, driven by operators’ efforts to penetrate under-served customer segments (such as older demographics), as well as by increased ownership of multiple SIM cards and more machine-to-machine communication
  • ARPU levels have now bottomed out and will continue to recover, rising by 20% from EUR31.3 in 2005 to EUR37.5 in 2011.

The Western European Mobile Market: trends and forecasts 20062011 Publ 20060622

Cargo Container Security: Someone Must Take the Bull by the Horns

ABI: Governments and port authorities acknowledge that the 17 million cargo containers in use around the world are a weak link in national security arrangements. Import/exporters and manufacturers understand that poor container security poses a risk to the goods they contain. Yet because there are so many players in the global freight ecosystem, and the problem is distributed in thousands of ports and transport hubs around the world, attempts to improve it have been inadequate. Efforts underway in the ISO to create a uniform standard for electronic container security should bear fruit within the next 12 months. But getting shippers and port operators to comply and to invest in costly systems that provide little or no ROI is another matter. Everyone wants to improve security, but all the maritime industry players are looking to each other to be the first to invest. An organization such as the world Customs Organization needs to mandate electronic seal standards. Until some of these stakeholders make hard decisions, the situation will remain unsatisfactory. Several manufacturers—General Electric, Savi Technology and IBM—are designing electronic container security systems. GE's is called CommerceGuard. ABI Research has examined its key elements and found shortcomings that highlight some of the critical issues facing any attempt to secure containers. CommerceGuard is a proprietary system. That seems a major drawback for a system which, to be effective, must work identically in thousands of facilities worldwide. In addition, unlike other systems that use disposable tags, CommerceGuard's are reusable, implying a massive recycling operation to move used tags to their next point of use. Shippers are unlikely to accept any such solution. Because the container electronic security market is still quite immature, it is difficult for government to specify a single technology as a cure-all solution. But until something is done, security will continue to suffer. Cargo Container Security Tracking Publ 20060622

IDC: Companies will significantly increase investments in service oriented architecture (SOA)-based services throughout the rest of 2006. The study, which analyzes the results of an IDC end-user survey of U.S.-based companies, reveals that the majority of respondents rated SOA as important to their overall IT and business strategy, and further indicated that they are planning to purchase SOA-related services by the end of 2006. IDC cites a significant opportunity for service vendors to assist companies in implementing SOA, and believes vendors must continue their education efforts, provide guidelines, and demonstrate business benefits to reach the majority of potential SOA users.

Companies which will try to implement SOA on their own without any outside help from a services vendor will soon discover that it is very difficult, if not impossible, to successfully roll out a large or corporate-wide SOA initiative without considering the impact on the organization and its employees: The Services Opportunity programs. To help them tackle the various issues involving organizational change they will need a service vendor.

When considering assistance from an external service provider, the survey finds that the companies planning to adopt SOA are most likely to turn to a large technology vendor, consulting firm, or systems integrator, and to some extent a traditional outsourcer.End users are more likely to turn to these large and established service vendors as they are unwilling to take a risk with a less-known services player when embarking on a new technology venture.

In terms of the types of services that both current and future SOA adopters are planning to acquire, the respondents claimed that their companies will procure a wide range of services including consulting, implementation, training/education, application development, application management/outsourcing, and support services. Although consulting services continued to be on top of the list, additional types of services are also expected to be in strong demand by SOA adopters. In addition, the study reveals that the IT department is the primary decision maker for purchasing SOA-related services.

SOA-Based Services Buying Trends: A 2006 Survey of U.S. Companies Publ 20060622

China's Booming Mobile Market to Total 500 Million People. 25% of subscribers are young adults

eMarketer: China will have more than 500 million mobile phone subscribers by next year—37% of the population. The country's dense urban markets are already saturated with mobile phones, and by 2010, almost half of China's 1.3 billion people will be using mobile phones.

To demonstrate the ubiquity of mobile phone usage in China, when soccer fans in select countries in Asia were polled, almost a third of those in China said they planned to follow the world Cup on their phones. That's more than twice as many as fans in any other country polled.

In addition to the mammoth overall opportunity, marketers should note that 25% of mobile phone subscribers in China are between 20 and 24 years old. For marketers who want to reach these young adults, SMS is a good bet since 99% of respondents in a recent survey said handsets feature text messaging. But only 21% could play music on their phones. Ringback tones are a growth business, though. One mobile provider, China Mobile, hit $427 million for its ringback service by the second year of operation.

Chinese notions of what constitutes cool differs considerably from the West, and not just in musical styles. He points to research that shows that music does not define cool as much as do clothing and overall culture.

In whichever manner mobile ad campaigns are executed, they should only be launched with a strong word-of-mouth campaign. Word-of-mouth trumps even budget in terms of influencing purchase decisions.

China Mobile Publ 20060622

Wednesday, June 21, 2006

More Than Half a Billion Mobile TV Subscribers by 2011

ABI: In 2011, mobile TV services will have some 514 million subscribers worldwide, up from only 6.4 million at the end of 2005. The fledgling market for mobile television is beginning to build significant momentum and advertising-supported broadcast services are expected to propel additional growth over the next few years. Broadcast will be the preferred method of access to mobile video for most people. Unicast will remain part of the mix, for customers who want to access video-on-demand, the majority of subscription services will be for broadcast content, and that unicast-only subscriptions will not be a significant part of the market. South Korea and Japan are the early adopters, but European and North American markets are not far behind, with three contenders planning to introduce mobile video broadcast services in the United States over the next 12 to 18 months. MediaFLO (Qualcomm) plans to be first off the mark, having announced its intention to launch services in the fourth quarter of 2006; Hiwire (Aloha Partners) and Modeo (Crown Castle) will follow suit in 2007. Most markets will not be able to support more than two broadcast networks due to the high cost of building them, and the fact that most markets only have three or four major mobile operators selling wireless services to subscribers. What will determine which broadcasters survive in any given market? The most critical factor will be commitment from mobile operators. MediaFLO has been built for this purpose from the ground up, and will almost certainly be among the winners in the US,. Verizon Wireless has already committed to it. Modeo and Hiwire are competing for the business of just three major operators, and one of them will fail. Each has strengths and weaknesses. Modeo plans to be faster to market, and if it signs a major operator quickly, its battle is half won. On the other hand, in Hiwire's favor is its large (12 MHz) and valuable swath of spectrum with more favorable characteristics than Modeo's. Broadcast and Unicast Mobile TV Services Publ 20060621

Reports on Growing Use of Biometrics in Asian Banks.Lack of Standardization May Prevent Large-Scale Customer Deployment

IDC: Examining the growing use and effectiveness of automated biometric authentication devices by banks in Asia.

Generally viewed as an expensive, high-level security application, biometrics has become more accessible for commercial purposes through technological advances. Estimates by the International Biometric Group see biometric usage growing significantly over the coming years. However, despite increasing usage by Asian banks for internal security, It will still be several years before automated biometric authentication devices can be effectively deployed on a customer level.

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A It is not really an issue of whether banks are ready for biometrics but an issue of whether biometrics is ready for banks. Numerous banks in Asia have already implemented biometrics for internal security purposes, but problems arises when they try and implement customer-level biometric authentication.

Despite being touted as the highest level of security, biometric devices are too diverse with a variety of proprietary elements that make it difficult for them to be interoperable and customer-friendly in the modern banking environment. The lack of standardization between devices, little regulatory guidance, and cost concerns show that the practical implementation of biometric authentication on a customer level is still several years away.

Biometrics: Ready for Asia's Banks? Publ 20060621

Western European Machine-to-Machine Communications Market Ready to Take Off

IDC: Machine-to-machine communications have long been expected to revolutionize the wireless industry, but market uptake has been hampered by lack of vendor push, poor solution implementations, and technical difficulties. Strong demand from the enterprise segment, however, is set to drive the Western European machine-to-machine communications market, which is expected to grow from $3 billion in 2005 to $19.8 billion in 2010.

The Western European machine-to-machine market holds huge potential. Most of the market infancy problems are being properly addressed and vendors are starting to see the first signs of the promised market potential being fulfilled. The prime growth drivers are regulation on automatic metering and declining prices on data transfers and RFID tags.

Machine-to-machine communications take many forms, with the most widespread solutions in automatic meter reading, RFID solutions, and fleet control systems. In principle, however, the only limit on deployment is the imagination.

To take advantage of market opportunities, vendors should introduce an integrated machine-to-machine solution, as customers, particularly in the larger and more complex deals, are looking for end-to-end providers that can handle integration of data flow to back-end systems and design internal processes around the machine-to-machine solution. Due to the nature of machine-to-machine solutions — comprising software, hardware, and communications — systems integrators, hardware vendors, and communications providers all have a part to play in delivering the solution.

The fight for this market is a battle between vendor types, namely hardware vendors, software vendors, systems integrators, and telcos. These players are fighting fiercely for market dominance with their respective competitive advantages. Until now the systems providers have had a head start due to strong competencies in business process understanding, which is a key element in most machine-to-machine implementations. However, hardware vendors and telcos are starting to look at how to gain similar competencies on their own.

Machine-to-Machine Communications in Western Europe, 2005–2010: Crossing the Chasm to Success, but Who Takes the Pot? Publ 20060621

Wireless Spending Remains Robust as Consumers and Enterprises Continue to Drive Demand

IDC: Enterprise demand for wireless infrastructure and applications services continues to grow as corporate IT managers seek a secure means of supporting remote workers, as well as in-building/campus wireless LAN deployments. IDC anticipates spending to grow at a compound annual growth rate (CAGR) of 12.4% from 2005 to 2010 and reach $56.7 billion by the end of the forecast period.

As wireless becomes a integral part of the overall enterprise IT strategy, there will be an increased demand for upfront wireless assessment services that will help companies develop an overarching enterprise-wide wireless strategy.

IDC expects an increase in managed services in both the enterprise and service provider markets. In the enterprise market, the demand for managed services will be driven by IT managers seeking a more cost effective means of managing and supporting their wireless users. In the service provider market, managed services will be viewed as a way to lower operating costs by outsourcing certain operational tasks. In addition, as new services get deployed on wireless networks, there will be increased emphasis on maintaining efficient network capacity utilization, which will drive demand for network optimization services.

Spending is expected to remain robust as network-level transformation initiatives remain strategically important to service providers and enterprise customers. The proliferation of devices requesting access to corporate resources and the integration of applications and content on wireless operator networks will be significant drivers of wireless infrastructure and application services during the forecast period.

U.S. and worldwide Wireless Infrastructure and Application Services 2006-2010 Forecast Publ 20060621

Mobile TV Broadcast Subscribers to Leap to 100 Million by 2010

In-Stat: By the end of 2010, mobile TV broadcast subscribers worldwide will reach 102 million, a giant leap from 3.4 million in 2006. Recognizing that using cellular networks to deliver content that millions want to watch simultaneously requires much greater bandwidth than is currently available, carriers are turning to mobile TV broadcast networks, which have a much lower cost per bit for video delivery. The greatest challenge for mobile TV broadcast operators is to acquire the spectrum necessary to offer services. Spectrum availability may determine which of four standards is chosen, and also impacts the business case for the deployment of a network.

  • There are positives and negatives to each standard, but each has a vendor eco-system behind it to enable deployment today. 2005 was the year of the first deployments, with ongoing trials in many parts of the world.

  • Mobile carriers, mobile TV network operators, and content providers will soon be testing business models to determine what mobile phone subscribers are willing to pay to watch and what advertisers are willing to pay to reach them.

Mobile TV Broadcasting Now Out of the GatePubl 20060621

Mobile penetration amongst Russian young reaches 100%

RNCOS: With more than 120 million subscribers in 2005, of which most are young adults aged between 16 and 30, the mobile market in Russia offers great potential for the further growth of the industry. Russia has today attained the number four position in the world mobile market.

Premium content, such as music and games, are the main stimulators behind the increasing demand of mobile phones in the Russian market. Summing up to $200 million within the first three quarters of 2005, the mobile content market in Russia showed rapid growth in the year 2005. The current situation of the Russian mobile market guarantees that the trend will continue in the years to come.

About each and every aspect of the mobile market in Russia.

The Russian mobile industry is expected to exceed 65mn mobile subscribers by the end of the year 2007. The mobile services revenues will reach $10bn from that of about $3.4bn in late 2002.

Russian Mobile Market - An Industry Insight (2006) Publ 20060621

Russian Broadband Market: Budding Industry

rncos: Russia is one of the recent entrants in the broadband markets and offers huge set of opportunities for vendors & operators. Obtaining revenue of around 1Bn in 2005, with 6Mn users, Russian broadband industry is all set to capitalize on recent developments in broadband & wireless communications.

Considering the current trends, it’s anticipated that the broadband market in Russia will touch the milestone of $362Mn by the end of 2006. Today, around 23% of the Russian population is using Internet while it’s expected to cross 42% by 2008. During the year 2005, Internet Access Services were accountable for 11% of broadband revenue and it’s anticipated that this percentage will increase to 35% towards the year 2008.

RNCOS has included an exclusive discussion of all aspects of the broadband industry in Russia. As per the report, The biggest chunk of broadband market in Russia is concentrated in Moscow, where the number of total broadband connections exceeds 56% of the total connections in the country.

The number of broadband connections in Russia shall cross 2.5Mn lines by the end of 2006. Also, the number of broadband subscribers shall rise above 59Mn by 2015, .

Russian Broadband Market Forecast (2005-2012)

Publ 20060621

Worldwide Antivirus Software Market Increased 13.6 Percent in 2005

Gartner: Worldwide antivirus total software revenue totaled $4 billion in 2005, a 13.6 percent increase from 2004 revenue. The market was relatively evenly split between the enterprise and consumer segments, with the enterprise segment at a 51.5 percent market share and the consumer segment with 48.5 percent of the market in 2005. There are clear indications that the consumer segment has begun to commoditize, and we expect to see a major change in product offerings and functionality that will affect this market as well as the enterprise segment. Beyond antivirus, users also require anti-spyware capabilities and certain behavior-blocking and firewall-type functionality for their desktops. Currently, it is necessary to buy four or more separate products. However, the market for individual desktop security products is beginning to converge, and existing vendors will move in the general direction of end-point security suites. The antivirus software market is a mature market with the top three vendors accounting for 86 percent of the market in 2005 (see Table 1). Symantec continued to dominate the market with a 53.6 percent market share. McAfee and Trend Micro followed with 18.8 percent and 13.8 percent market share, respectively. Although Panda Software only garnered 3.2 percent of the market in 2005, its strong presence in the European small and midsize business (SMB) market helped push it to 23.9 percent growth. Table 1 Worldwide 2005 Total Antivirus Software Revenue for All Software Segment Types (Millions of Dollars)

Company

2005

2005 Market Share (%)

2004

2004 Market Share (%)

2004-2005 Growth (%)

Symantec

2,150.4

53.6

1,915.3

54.2

12.3

McAfee

753.9

18.8

666.5

18.9

13.1

Trend Micro

555.7

13.8

509.3

14.4

9.1

Panda Software

128.6

3.2

103.9

2.9

23.8

CA

86.5

2.2

75.3

2.1

14.9

Other Vendors

340.2

8.5

263.0

7.5

29.4

Total

4,015.4

100.0

3,533.2

100.0

13.6

Source: Gartner Dataquest (June 2006) The worldwide antivirus software market is expected to continue its double-digit growth for the short term. However, the market for stand-alone antivirus and anti-spyware products for businesses and consumers will eventually start to decline as interest for end-point security product suites continues to grow. In addition, Microsoft's entry into the consumer antivirus market is expected to unleash stronger price competition, which will likely lower the overall market revenue opportunity.

Worldwide Antivirus Software Market Publ 20060621