Digital Lifescapes

How Online Privacy Policy will Impact All Marketers

2012-01-28T10:51:00.000-06:00

According to the latest market assessment by eMarketer, growing online privacy concerns involve three primary stakeholder groups -- consumers, government and the collective advertising industry. Those concerns have been heightened by recent examples of disclosure failures and the apparent lack of consumer trust in many of the recognized industry players.

People are becoming increasingly concerned about their online privacy. Government entities in the U.S. market and elsewhere are looking to address that anxiety through laws, regulations and new policy pressure on the digital advertising ecosystem.

That last category -- which includes advertisers, ad agencies, media companies, websites, retailers, search engines and related vendors -- is looking to satisfy both government and consumer demands through self-regulation, and tools like Do Not Track (DNT) headers.

"There are many key factors in the privacy debate, including control, transparency and value, along with the concept of privacy itself," said David Hallerman, principal analyst at eMarketer.

Attempts to overhaul online privacy standards and related data issues is believed to be complicated by raised expectations. According to a November 2011 study from the American Consumer Institute, nearly two-thirds of consumers don't trust some companies -- i.e. Facebook -- with their personal information.

But there are obvious ways to alleviate privacy concerns. The public clearly values transparency about exactly what data companies collect and how they use it. They also expect control over their own data. Companies that mock these ideals merely fuel the growing distrust.

What internet users want, according to a survey from loyalty management company Aimia, include knowing what data is being collected, a means to opt in to location tracking (instead of the typical default, opt out) and the ability to set privacy preferences once and make them applicable across sites using a portable profile.

That being said, even though transparency helps to calm some privacy concerns, many online providers are not entirely transparent about their actions -- until they're outed by an informer. Also, user controls that are complicated to invoke will likely be viewed as a deceptive practice.

"The entire advertising ecosystem must continue to come up with more sophisticated methods of self-regulation, such as the DNT header, and to educate both the public and government about how data is used and its importance in the digital economy," said Hallerman.

"To both manage consumers’ privacy concerns and assuage government misgivings, the digital advertising ecosystem will have to realize that it shares -- rather than owns -- audience data."

How Wi-Fi Enables In-Home P2P Device Connectivity

2012-01-27T07:15:00.000-06:00

The adoption of over-the-top video services, such as Netflix and Hulu, has created a increasing demand for wireless connectivity that's built-in to the numerous related consumer electronics (CE) devices that are used within the home.

Increasingly, home video entertainment devices such as digital HDTVs, Blu-ray players, game consoles, and all versions of pay-TV set-top boxes (STBs) are coming to the market Wi-Fi-enabled -- so that devices can connect to the web and to each other.

According to the latest market study by NPD In-Stat, their research shows that the evolution of the home network will drive the number of in-home video WLAN-enabled video devices to approach 600 million in 2015.

"Wi-Fi has moved from a nice-to-have feature to a must-have feature as it provides the connectivity necessary to support IP-based video content." says Frank Dickson, Vice President of Research at NPD In-Stat.

It's important to note though that Wi-Fi is growing from being simply about getting content from a network to devices, to sharing content between devices -- as Wi-Fi evolves from being a network-centric connectivity standard to one that enables peer-to-peer (P2P) device connectivity.

New innovations such as Wi-Fi Display and Wi-Fi Direct will fundamentally change the way that digital media content is moved and shared in the home.

Some of the NPD In-Stat market study findings include:

Digital TVs will reach a 40 percent WLAN-attach rate by 2015.
In 2014, mobile hotspots will have an 802.11n attach rate of 98 percent.
Over 28 million WLAN-enabled Blu-ray players will ship in 2013.
The 802.11ac standard will achieve an attach rate in mini-notebooks of 23 percent in 2015.

Americans Viewed 7.1 Billion Video Ads in December

2012-01-26T07:18:00.003-06:00

Online video consumption reached record highs during 2011. The last month of the year also ended on a high note. comScore released data showing that 182 million U.S. Internet users watched online video content in December of 2011 for an average of 23.2 hours per viewer. That same U.S. Internet audience viewed a combined total of 43.5 billion videos.

Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in December with 157.2 million unique viewers, while VEVO ranked second with 53.7 million. Yahoo! Sites ranked third with 53.3 million viewers, followed by Viacom Digital with 45.8 million and Facebook.com with 42 million.

More than 43 billion videos views occurred during the month, with Google Sites generating the highest number at 21.9 billion. The average viewer watched 23.2 hours of online video content, with Google Sites (7.9 hours) and Hulu (3 hours) demonstrating the highest average engagement among the top ten properties.

Americans viewed 7.1 billion video ads in December, with Hulu generating the highest number of video ad impressions at nearly 1.5 billion, followed by Adap.tv in second with 1.1 billion. Tremor Video ranked third with 942 million, followed by BrightRoll Video Network with 872 million and Specific Media with 496 million.

Time spent watching video ads totaled more than 3 billion minutes during the month, with Adap.tv delivering the highest duration of video ads at 636 million minutes. Video ads reached 51 percent of the total U.S. population an average of 46 times during the month. Hulu delivered the highest frequency of video ads to its viewers with an average of 46.

The December 2011 YouTube partner data revealed that video music channels VEVO (53.5 million viewers) and Warner Music (31.7 million viewers) maintained the top two positions. Gaming channel Machinima ranked third with 22.7 million viewers, followed by Maker Studios with 10.4 million, FullScreen with 9.7 million and Big Frame with 8.3 million.

Among the top 10 YouTube partners, VEVO demonstrated the highest engagement (67 minutes per viewer) and highest number of videos viewed (782 million), while Machinima exhibited the second highest engagement (64 minutes per viewer) and number of videos viewed (340 million).

Other findings from the December 2011 study include:

85.3 percent of the U.S. Internet audience viewed online video.
The duration of the average online content video was 5.8 minutes, while the average online video ad was 0.4 minutes.
Video ads accounted for 14.1 percent of all videos viewed and 1.2 percent of all minutes spent viewing video online.

Upside Opportunity for M2M Reaches $35B by 2016

2012-01-25T07:14:00.000-06:00

The M2M market has become a fully mainstream segment of the mobile network service provider industry. By the end of 2011, most major mobile operators in North America, Europe, and the Asia-Pacific region had established M2M business units to focus their efforts in this fast growing market.

According to the latest market study by ABI Research, the market for cumulative cellular M2M connections will rise from about 110 million connections in 2011 to approximately 365 million connections by 2016.

This increase represents a compounded annual growth rate of about 27 percent by 2016 -- and translates to about $35 billion in connectivity services revenue.

The two largest cellular M2M market segments over the forecast period, by revenue, will be automotive telematics and smart energy.

Automotive telematics, including factory-installed systems such as GM’s OnStar service, aftermarket services such as usage-based insurance, and fleet management systems, will together represent more than $15.5 billion in 2016.

Meanwhile, smart energy, specifically cellular connectivity to smart meters and data concentrators, will represent more than $7.5 billion in 2016.

"As mobile operators further develop their M2M service offerings, software platforms and M2M application developer support will feature as increasingly larger components of the operators’ services," says Sam Lucero, practice director, M2M connectivity at ABI Research.

For example, AT&T announced on January 9, 2012 that it would be reselling Axeda’s M2M application platform in a U.S. carrier exclusive deal. This platform will enable AT&T customers to more easily develop and deploy complex M2M applications.

Why Solid State Storage Demand will Grow in 2012

2012-01-24T06:12:00.000-06:00

Flash memory technology advancements, changes in the expectations for new mobile PC capabilities, enterprise server and storage architectures, and hard disk drive (HDD) shortages are all impacting the worldwide solid state storage (SSD) market.

Chromebooks and media tablets are just one example of where the requirement for fast start-up and instant-resume access to the client device has raised the bar on design considerations. Informed people simply won't accept the legacy mobile PC constraints. The demand for superior SSD technology has risen as a result.

According to the latest market study by International Data Corporation (IDC), the worldwide solid state storage industry revenue reached $5 billion in 2011 -- that's a 105 percent increase from the $2.4 billion in 2010.

IDC expects the SSD market will expand further in 2012 and beyond.

"2011 was a record year for the worldwide SSD market, with revenue more than doubling year over year due to strong SSD shipment growth in the enterprise and client segments," said Jeff Janukowicz, research director, Solid State Storage and Hard Disk Drive Components at IDC.

The increasing use of flash memory in enterprise solutions, explosive growth of mobile client devices, and lower SSD pricing is creating a huge demand for increased SSD shipments and revenue over the forecast period.

Other findings from the IDC market study include:

IDC expects worldwide SSD shipments to increase at a compound annual growth rate (CAGR) of 51.5 percent from 2010 to 2015.
Pricing remains a key metric for SSD adoption in both the client and enterprise markets. IDC expects client SSD prices will fall below $1 per gigabyte in the second half of 2012, which will boost adoption in the PC market.
There are a number of dynamics influencing the PC market, from the growth in media tablets and ultrabooks to the upcoming introduction of Windows 8 and increased use of caching solutions such as dual drives (systems containing both an SSD and an HDD). IDC believes the net effect of these dynamics supports increased SSD shipments.
The flood in Thailand is disrupting the PC supply chain and the HDD industry's ability to supply the market near term. OEMs will certainly face unavoidable HDD shortages and higher HDD prices in 1H 2012. These shortages will present a significant short term opportunity for SSD vendors as OEM customers look to SSD vendors to fill HDD supply gaps.
The adoption of solid state storage as a complementary solution to HDD storage for enterprise applications is also driving SSD market growth.

Volatility in Overall PC Market Creates Uncertainty

2012-01-23T07:35:00.000-06:00

Personal Computer (PC) shipments totaled 92.7 million in the fourth quarter of 2011 (4Q11), down 0.2 percent compared to the same quarter in 2010, according to the International Data Corporation (IDC).

Shortages of hard disk drives (HDDs) added to challenges from slow economic conditions and competition from other consumer electronics -- including media tablets, eReaders and smartphones.

The 4Q11 results reflected a year-on-year decline of 0.2 percent for the quarter and growth of 1.6 percent for the full year. This was in-line with IDC projections of a 0.6 percent decline for the fourth quarter and 1.5 percent growth for all of 2011.

Despite the overall market volatility, most regions slightly exceeded forecast. Most Tier 1 PC vendors had access to sufficient HDD supply, though smaller PC vendors and retail channels experienced drive shortages.

"Europe and Asia-Pacfic came in a little stronger than expected, reflecting improvement in key markets and the strength of underlying demand in emerging regions," said Loren Loverde, vice president, Worldwide Consumer Device Trackers at IDC.

PC Market Outlook Contains Some Uncertainty

In the United States, market saturation and the economic environment continue to weigh considerably on consumer demand. However, the market is awaiting new products and technologies. That said, what happens if the promise of Ultrabook PCs doesn't materialize in significant new demand?

IDC expects the market to slow further in the first quarter of 2012 as the full impact of the HDD shortage is felt, and hopefully recover to greater than 15 percent growth in the fourth quarter.

Annual 2012 shipments are currently projected at 371 million, an increase of 5.4 percent, followed by growth in high teens during the first half of 2013 and annual growth over 11 percent.

Let's not forget, the U.S. market had its second worst year in history in 2011, dropping nearly 5 percent from 2010.

Although not as severe as the 11.7 percent contraction following the Y2K buildup and subsequent tech crisis of 2001, 2011 was particularly affected by HDD supply constraints, very weak demand, and a difficult competitive landscape. The fourth quarter's HDD supply shortage has had a notable effect on fourth quarter shipments. It's not clear what the ongoing impact may be for the PC market.

U.S. Online Ad Spending to Reach $62 billion by 2016

2012-01-21T08:13:00.001-06:00

2011 will be remembered as yet another dismal year for most of the technology trade publishing sector. Connected Planet, a U.S.-based telecom industry magazine with an accomplished track-record which spanned across a century, ceased operations.

It was one more example of where advertising revenue could no longer sustain a legacy print publishing business -- even after it's been rebooted as a lower-cost online-only publication.

This phenomenon, the prospect of prolonged low profitability, will surely claim more publication closures and traditional media company victims in 2012, but the broader market outlook is apparently not as bleak -- from a top-line advertising revenue perspective.

Overall U.S. online advertising spending will growth above 20 percent again this year -- to reach nearly $40 billion, according to the latest market study by eMarketer.

Double-digit growth is forecast through 2014, when U.S. online ad spending will reach $52.8 billion. In 2016, eMarketer optimistically expects advertisers to spend an amazing $62 billion online.

"Advertiser comfort level with integrated marketing is greater than ever, and this is helping more advertisers -- and more large brands -- put a greater share of dollars online," said David Hallerman, eMarketer principal analyst.

Online has moved ahead of some traditional media -- especially print newspapers and magazines. In fact, U.S. online ad spending will exceed the total spent on print magazines and newspapers for the first time in 2012, reaching $39.5 billion (online) vs. $33.8 billion (print).

That said, spending on TV ads appears somewhat unaffected by the growth of online. As internet ad spending rises, so will TV -- although more slowly, and from a larger base.

eMarketer estimates TV advertising will attain $72 billion in U.S. ad spend by 2016 -- that's $10 billion more than will go online.

Overall, total media ad spending is forecast to grow by 6.7 percent this year to $169.5 billion, boosted by national election campaigns and gains in mobile spending. Growth will be in the 3 to 4 percent range for the remainder of the forecast period, with spending reaching nearly $200 billion by 2016.

eMarketer believes that online will be a driver of growth and will represent nearly a third of total media ad spending that year. Traditional media ad spending -- aside from a few dim bright spots, such as TV -- will stagnate during the forecast period.

How Consumers Use Their Smart Mobile Devices

2012-01-20T07:57:00.001-06:00

Multifaceted mobile devices, such as smartphones, are now pervasive in many markets. Moreover, these coexist with various other types of mobile computing or communication devices. The trend in developed markets is clear -- consumers are likely purchasing these devices with specific primary use-case scenarios in mind.

Whether that preferred device is a laptop PC, smartphone, portable media player (PMPs), or media tablet depends on many factors. According to the findings from the latest market study by NPD In-Stat, they have been able to identify survey respondent's defining attitudes and behaviors toward these smart mobile devices.

One key finding was that the size of the screen tends to create an optimal use case for the device. Specifically, larger screen devices seem to fulfill productivity needs while smaller screen devices tend to satisfy communication or entertainment needs.

"The majority of tablet owners have a screen size between 9 and 11 inches -- a size optimized for sophisticated uses that require a lot of interaction," says Stephanie Ethier, Senior Analyst at NPD In-Stat.

The top uses for tablets are web browsing, email, and downloading and using applications, which are productivity-based uses. The larger screen supports more heavy text consumption and greater user interaction.

Portable media players, which can be virtually identical to tablets except for the smaller-than-5-inch screen, are used primarily to support entertainment-focused uses --such as listening to music and watching video.

Other findings from the market study include:

47 percent of the respondents had a PMP with a screen size from 2.5 to less than 5 inches.
Apple iPad is the current overall favorite media tablet device.
54 percent of the respondents cited personal information management as a top use for notebook and netbook PCs.
Smartphones are the most often used device while watching TV.

Tablet Usage for Online Shopping During UK Holidays

2012-01-19T02:49:00.000-06:00

Tablet use during the 2011 UK holiday season doubled compared with 2010, as 8 percent of consumers now use these devices as their main means of getting online, according to a new market study by eDigitalResearch and IMRG.

The results also saw record numbers of consumers visiting social media sites over two days, with just under half (45 percent) of online users logging into their accounts, up from 20.8 percent last year.

The annual Christmas activity survey also saw a 1 percent rise in the number going online with 86 percent of all UK online consumers now logging on over the two days.

Derek Eccleston, Head of Research at eDigitalResearch, said "Looking at the results, we can see that the internet is now a crucial part of everyday consumer life. Many see logging on during Christmas and Boxing Day as the norm, especially when trying out new gadgets and Christmas gifts."

The rise in tablet use and social media sites is an indication of what's to come in 2012. It's important for retailers to optimize online use across all available channels, in order to boost income and customer loyalty.

The survey also found that more and more people used the internet, as well as their smartphones, for their Christmas shopping this year. About 71 percent of consumers purchased some of their gifts online, up 1.3 percent compared with year, while half of all online consumers now say that they do the majority of their Christmas shopping online.

Approximately 18 percent of smartphone owners did up to half of their Christmas shopping online, with almost 30 percent saying that they did up to 50 percent of their pre-purchase research on their mobile device.

For the first time this year, shoppers saw discounts across the high street and online before Christmas day itself -- as retailers attempted to get consumers spending again.

Of the 2,000 people surveyed, 66 percent of shoppers said that their gift purchasing decisions were influenced by the sale promotions, while 29 percent were encouraged to buy more than they were originally planning.

Andrew McClelland, Chief Operations & Policy Officer at IMRG, said "iPads and Kindles were among the most wished-for gifts this Christmas and their popularity as a means for accessing the web is booming. The phenomenal popularity of social media is also continuing to grow at a remarkable rate, with over double the amount of people logging onto them over Christmas Day and Boxing Day compared with 2010."

Social networks and tablets should be considered as a key part of a retailer's marketing strategy, as the opportunities for consumer engagement through these channels are becoming very apparent.

SuperSpeed USB will Enable Digital Media Transfer

2012-01-18T07:48:00.000-06:00

As the number of consumer electronic (CE) devices and their capabilities continue to evolve and converge, many require significantly more communication bandwidth to provide the quality interactive experience users have come to expect.

SuperSpeed USB brings significant performance enhancements to the ubiquitous USB standard, while remaining compatible with the billions of USB-enabled devices currently deployed in the market. The additional throughput is required to accommodate the need to transfer large digital media files between devices.

According to the latest market study by NPD In-Stat, they now forecast that SuperSpeed USB-enabled device shipments are on a fast track and will surpass 1 billion in 2014, that's up from 70 million in 2011.

"Because the throughput of SuperSpeed USB, ten times that of high-speed USB, is not required in some devices, adoption will not initially be as broad as for full- and high-speed USB," says Brian O’Rourke, Research Director at NPD In-Stat.

That said, SuperSpeed USB will gain significant initial penetration in markets requiring transfers of increasingly larger pools of data.

This process is already well underway, as evidenced in the USB Implementer Forum December announcement that Intel's 7 Series PC Chipset and C216 PC Chipset family achieved SuperSpeed USB certification -- guaranteeing increased SuperSpeed penetration of the PC market.

Other insights from the market study include:

Low-Speed and Full-Speed USB attach rates for keyboards will be 81 percent in 2013.
Notebook PCs will be the single largest device that will ship with SuperSpeed USB capability in 2015.
High-Speed USB-enabled device shipments will peak in 2012.
In 2015, 5.5 billion devices will ship with some type of USB capability.

Demand for Video Communication via Mobile Networks

2012-01-17T04:59:00.000-06:00

According to the latest market study by ABI Research, video communications and online messaging services over mobile networks were used by fewer than 47 million subscribers at the end of 2011, but will grow to reach 390 million users in 2016.

Mobile network operators once regarded video communication as the likely successor to voice communication and a source of potential new revenue, but their expectations are now more realistic.

Free alternative video chat offerings will always be available, which requires the service providers to offer substantive value-added offerings that are likely to generate revenue. That said, challenges remain in the marketplace.

"Only a small minority of consumers are willing to pay a premium price for video calls," says senior analyst Aapo Markkanen at ABI Research.

Video services will be monetized by their bundling with other communication media, promoting premium features to enterprises, and/or delivering advertisements.

But could operators seek an edge by offering a better system than the free over-the-top players? Markkanen is skeptical, pointing to the evidence from voice and text messaging services.

"Traditional mobile services didn't evolve in a practical sense with the operators in the driver seat. I seriously doubt they can reinvent video communication services," he said.

Perhaps the most serious dilemma for the mobile service providers is the lack of interoperability between the separate video ecosystems. Allowing the different ecosystems such as Tango, fring, and Apple's FaceTime -- as well as all the carrier services -- to seamlessly interconnect with each other is a big challenge.

However, if video chat service interoperability can be addressed effectively, then the large-scale adoption of mobile video applications could be closer than expected.

These findings are from ABI's study of services that are provided to consumers either by mobile network operators or by over-the-top (OTT) service providers. Their report covers video telephony, video messaging, and video sharing, as well as Video-on-Demand consumption.

Asia-Pacific Region will Drive the Mobile Enterprise

2012-01-16T08:44:00.000-06:00

As more smartphones and media tablets enter the workplace, the world's mobile device-enabled worker population will reach 1.3 billion by 2015 -- that represents 37.2 percent of the total workforce.

According to the latest global market study by International Data Corporation (IDC), the most significant gains will be in the emerging economies of the Asia-Pacific region -- thanks in part to continued economic growth.

In contrast, the Americas will experience a slower growth rate due to a protracted economic recovery and high rates of unemployment.

"Despite recent market turmoil, mobility continues to be a critical part of the global workforce and we expect to see healthy growth in the number of mobile workers," said Stacy Crook, senior research analyst for IDC's Mobile Enterprise Research program.

IDC's forecast shows that the worldwide mobile worker population will increase from just over 1 billion in 2010 to more than 1.3 billion by 2015.

Key findings from the latest IDC study include:

The Americas region, which includes the United States, Canada, and Latin America, will see the number of mobile workers grow from 182.5 million in 2010 to 212.1 million in 2015. North America has the largest number of mobile workers in this region, with 75 percent of the workforce mobile in 2010.

Asia-Pacific (excluding Japan) will see the largest increase in total number of mobile workers with 601.7 million mobile workers in 2010 and 838.7 million in 2015. Much of this is due to the sheer size of the population in China and India, combined with strong economic expansion in both countries.

In Europe, the Middle East and Africa (EMEA), the mobile workforce will see a healthy compound annual growth rate (CAGR) of 5.6 percent as it expands from 186.2 million in 2010 to 244.6 million mobile workers in 2015.

Japan will see a declining CAGR of 0.2 percent because of its declining population base. However, the share of mobile workers will reach a penetration rate of 64.8 percent of its workforce by 2015, for a total of 38.6 million mobile workers.

Mobile Content Revenue to Exceed $1 Billion by 2015

2012-01-14T10:55:00.000-06:00

New product announcements and service demos at CES confirmed what many pundits predicted, a variety of mobile devices -- media tablets and smartphones, in particular -- and digital media streamed from the cloud was a pervasive theme.

Indeed, the future upside opportunities for mobile content look very promising.

According to the latest market study by eMarketer, ad-supported mobile content revenues will exceed $1 billion by 2015 -- with the fastest growth coming from advertising support for mobile video.

Last year, U.S. mobile video revenues from advertising reached just $37.5 million, but by 2015 advertisers will spend $213.6 million on ad placements that support mobile video content.

Regardless, that's still lower than the amounts spent on advertising against mobile games and mobile music -- estimated at $65.3 million and $181.4 million, respectively in 2011. Both are forecast to grow to $269.1 million and $591.5 million, respectively, by 2015.

Looking forward, eMarketer now estimates that 29.9 percent of all mobile content revenues -- or $1.07 billion in 2015 -- will come from advertising.

To date, mobile music has the greatest share of spend coming from ads, and it will hold that position, with advertising and promotion spend making up 73.9 percent of the total in 2011 and 79.3 percent by 2015.

The fast growth of mobile video advertising revenues will mean changes in the revenue mix. While ad dollars comprised just 5.4 percent of mobile video revenues in 2011, by 2015 it will more than triple to 16.5 percent.

By contrast, mobile gaming ad revenues will also rise as a proportion of the total spend, from 13.8 percent in 2011 to 17.4 percent by 2015.

The eMarketer forecast of mobile content spending starts with a meta-analysis of data from dozens of research sources -- as well as overall market trends and consumer behaviors around mobile gaming, music and video.

How Pay-TV Advertising will Shift to New Formats

2012-01-13T06:55:00.000-06:00

Increasing consumer adoption of new video entertainment formats -- including video-on-demand (VOD) and viewing on media tablets and smartphones -- will cause up to $22 billion (30 percent) of the U.S. pay-TV advertising market to shift to new formats by 2016.

Western Europe will see similar shifts in advertising revenue, while the rest of world will lag in its transition of advertising to these new formats. Regardless, the eventual realignment of all marketer's advertising budgets will have a dramatic impact on the legacy ecosystem.

"A shift is already underway in the television advertising marketplace from linear ads inserted by a 24-hour schedule to advanced technologies that will increase the effectiveness of advertisers' spending," says Sam Rosen, senior analyst, digital home, at ABI Research.

New technologies are achieving scale within broadcasters' advertising systems, notably audience measurement and tracking, targeted advertising, interactive advertising, VOD and multiscreen advertising, and other techniques -- including companion devices.

Many of the companies leading the charge in the advanced advertising ecosystem are yet to become mainstream industry players. Therefore, they're likely to disrupt the current status quo.

They're the specialists that will drive the shift, as new advertising formats develop. They including: Canoe Ventures (interactive ads), BlackArrow (VOD ads), This Technology (dynamic ad platform), INVIDI and Visible World (targeted or addressable ads).

Numerous technology components are required to deliver these new advertising formats. According to the latest market study by ABI Research, the vendor ecosystem will rapidly expand to addresses these market opportunities.

The market study explored advertising technology used in television, Internet and over-the-top (OTT) video platforms, traditional linear TV, catch-up TV, DVR/PVR storage, and VOD platforms.

Vendor opportunities identified by the study include:

Advertising-specific hardware and software systems -- such as ad servers, ad splicers, ad decision systems, and traffic and billing systems.
Advertising-specific components of set-top box middleware -- such as measurement and reporting tools, interactive stacks, and interactive applications.
Advertising-specific VOD software.

1.67B Mobile Phones Shipped Worldwide by 2012

2012-01-12T06:04:00.000-06:00

As memories of the holiday season drift away, the mood among mobile phone handset vendors remains quietly confident, regarding the 2012 upside opportunity.

"The outlook will yield growth in the order of 8 percent, netting 1.67 billion handsets shipped worldwide by the end of 2012. Particularly notable is for the first time, 3G and 4G handset shipments will capture more than 50 percent of total handsets shipped,” said Jake Saunders, vice president of forecasting at ABI Research.

In the second half of 2011, tier one smartphone vendors began redoubling efforts to promote their smartphone line-up to upwardly mobile, aspirational smartphone owners in emerging markets.

Samsung has been making substantial inroads into the emerging country smartphone market. Apple is expanding sales channels in emerging markets, with greater success in China than it’s having in India, but is also targeting South American markets such as Brazil.

HTC is gaining traction in China, but developed markets such as North America and Europe continue to be the mainstay of its growth markets. RIM, despite its weakness in apps-capable smartphone markets, continues to do well in messaging-centric emerging markets such as Indonesia.

Nokia hopes to benefit from Windows Phone 7 Lumia series launches in India (Dec-2011) and China (in 1Q-2012). In recent years Nokia has suffered badly from a lack of popular handsets. Clearly, they lost their designer mojo. Perhaps they can recover in 2012.

The North American handset market, driven primarily by smartphones, is proving oblivious to the Eurozone debt crisis. North America is estimated to have closed 2011 with 228 million handsets shipped, for a year-on-year (YoY) growth of 14 percent -- that's the region's highest YoY growth in more than five years.

North America may only represent 15 percent of feature and smartphone units shipped globally, but due to the high proportion of high-end smartphone sales, it constitutes 40 percent of total smartphones sold by value.

"It underscores what is at stake in the patent battles between Apple, Samsung, Motorola, Google, HTC, Microsoft, and even British Telecom,” says Kevin Burden, vice president and practice director, mobile devices at ABI Research.

Three Billion Apps Have Been Downloaded to iPads

2012-01-11T07:53:00.000-06:00

By all accounts, 2012 will be the year that media tablet adoption accelerates. Tablet usage by existing device owners has skyrocketed. As an example, Apple iPad users are estimated to have already cumulatively downloaded three billion applications since the launch of the iPad in 2010.

This was 19 percent of all cumulative downloads by Apple users. According to the latest market study by ABI Research, the Apple iPhone took two years before being able to achieve this level of downloads, while the iPad took a year and a half.

By comparison, Google Android tablets have reached 440 million downloads thus far.

"Discounting all those apps that were originally developed for Android smartphones, Android still trails greatly behind the iPad in terms of its tablet app offerings," says research associate Lim Shiyang at ABI Research.

Many Android tablets in the market are still using older versions of the OS, which disadvantages users from enjoying the better effects of apps produced from more advanced software development kits.

Besides offering a larger quantity of iPad-specific apps, iOS apps are generally considered to be of a better quality compared to Android tablet-specific apps. As of Q3 2011, there were 120,000 apps published specifically for the iPad.

The iPad device typically offers more features compared to the other current tablets in the market. In contrast, Android is currently being used on many more low-end tablets that may offer better overall value.

However, things are expected to change as manufacturers adopt the recently-released Android 4.0, code-named Ice Cream Sandwich, as well as accelerate new product development to close the specifications gap.

Furthermore, annual Android app downloads for smartphones are expected to reach 58 Billion by 2016, compared to 27 billion for Apple’s iPhone.

Why Mobile VoIP Subscribers Tripled in 2011

2012-01-10T07:12:00.001-06:00

All mobile phone service providers initially resisted any new capability that might reduce revenue from voice calls. However, driven by increased smartphone penetration and a growing breadth of offerings, mobile voice-over-IP (VoIP) usage is now on the rise.

Moreover, the upside potential for greater adoption in 2012 is significant.

As the addressable market of potential users increases with smartphone penetration a greater number of providers are introducing services -- including a growing handful of forward-thinking mobile operators that are beginning to embrace, to some degree, mobile VoIP.

According to the latest market study by NPD In-Stat, active mobile VoIP subscriber rates tripled in 2011 -- growing from 9 million in 2010 to 29 million last year.

"While VoIP is a well-defined market, mobile VoIP is still in its infancy, with most offerings only being developed over the past several years, and because it’s in its nascent stage, there are significant opportunities for companies to develop the market," says Amy Cravens, Senior Analyst at NPD In-Stat.

However, there are also a number of uncertainties, which is not surprising in a new market. The greatest concern being mobile operator's fear of cannibalizing their legacy voice service revenue. Hopefully, the global market leaders will convince other mobile operators to innovate with new VoIP offerings.

NPD In-Stat's latest market study analysis includes:

The primary distribution channel utilized by respondents to access mobile VoIP offerings is through the OS application store.
The largest concentration of mobile VoIP users is in Western Europe.
Revenues associated with mobile VoIP usage will increase to over $4 billion in 2015.
LTE operators are not likely to have a significant impact on the mobile VoIP market until 2013.

CES 2012 Preview - What to Expect at the Show

2012-01-09T06:00:00.000-06:00

The international Consumer Electronics Show (CES) 2012 will be held in Las Vegas, Nevada this week. Consumer and enterprise technology industry analysts will use this exhibition to determine where all the leading vendors are focusing their attention for the coming year.

Ovum has shared some pre-show trend predictions as follows:

Consumer Market Related Trends at CES 2012

Media Tablets: Expect more Google Android "Ice Cream Sandwich" devices, as well as Samsung's Windows 8 tablet. OEMs will pursue the high-margin enterprise tablet market -- as well as the consumer market --so expect to see Mobile Device Management capabilities and partnerships.

Connected Home: The DECE will be promoting new OEM and retailer partnerships. Ultra high definition TVs will be demonstrated. Smart TV application platforms and new user interface models for EPG and metadata navigation are also likely, as well as media sharing over DLNA. Google TV and Android STB OEM/ODM deals will be announced.

AT&T Dominance: Expect AT&T to be the dominant U.S. service provider making news, with several major device launches. Expect little from Verizon Wireless, which had lots of device launches last year -- plus, they will likely have more announcements at MWC, next month.

Mobile DTV: Expect to see more mobile DTV announcements, including a focus on in-car integration and the Metro PCS announcement. But there are execution risks -- such as the ecosystem, business model, OTT competition, lack of consumer demand and spectrum allocation challenges.

BlackBerry Platform: Expect RIM to showcase its BB Tablet OS 2.0, though it is not clear if they will also use the event to launch the Playbook 2 or announce it at a later date. RIM will likely not demo BB 10 at the show -- they will wait until MWC.

Enterprise Market Related Trends at CES 2012

Tablets and BYOD: Expect a number of Google Android related announcements, with some targeting the Apple iPad lead in the enterprise media tablet market. Mobile device management aand data security capabilities will be part of their offering. Expect to see multiple UI personas on a single device, enabling user access permissions when connected to enterprise resources.

Ultrabook PCs: Given the 2011 netbook market results, plus category threat from both smartphones and media tablets, expect a large number of PC manufacturers to announce ultrabook devices. These will mimic the MacBook Air. However, a multitude of Android tablets will make it difficult for new ultrabook availability to translate into significant market share in 2012.

Microsoft Windows: Expect more insight into Windows 8. Microsoft will likely enable the enterprise to manage the accelerating employee-provisioned PC and tablet trend. Expect clarity over which apps will run on ARM architecture and whether old Windows apps will still run on the new Windows 8 tablets. Plus, details on applications for its Kinect-based gesture interface in the enterprise.

Dell Strategy: They have apparently scaled back their presence at CES this year. Expect them to demonstrate a new strategy for the home market. Watch for a likely consumer IT angle for the enterprise.

Wi-Fi 802.11ac: An important development for all IP networking, Broadcom is rumored to demo pre-standardization versions of the updated WiFi standard that will take wireless LANs to 1Gbps. Expect to see router devices this year that will anticipate the final protocol.

Do you have an expectation for significant trends at CES 2012? Please do comment...

U.S. M-Commerce Sales to Reach $31 Billion by 2015

2012-01-07T08:53:00.001-06:00

More and more people are willing to buy products and services online. According to the latest market study by eMarketer, U.S. mobile commerce sales -- including travel related services -- surged 91.4 percent to reach $6.7 billion in 2011.

Ongoing growth is forecast to boost sales to $31 billion in 2015.

The key market development trends are already in motion. Familiarity with using mobile shopping services via a smartphone -- plus an increasing number of retailers launching mobile optimized websites and apps -- will play an important role in driving additional m-commerce sales.

"To keep up with consumer expectations, retailers are bolstering their mobile offerings," said Jeffrey Grau, eMarketer principal analyst. “Retailers were slow to react to consumer interest in mobile shopping. But now they are making great strides in launching mobile websites and apps."

This accelerated momentum will help U.S. m-commerce related revenue grow at a compound annual rate of 55 percent from 2010 to 2015 -- that's including 73.1 percent growth expected this year.

eMarketer believes that in 2011 mobile shopping became synonymous with smartphone shopping. The percentage of mobile shoppers who were smartphone users jumped to 93 percent, from 75 percent in 2010.

As people adopt smartphones they will naturally take advantage of powerful capabilities for doing a range of mobile activities -- including the researching, shopping and buying of merchandise.

Completing a purchase via mobile is less popular, however, with only 26.8 million mobile users estimated to have done so in 2011 -- but that's predicted to rise to 61.8 million in 2015.

"Purchases from mobile phones still account for a tiny share of total e-commerce sales," said Grau. "However, in some retail categories like flash sales and tickets, retailers report a much higher share of sales coming from mobile users."

Smartphone Usage Drives Demand for Small Cells

2012-01-06T08:13:00.000-06:00

Smartphone adoption will continue on its upward trajectory. According to the latest market study by NPD In-Stat, as a result, mobile phone data usage is increasing by a factor of 70-100 percent annually.

To meet this demand, cellular network architectures have to fundamentally change to provide the required infrastructure needed for adequate coverage, cell density, and local community resistance to traditional macro cell base station deployments.

Increasingly, small cell deployments are being used to enhance mobile wireless network coverage. Femtocells will be used in residences and enterprises alike. Picocells will be used to provide coverage indoors and outdoors, with microcells employed to cover areas where macrocells would be overkill.

The latest NPD In-Stat global market assessment predicts the retail value of small cell shipments will reach $14 billion in 2015.

"The potential that true mobile broadband offers in personal communications, commerce, and social networking becomes a curse for mobile operators," says Chris Kissel, Senior Analyst at NPD In-Stat.

Use case determines the form factor. Studies indicate that 75 percent of mobile broadband connections are made indoors. This means that mobile operators have to ensure QoS for subscribers in their homes, at their jobs, and at their leisure.

Radio Access Network (RAN) devices have to show versatility. If thought of as small cells, RAN devices can provide access to as few as four users or as many as a thousand.

The NPD In-Stat market study found the following:

In 2015, the retail value of femtocells in Eastern Europe is estimated to reach $265 million.
Roughly 30.7 million WCDMA/HSPA residential femtocells will be shipped in 2015.
Worldwide outdoor metropolitan picocell unit shipments will have a CAGR of 248 percent over the five-year forecast period.
In 2011, the value of voice and data services hosted by small cell devices is $3.2 billion globally.

91.4 Million Americans Now Own a Smartphone

2012-01-05T06:57:00.000-06:00

comScore reported the key trends in the U.S. mobile phone industry during the three month average period ending November 2011. Their market study surveyed more than 30,000 U.S. mobile subscribers and found that 234 million Americans age 13 and older used mobile devices.

Device manufacturer Samsung ranked as the top OEM with 25.6 percent of U.S. mobile subscribers (up 0.3 percentage points), followed by LG with 20.5 percent share and Motorola with 13.7 percent share.

Apple strengthened its position at number four rank -- with 11.2 percent share of total mobile subscribers (up 1.4 percentage points), while RIM rounded out the top five with 6.5 percent share.

91.4 million people in the U.S. owned smartphones during the three months ending in November -- that's up 8 percent from the preceding three month period.

Google Android ranked as the top smartphone platform with 46.9 percent market share, up 3.1 percentage points from the prior three-month period.

Apple maintained its number two position, growing 1.4 percentage point to 28.7 percent of the smartphone market. RIM ranked third with 16.6 percent share, followed by Microsoft (5.2 percent) and Symbian (1.5 percent).

In November, 72.6 percent of U.S. mobile subscribers used text messaging on their mobile device -- that's up by 2.1 percentage points. Downloaded applications were used by 44.9 percent of subscribers (up 3.3 percentage points), while browsers were used by 44.4 percent (up 2.3 percentage points).

Accessing of social networking sites or blogs increased 2.1 percentage points to 33.0 percent of mobile subscribers. Game-playing was done by 29.7 percent of the mobile audience (up 1.2 percentage points), while 21.7 percent listened to music on their phones (up 1.0 percentage points).

Google Android Market Share is Advancing Globally

2012-01-04T05:28:00.000-06:00

The accelerated adoption of Android-based smartphones is a global phenomenon. According to the latest (2011 Q3) market study by IDC, Samsung has now overtaken Apple and grew share for a third consecutive quarter in the Australia and New Zealand (ANZ) overall mobile phone market.

Overall the Australian mobile phone market dipped by 17 percent quarter-on-quarter (QoQ) by shipments across both smartphones and feature phones categories. The smartphone market is now 65 percent of the total Australian mobile phone market.

Google Android has overtaken Apple iOS in first position -- holding 49 percent market share. Apple iOS in second place now holds 36 percent unit share as the market eased in preparation for the new iPhone 4S launched in October 2011.

"Collective efforts to expand brand presence from all Android manufacturers at all price points will increase consumer choice and drive demand, which in turn will help Android grow to at least 40 percent market share over the next 3 years. Samsung has climbed to the number one position as a result of a strong push for its Galaxy S II," said Yee-Kuan Lau, market analyst for IDC ANZ.

HTC, being the number two Android vendor in Australia, continues to grow its market presence with its product portfolio expansion in the second half of 2011.

New Zealand’s feature phone and smartphone markets, on the other hand, recorded a 55 percent QoQ growth. The smartphone market holds 43 percent of the total Q3 New Zealand mobile phone market, with Samsung overtaking Apple's number position with a share of 28.5 percent of the smartphone market.

Huawei, in second place, holds 20 percent of New Zealand’s Q3 smartphone market followed by Apple with close to 13 percent unit share.

"While Apple’s iPhone shipments slowed down in preparation for its new iPhone 4S launch in New Zealand, Samsung led the smartphone market for the first time with some of its flagship models such as Galaxy S II and Galaxy 5 performing very well. Huawei continues to expand its local market presence and contributed to the growth in sub-$200 smartphones with its U8180 Ideos X1 model sold via Telecom," added Ms. Lau.

There's been a gradual shift in demand by cost-conscious consumers to low-cost Android smartphones from feature phones across ANZ, as more low cost smartphones are becoming available in the market. In Australia for example, the shift in demand from feature phones has helped boost sales in the sub-$150 segment with low-cost Android smartphones.

There was an intense OS battle, particularly in Australia, during 2010. IDC expects Android to win in the Australian smartphones tussle. In New Zealand, Android is expected to widen the gap and maintain the lead in the smartphones market. IDC expected close to 9.5 million smartphones to be shipped to ANZ channels by the end of 2011.

Top 10 Insights about Global Social Network Trends

2012-01-03T07:07:00.000-06:00

ComScore released the results of a recent global market study in a report entitled "Top 10 Need-to-Knows About Social Networking and Where It’s Headed." The goal of this report is to frame the current state of social networks through the lens of how users around the world have grown to use them over time.

This report addresses questions such as:

How extensive is consumer usage of social networking and how does it vary by country?
What is the current rate of social networking adoption in different parts of the world?
Which sites are driving this adoption in different markets?
How are these consumer usage dynamics changing over time?
Where do these trends appear to be headed in the future?

The report includes a summary of the current state of social networking activity -- as measured via passively observed digital consumer behavior -- providing background research and analysis on this topic. The top ten insights are:

Social networking is the most popular online activity worldwide.
Social networking behavior both transcends and reflects regional differences around the world.
The importance of Facebook cannot be overstated.
Microblogging has emerged as a disruptive new force in social networking.
Local social networks are making inroads globally.
It’s not just young people using social networking anymore – it’s everyone.
‘Digital natives’ suggest communications are going social.
Social networking leads in online display advertising in the U.S., but lags in share of dollars.
The next disrupters have yet to be decided.
Mobile devices are fueling the social addiction.

All data in this report sourced to comScore Media Metrix is based on Internet usage from home and work-based computers from comScore’s proprietary, opt-in research panel, consisting of 2 Million people sourced from 171 countries. Data is individually reported for 43 of those countries. Media Metrix data excludes activity from mobile phones, tablets and other connected devices.

Data from mobile devices comes from two other products in the comScore mobile solutions suite which are available in a subset of these markets and are sourced accordingly. comScore MobiLens data is sourced from an intelligent online survey of nationally representative samples of mobile subscribers age 13+ in the U.S., UK, France, Germany, Spain, Italy, Canada, and Japan.

comScore GSMA Mobile Media Metrics (MMM) provides a census-level solution for mobile media reporting in the UK, taking irreversibly anonymised mobile Internet usage data from 3 of the 4 UK mobile operators comScore Ad Metrix data sourced in this report refers to the U.S. market only.

The full report can be downloaded from the comScore website.

Broadband Service Providers Seek a New Upside

2012-01-02T05:53:00.000-06:00

At the close of last year, Infonetics Research released the findings from their third quarter 2011 (3Q11) market study of broadband access equipment and home networking devices. Looking forward, wireline broadband service providers will continue to seek new upside revenue opportunities -- due to market saturation for basic Internet access offerings.

"As we mentioned earlier, we expect the global wireline broadband CPE market to peak in 2011 due to a surge of infrastructure investments this year by service providers, especially in emerging markets," said Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.

With a bulk of the infrastructure groundwork already laid, many broadband service providers must now shift their focus to provisioning new services in subscriber homes. However, basic internet access service growth potential still exists in a few emerging markets.

Infonetics says that they're already seeing steady growth in wideband cable customer premise equipment (CPE) and fiber-to-the-home CPE -- particularly in China. It's a clear trend that some operators are investing in the next generation of superfast broadband technology for the home.

The shift away from basic modems to high-end devices, such as VDSL gateways, VDSL IADs, wideband cable gateways and wideband EMTAs, reflects the fact that operators are preparing consumer homes with enough processing power to handle premium services -- from high definition (HD) video to home automation and home security.

Broadband CPE Market Study Highlights Include:

ZTE held on to its #1 spot for broadband CPE revenue and shipments in 3Q11, helped by its partnership with China Telecom to deliver Ethernet FTTH infrastructure and CPE for higher-end residential complexes in Shanghai, leading to a surge in Ethernet FTTH ONT shipments this quarter.
Motorola and Huawei tied for 2nd for overall broadband CPE revenue, followed by Technicolor and ARRIS.
Global broadband CPE revenue held steady (up 1 percent) in 3Q11 over 2Q11, with FTTH CPE revenue up 16 percent, cable CPE up 2 percent, and DSL CPE down 6 percent.
Year-over-year, global FTTH CPE revenue is up 36 percent, cable CPE is up 18 percent and DSL CPE is up 4 percent.
ZTE also took the top spot in the highly-competitive FTTH CPE market from Huawei in 3Q11, and held onto the top spot in DSL revenue as well, thanks to the strength of ADSL gateway sales in China, EMEA, and Latin America.
Despite a 7 percent worldwide decline in cable CPE revenue, Motorola held onto the top spot in cable CPE.

Home Networking CPE Market Study Highlights Include:

The global home networking device market totaled $1.8 billion in 3Q11, down 2 percenet from 2Q11 as seasonal softness hit nearly all market segments.
Year-over-year, home networking device sales are up 10 percent worldwide.
Asia Pacific is the only region that posted a sequential revenue gain for home networking devices (up 6 percent), driven by a 9 percent revenue increase in broadband routers and a 16 percent rise in HomePlug powerline adapters.
In the highly competitive broadband router segment (up 19 percent from the year-ago quarter, D-Link extended its revenue share lead in 3Q11 after expanding its marketing presence outside North America and Asia; NETGEAR and Cisco follow in 2nd and 3rd respectively.

Pay-TV 2012: the Big Challenges and Opportunities

2011-12-31T11:13:00.003-06:00

The U.S. pay-TV market had an adoption rate that service providers in other nations would envy. For the longest time it seemed that the only way to go was up. The incumbent's quest for more channels was coupled with the desire to add new features like optional pay-per-view offerings and DVR capabilities in set-top boxes.

The result: upward trending subscriber growth -- with a corresponding increased revenue and profit.

Meanwhile, all the status-quo players supported a perpetual increase in the ongoing cost of sporting event programming. The assumption was that these high-cost sports channels would be subsidized by the masses. Everyone had to pay the price -- including subscribers that rarely or never watched ESPN.

The video entertainment ecosystem was tightly controlled by the business development needs of a few large media companies. Others in the ecosystem had to adapt to their demands -- therefore most complied. Nobody seemed to care that the fundamental business models were vulnerable -- because they were based upon dysfunctional business practices that limited innovation.

But what if pay-TV subscribers could find episodes of TV series and movie content from alternative (lower-cost) sources? Moreover, what if those new industry players were subversive and disruptive -- not willing to adopt the nonsensical rules of the legacy incumbents?

What if the marketplace, an assumed captive audience, truly had a choice?

Fragmentation: a Free Market for Video Entertainment

According the the latest market study by eMarketer, the U.S. online video ecosystem is thriving and poised for continued growth. Eager consumer viewership, technology adoption and high-quality content availability are driving the upside potential -- for at least the next four years.

The sites people use to watch premium video online are gaining momentum. Established destinations such as YouTube, Yahoo! and Facebook continue to grow, while other sites -- such as VEVO, the music video site -- are rapidly attracting more viewers and top advertisers.

Even high-profile online services that have struggled in recent months, including Netflix and Hulu, are maintaining market leadership and brand strength in their respective content areas.

"The convergence of audience growth, technology advances and content availability has provided marketers with a wealth of opportunities to attach brands to premium video,” said Paul Verna, senior analyst at eMarketer.

The Market Transition Advances Slowly, But Surely

According to eMarketer's assessment, the trend will continue in the coming years, but will be tempered by challenges -- including digital piracy, a lack of standardization in ad types and cost structures. In addition, there's the tendency for some old-school industry players to try and prolong restraint-of-trade practices that restrict content access to their preferred distributors.

Regardless, eMarketer anticipates that U.S. online video viewers will reach nearly 170 million by the end of 2012. Furthermore, young children (ages 11 and under) and senior (ages 65 and older) online viewers are growing at above-average rates -- as they catch up with the rest of the viewing public.

The momentum for adoption is still advancing. U.S. adult internet users who watch TV shows online will rise by double-digit percentages in the next two years. And, it's expected that nearly 60 million U.S. adults will watch full-length feature films online -- at least once per month in 2012.

"From movies and full-length TV shows to sports streams and made-for-web programming, video is finding receptive audiences on all types of connected devices," said Verna.

I'm expecting the trend will demonstrate that further fragmentation is good for the overall prospects of continued free market development, and that those players who welcome the emerging competitive landscape will help to create the much-needed new business model innovations.