Digital Lifescapes

136.7 Million Americans Now Own a Smartphone

2013-05-17T07:09:00.003-05:00

The growth of smartphone adoption in the U.S. marketplace has me wondering, how much more upside is available and when will we likely see full market saturation?

comScore released data that reported the key trends in the U.S. smartphone industry during the three month average period ending March 2013.

Apple ranked as the top smartphone manufacturer with 39 percent OEM market share, while Google Android led as the number one smartphone platform with 52 percent platform market share.

136.7 million people in the U.S. owned smartphones -- that's 58 percent mobile market penetration -- during the three months ending in March, up 9 percent since December.

Apple ranked as the top OEM with 39 percent of U.S. smartphone subscribers (up 2.7 percentage points from December).

Samsung ranked second with 21.7 percent market share (up 0.7 percentage points), followed by HTC with 9 percent, Motorola with 8.5 percent and LG with 6.8 percent.

Google Android ranked as the top smartphone platform with 52 percent market share (71.1 million subscribers), while Apple’s share increased 2.7 percentage points to 39 percent (53.3 million subscribers).

BlackBerry ranked third with 5.2 percent share, followed by Microsoft (3 percent) and Symbian (0.5 percent).

More recent reports from other market researchers say that Microsoft may be gaining market share globally, we'll have to wait and see if that's reflected in the U.S. marketplace.

Tablet Shipments Reached 49.2 Million in 1Q 2013

2013-05-16T05:30:00.000-05:00

Driven by increasing demand worldwide, media tablet shipments continue to surge across the globe, growing 142.4 percent year over year in the first quarter of 2013 (1Q13), according to the latest market study by International Data Corporation (IDC).

Tablet shipments totaled 49.2 million units in 1Q13 -- surpassing that of the entire first half of 2012. With growth fueled by increased market demand for smaller screen devices, tablets sales have shown no sign of slowing down.

Apple outperformed IDC's most recent projections for the quarter, shipping 19.5 million units compared to a forecast of 18.7 million units. The company, which historically has experienced a steep drop off in first quarter shipments (following strong holiday sales in the fourth quarter), saw some smoothing of that seasonality this year.

Number two vendor Samsung also performed above expectations and managed to grow its shipments over the fourth quarter 2012 as more of the company's smaller-sized tablets began to gain traction in the market.

Samsung has also used its recent Android smartphone growth to help bring its tablet product line into new markets and channels, leveraging the opportunity to package and bundle.

The strong performance of the two market leaders helped drive total shipments to an impressive 49.2 million units for the quarter.

"Sustained demand for the iPad mini and increasingly strong commercial shipments led to a better-than expected first quarter for Apple," said Tom Mainelli, Research Director, Tablets at IDC.

In addition, by moving the iPad launch to the fourth quarter of 2012, Apple seems to have avoided the typical first-quarter slowdown that traditionally occurred when consumers held off buying in January and February in anticipation of a new product launch in March.

ASUS managed to move into the number 3 vendor spot as it continued to see decent tablet shipment demand from the highly marketed Nexus 7 device. But, the company will need to find a way to sustain its momentum. Amazon fell to the number 4 position, once again the victim of a highly seasonal product cycle.

Microsoft, which is a focal point for many in the tablet space, entered the top five for the first time as shipments of its Surface RT and Surface Pro tablets combined for a total of just 900,000 units. Many of those units were Surface Pro, which the company started shipping to the U.S. and Canada in February.

Beyond the Surface products, Microsoft Windows 8 and Windows RT tablets continued to struggle to gain traction in the market. Total combined Windows 8 and Windows RT shipments across all vendors reached 1.8 million units.

Clearly the market is moving toward smart 7-8 inch devices, but Microsoft's larger challenges center around consumer messaging and lower cost competition. Perhaps they can recover from the many setbacks they've had entering the tablet market. We'll have to wait and see.

Top 10 Mobile Operators Achieve $202 Billion Profit

2013-05-15T06:04:00.001-05:00

Worldwide mobile service provider revenue, year-on-year (YoY) for 4Q-2012 grew 2.8 percent reaching $240.5 billion. According to the latest market study by ABI Research, the regional dynamic is varied.

Western Europe and Africa’s mobile operator actually demonstrated a contraction in service revenue YoY of 8.2 percent and 6.9 percent, respectively. Middle East, Latin America, and Asia-Pacific are still showing reasonably robust rates of growth of 7 percent to 11 percent.

Eastern Europe and North America, however, are only barely keeping their mobile service revenue growth in positive territory.

"As the underlying lift from accumulating subscribers has matured, carriers are starting to cast around for additional revenue streams that don’t just boost revenues but also profitability,” said Jake Saunders, VP for core forecasting at ABI Research.

There is still tremendous income to be generated from mobile network services. ABI estimates that the top ten mobile carriers alone generated $202 billion in gross profit, that's up by 4.2 percent year-on-year in 2012.

For some of those in the top ten, subscriber growth is still a major contribution (e.g. China Mobile, is 1st; MTN is 6th; and China Telecom, 8th). These mobile service providers may rely on expanding subscriber bases to drive overall profit for another 3 to 5 years. But after that, they will need to tap other sources of revenue.

For the other carriers in the top ten, securing a significant market share in their domestic or regional markets, combined with pooling infrastructure resources such as data centers, as well as group-level handset and equipment purchasing, has led to economies of scale.

Verizon Wireless (2nd), Vodafone Group (3rd), AT&T (4th), and NTT DoCoMo (5th) do hold significant market shares, but this does not entirely explain their success.

These companies have aggressively hopped onto the fourth innovation wave shaping the mobile telecommunications industry -- namely, IP-based value-added services.

OTT players can potentially sap the revenue opportunities for incumbent mobile telecom players but carriers, such as Verizon and AT&T, are showing that it's possible to put ARPU back on an upwards trajectory through the introduction of, for example, multi-device tariffs and M2M services.

4G LTE Revenue will Reach $340 Billion in 2017

2013-05-14T05:30:00.001-05:00

According to the latest market study by Juniper Research, the cumulative 4G LTE mobile broadband service revenues over the next five years will account for over $1 trillion.

That growth represents 17 percent of the cumulative global operator billed service revenue from all mobile services.

4G LTE revenues are set to grow rapidly and will reach more than $340 billion globally in 2017, reflecting the continued success of LTE in serving higher value mobile network subscribers.

The demand for high bandwidth wireless broadband services from end users and the availability of Wi-Fi on most mobile devices has compelled operators to address consumer expectations around quality and user experience while creating new opportunities for the industry.

"Along with the 4G network roll-out, the 4G/Wi-Fi combination will continue to provide a scalable and cost effective solution. It offers long term benefits, with the present offload platforms supporting future network infrastructures, and is now a priority for many operators," said Nitin Bhas, senior analyst at Juniper Research.

Their market study also uncovered that mobile network operators need to integrate Wi-Fi offload with other monetisation opportunities -- such as location based services (indoor and outdoor) -- to generate additional revenues.

The study found that with 4G LTE having gained momentum over the past 12 months, it is now critical that mobile network operators get their pricing models right, thereby avoiding a slowdown in adoption and revenue generation.

For example, in the UK, EE felt obliged to cut its initial LTE pricing by approximately 14 percent within weeks of its network launch, while Three UK announced 4G access at no extra cost.

Meanwhile, in the U.S. market, Verizon Wireless announced strong adoption of its "Share Everything" 4G data plans.

Other key findings from the market study include:

Mobile network operators who do not have deployment plans, will need to develop and implement their 4G strategies in order to remain competitive in the market.
Vendors need to continue to collaborate and address some of the remaining Wi-Fi or Small Cell challenges and issues.

Building Automation Market will Reach $43 Billion

2013-05-13T06:55:00.000-05:00

After years of steady but low growth, the commercial building automation systems (BAS) market is experiencing a rapid period of change and investment.

Traditionally, growth and adoption has been closely tied to new building completion but new entrants and new connectivity are driving greater investment.

According to the latest market study by ABI Research, over the next five years the building automation services market will grow to $43 billion -- that's up from $35 billion this year.

Two key factors are driving a new round of growth. Greater environmental and financial demands have raised the appeal of reducing energy consumption in commercial buildings and the benefits for optimizing building automation systems.

In addition, a new level of connectivity that stretches the reach of BAS apps from new sensors and actuators through to cloud application management and data analysis.

"This is a market long dominated by a handful of major players who deploy and manage commercial building management systems,” says Jonathan Collins, principal analyst at ABI Research.

Now these players are developing new ways to integrate and compete with a host of new service offerings. Perhaps we'll start to see some more meaningful examples of smart, connected building technology applications.

Dominant players Siemens, Johnson Controls, Honeywell, and Schneider Electric are increasingly seeing demand for their BAS systems connected to third-party player software as building owners gradually look to gain savings and offer additional level of control within their properties.

Within the BAS market, software and services will see the greatest revenue growth while hardware will lag as the pricing of actuators and switches fall.

In its latest market data analysis of the BAS market, ABI Research charts and forecasts the growing demand and revenue potential for building automation systems and the devices that connect to them.

Top 3 Mobile Service Innovation Demands in China

2013-05-10T06:26:00.000-05:00

The essential components of the mobile Internet -- network, device and application -- are all undergoing changes, along with the ongoing evolution of mobile communication industry.

Today, mobile devices increasingly meet various demands for communication, entertainment, learning, living, working, and access to innovative m-commerce applications.

They also enhance people’s sense of hearing, sight and touch; expand the breadth and depth of communication; and speed up the transformation of people’s way of thinking, lifestyle and working style.

These changes have directly contributed to the transformation of the mobile industry environment and ecosystem within China.

Device manufacturers are gradually penetrating into the traditional business areas of content providers, virtual operators and integrated managed service providers. Internet companies are expanding their territory into operation and device manufacturing. Software enterprises are extending from traditional enterprise applications to support growing mobility.

According to the latest market study by IDC, mobile network service providers are beginning to lose their competitive edge. In IDC’s opinion, the complexity and breadth of the mobile ecosystem requires telecom operators to have three new open competition strategies:

1. Be open to accepting and promoting mutual penetration and convergence of industry ecosystem players to maximize the business values of mobility technology, and build a win-win mobile ecosystem.

Globally, more operators are paying increasing attention to data traffic monetization and to improving the capability of converting data traffic to actual income. They're attempting to achieve service innovation and business model transformation via the opening up of service capabilities and cooperation with other ecosystem players.

Meanwhile, traditional telecom services are highly challenged in the era of mobile Internet and telecom operators are looking for new revenue streams within the growth of the sector.

However, it is very difficult for operators to achieve service innovation under their existing organizational structure and mechanism. Therefore, increasingly telecom operators are trying to cope with the mobile Internet challenges and opportunities by adjusting their organizational structure, merger and acquisition or establishing subsidiaries.

In the competition with Internet companies, telecom operators start to explore possibilities of utilizing their superior resources to seek cooperation in competition -- including launching service packages jointly and mobile advertising.

2. Grasp the technology trends. IDC believes that the third platform based on mobility, cloud computing, Big Data and social media will be the mainstream or even the single platform for future Information and　Communications Technologies. The four pillar technologies will be crucial to service innovation and operation management of telecom operators in future.

Since the low-cost smart phones entered the market in 2011, China’s smartphone market has maintained a high growth momentum in 2012 with a growth rate of 135 percent. The smartphone shipment has exceeded that of feature phones in Q2 2012, accounting for 52.5 percent of the total mobile phone shipment.

The gap between mobile devices and PC in terms of processing power is narrowing. IDC forecasts that by 2016 there will be 150 million people in China with more than two smart connected devices, nearly 100 million people with three smart connected devices. And the total install base of smart phones in China will exceed 600 million as of 2016.

Personal storage and sharing will become an important factor for the continuing rapid development of smart connected devices in 2013. IDC believes that consumers will gradually change the current local storage modes in the coming five years, and network storage will be the major storage approach for consumers in future.

Telecom operators can provide personal cloud storage services by leveraging the brand and security trust built among consumers for a long time, however for business differentiation they need to accelerate the transition from low-value storage and synchronization service to high-value intelligent Big Data analytic-based service.

Therefore, the value of Big Data for telecom operators not only lies in their internal operation and management, but more importantly in how to utilize Big Data mining and analytics to improve service innovation and precision marketing capabilities. It will be a tool for operators to enhance their competitiveness in the era of mobile Internet.

3. The development of third platform technology blurs the boundary of individuals and enterprises, creates new business opportunities for operators, and enables them to penetrate into the enterprise mobility market by leveraging their advantages in individual user market.

Mobility technology has been regarded by more enterprises as a key element of future workplaces. Developing a comprehensive mobility strategy, comprising various elements such as device, platform, network, application, social media, unified communication and security, has become a critical requirement for many enterprises.

Furthermore, employees are beginning to expect the same or similar device and application experience in the enterprise environment just like in their personal life. However, comparing with personal mobile applications, enterprise mobility involves a more complicated ecosystem, directly leading to the slow launch of large-scale enterprise mobility project.

Therefore, enterprises need a trustworthy partner with strong resource integration to guide them through the mobility journey from employee mobility to process mobility, then to channel and business mobility.

IDC study indicates that nearly 60 percent commercial smartphones in China are sold via telecom operators. IDC’s survey on corporate users also shows that telecom operators are the preferred partners for enterprises in deployment of their mobile applications. Hence, telecom operators can make full use of their advantages as device channel to provide integrated mobile application services for enterprises.

During this process, operators need to cooperate fully with other vendors in the mobility ecosystem and integrate resources to provide users with comprehensive enterprise mobility solutions, and complete the transition from being product-oriented to solution-oriented.

"Telecom operators have been confronted with unprecedented challenges under the impact of mobile Internet. Promoting ecosystem cooperation by utilizing their unique advantages and capabilities; exploring new changes arising from third platform; and enhancing the resource integration capacity to provide enterprises with integrated mobility solutions will help operators create business opportunities in the fast-changing mobile Internet era," said Kitty Fok, general manager of IDC China.

Smartphone Shipments Grew by 30 Percent in Q1

2013-05-09T14:10:00.001-05:00

The mobile communications sector continues to advance -- with new handheld devices driving mobile internet usage. Juniper Research estimates that the number of smartphone shipments reached almost 200 million in Q1 2013, representing a growth of 30 percent from the same quarter in 2012.

Samsung increased its smartphone market share by shipping an estimated 68 million smartphones and accounting for approximately 34 percent of all smartphone shipments in the quarter.

Samsung announced a steady pace in sales of the Galaxy SIII, and improved sales of the Note II for the quarter.

However, despite profits falling for the first time in a decade for Apple, they posted better than expected iPhone sales at around 37.4 million -- that's 7 percent growth compared to the same quarter in 2012.

With another product due soon, Juniper has joined other industry analysts who believe that Apple needs to innovate. The next product release must help Apple maintain their market position. Moreover, they'll need to ensure that they have a viable offer for emerging markets -- because that's where the upside growth resides.

LG posted its highest ever smartphones sales quarter, shipping 10.3 million in Q1 2013, driven by sales of the Optimus G and Nexus 4. The company improved its smartphone market share from last quarter to reach just over 5 percent.

Huawei, which previously posted impressive sales in 2012 with the introduction of a range of new smartphones and tablets, shipped an estimated 10 million smartphones. The company along with ZTE accounted for approximately 10 percent of the shipments market.

Nokia shipped 6.1 million smart devices in the fourth quarter and posted higher Lumia sales of 5.6 million compared to the previous quarter -- that's a 27 percent rise.

Recent results from BlackBerry are expected to account for almost 6 million smartphone shipments for Q1 2013. The Canadian company sold 1 million new BlackBerry 10 devices.

Despite a positive start, Juniper says that the BlackBerry and Nokia ecosystem will indeed need some more time to grow and drive further competition and innovation within the smartphone and OS marketplace.

Smartphone Adoption Grew as Apple Innovation Slows

2013-05-08T07:14:00.000-05:00

Across the globe an estimated 405 million mobile phone handsets -- including 197 million smartphones -- were shipped in the first quarter of 2013, according to the latest market study by ABI Research.

Smartphone shipments grew by 38 percent year-over-year (YoY), while feature phone shipments declined 5.2 percent YoY.

Shipments of all handsets grew 12 percent YoY in the first quarter thanks to the continued strength of the smartphone market, which achieved an all-time high of 49 percent shipment penetration.

"Worldwide handset and smartphone shipments exhibited classic Q1 softness," says Michael Morgan, senior analyst at ABI Research.

Samsung accomplished strong smartphone growth while Apple dismissed a troubling mix of slowed growth and declining margins as a sign that the older iPhone 4S was in high demand.

Nokia handset shipments plummeted to 62 million in Q1 with smartphone shipments at a 5-year low of 6.1 million.

Considering market and OEM specific conditions, BlackBerry delivered a respectable 6 million shipments, with 1 million coming from the launch of BlackBerry 10-based devices.

Despite HTC’s well-designed ONE devices, shipments continued to decline 37 percent YoY to 4.8 million. LG continued its revival with 10.3 million smartphone shipments and 16.2 million handset shipments.

"The last time a major smartphone OEM showed a trend of decreasing margins combined with falling ASPs and slowing growth, BlackBerry was still on the favorable side of a large market share and revenue drop," adds senior practice director Jeff Orr.

ABI believes that with major product announcements teased for Q3, Apple risks falling behind the innovation curve unless the next iPhone is more revolutionary than evolutionary. Has Apple lost its smartphone feature design mojo? We'll have to wait and see.

Mobile Gaming Market to Reach $23 Billion by 2017

2013-05-07T04:20:00.000-05:00

The mobile gaming market continues to be a high-growth opportunity. International Data Corporation (IDC) released the findings from its latest market study, a comprehensive assessment of the current state and future direction of smartphone, tablet, and gaming-optimized handheld (GOH) hardware and software.

Their forecast details the outlook for Apple, Google Android, Microsoft, Nintendo, Sony, and a wide range of game software developers and publishers from a mobile device and portable gaming perspective through 2017.

The GOH market category -- typified by the Nintendo's 3DS and Sony's PlayStation Vita -- has recently been overshadowed by gaming-capable smartphones and media tablets and this trend is likely to continue.

IDC research shows, for example, that the number of paying smartphone and tablet gamers will surpass the number of paying GOH gamers worldwide in 2013 and rise at a rapid rate through 2017.

The number of GOH bundles shipped, meanwhile, should fall at an average of nearly 7 percent per year over the next five years.

Apparently, the installed base of GOH devices is now being overwhelmed by the adoption of smartphones and tablets that are used for primarily casual gaming.

If there's a silver lining for devices like the 3DS and Vita it's that the GOH category should lead in a crucial sales metric through 2017: average revenue per user (ARPU).

Total mobile and portable gaming revenue, including digital and packaged game software, GOH hardware bundles, and direct advertising revenue going to platform suppliers and game developers or publishers, is forecast to approach $23 billion in 2017.

"Android remains quite fragmented but the platform is on its way to becoming a massively popular gaming platform within the Asia-Pacific market in particular," said Lewis Ward, research manager at IDC.

In order for Nintendo's and Sony's gaming-optimized handhelds to remain ahead of smartphones and tablets on key metrics -- such as ARPU -- these companies and their game card developer and publisher partners will have to redouble their efforts in a number of respects.

IDC believes that digital distribution has reached an inflection point in mobile and portable gaming, and future success will largely boil down to finding a unique balance of freemium business model excellence and that ability to deliver compelling social experiences.

Smartphones and Tablets Impact the Games Market

2013-05-06T06:31:00.001-05:00

By 2017 there will be 64.1 billion games downloaded onto smartphones and tablet devices -- that's over 3 times the rate in 2012, which stood at 21 billion -- according to the latest market study by Juniper Research.

This high rate of growth for games is being driven by the increasing number of free-to-play releases, more sophisticated devices, and the global adoption of smartphones.

Juniper's study investigated why this growth in the number of games downloaded would be so staggering.

It found that an increase in the number of sophisticated games -- which allow for truly multi-platform gameplay through the use of cloud technology -- meant that mobile would become the primary screen for gamers.

Greater memory on devices would also mean consumers were able to download more games onto their phones and tablets.

Another key point highlighted by the report is that tablet users are downloading over twice the amount of games onto their devices than smartphone users.

"Tablet games are growing so much because they are such an accessible way for all consumer segments to access games," said Siân Rowlands, research analyst at Juniper Research.

In particular mid-core gamers, who previously spent a lot of money and time playing games but now have jobs, families or other commitments, are driving this trend. These people are really embracing the tablet form factor, and innovative gameplay devices such as the mobile based OUYA console, really appeal to them.

In addition, Juniper analysed the impact made by smartphone and tablet games on the dedicated portable gaming device market.

They believe that mobile and tablet games will not mark the end of this market, but with players such as Nintendo cutting its sales forecasts by 14 percent for its 3DS, and 27 percent for its Wii U, it is hard to deny the challenge by the smartphone and tablet sector.

Other key findings from the market study include:

Social & Casual Games will remain the most popular genre downloaded, with over half of all smartphone games downloaded fitting this genre.
In 2017, only 7 percent of games will be paid for at the point of purchase across smartphones and tablets.

The Lack of Imagination within Digital Broadcast TV

2013-05-03T08:05:00.001-05:00

By end 2012, North America and Western Europe had effectively made the transition from legacy analog broadcast technology to digital terrestrial television (DTT) broadcasts.

The next milestone year (2015) was established by the ITU and a number of countries in Eastern Europe and Middle-East Africa are hoping to satisfy this goal.

With a later start to digital services a number of countries in these regions are starting with DVB-T2, avoiding the conundrum facing established DVB-T markets looking to migrate to the newer technology.

"If remaining analog shutoff timelines go largely as planned, we expect over 18 million DVB-T2 STBs will ship in 2015," said Michael Inouye, senior analyst at ABI Research.

Other potential factors, like spectrum reallocation for mobile broadband in Western Europe, might increase the demand for DVB-T2 boxes, but this likely won't be a significant factor until the latter half -- if not past the 2018 forecasting window, according to the latest market study by ABI Research.

While most countries have settled on a DTT technology, the path to digital is less consistent in other regions where multiple DTT technologies are present and future analog shutoffs span a wide time frame (2015 to 2020+).

Aiding the digital transition, Pay Terrestrial DTT operators subsidize the price of free-to-air set-top boxes in order to gain subscribers.

For instance, in Sub-Saharan Africa both StarTimes and GoTV -- a service of Naspers, parent of MultiChoice -- have launched Pay DTT platforms using a subsidized set-top box selling for about $35 while free-to-air boxes sell for approximately $60.

ABI Practice director Sam Rosen added, "Integrated televisions will certainly play a role in digitization, but set-top boxes, by necessity, are still the driver used to fully satisfy most ASO goals.
Proactive work from government agencies in the form of subsidies and consumer education remain vital components to a successful ASO, best suiting the lower cost STB as the digitization vehicle of choice.

After 2015, ABI expects demand for DTT set-top boxes will decline, but circumstances beyond ASOs could shift the outlook higher.

So far, the shift from analog to digital hasn't been a catalyst for product and service designers to re-imagine the TV experience. Perhaps that innovation will come later, when someone will creatively utilize these digital video platforms to their full potential.

Low Cost Smartphone Shipments to Reach 788 Million

2013-05-02T06:28:00.000-05:00

In many parts of the world, smartphone shipments account for a significantly larger percentage of mobile handset volume than feature phones and other low-cost handsets.

Yet within the smartphone class of devices, segmentation is increasing to three price tiers -- low, mid, and high.

Shipments of sub-$250 lower-cost smartphones will grow from 259 million in 2013 to 788 million in 2018, according to the latest global market study by ABI Research.

Mid (sub-$400) and high ($400+) cost smartphone shipments are expected to grow from 635 million to 925 million over the same period.

"As the feature phone segment continues to lose its battle for relevance, the low-cost smartphone has become the tool for operators seeking to drive increased data revenues," said Michael Morgan, senior analyst at ABI Research.

The growth of smartphones in pre-paid and emerging markets will be the primary driver of low-cost smartphone growth.

Developed and subsidized markets are also finding that low-cost smartphones can capture the remaining consumers that have yet to convert to a smartphone while minimizing the margin impacts stemming from subsidizing high-cost smartphones.

Mid- and high-cost smartphones will continue to play an important role for operators looking to seed their customer base with the most advanced smartphones.

Premium smartphones tend to carry the most advanced wireless connectivity and operators who are upgrading their network want to ensure that the handsets running on their network can deliver the best possible experience and customer satisfaction.

"As smartphone penetration moves from early adopters to mass-market and laggard consumer segments, the smartphone as a product will be less dependent on technical superiority, and more dependent on reliability and value," adds ABI senior practice director, Jeff Orr.

Mobile Service Providers Invest in LTE Infrastructure

2013-05-01T06:33:00.000-05:00

The spending on Long-Term Evolution (LTE) mobile network base stations will reach $12.3 billion in 2013, as service providers around the world update their infrastructure to fourth-generation wireless technology.

Membership is not exclusive to the developed economies as emerging markets close the digital divide by aggressive network roll-out.

Some of these emerging market LTE deployments are government-sponsored initiatives, as in Rwanda, while others are private ventures, as in Sri Lanka.

4G LTE has helped to reverse the downward trend in RAN expenditure in Western Europe last year and will do the same in Eastern Europe, Latin America, and Middle East in 2013 and Africa in 2014.

"There are, however, differences in the type of capital expenditure (CapEx) incurred in different regions," said Ying Kang Tan, research associate at ABI Research.

Operators in the developed markets are already taking steps to upgrade their networks to LTE-Advanced this year.

Going forward, amidst skyrocketing data traffic, they will also invest a larger proportion of their RAN spend on LTE small cells, which will yield significant savings on CapEx in addition to increased capacity for wireless operators.

Besides tangible infrastructure, intangible LTE spectrum licenses also have cost operators dearly. For example, the 4G mobile spectrum license acquired by France’s SFR constituted 38.9 percent of its CapEx last year.

Mobile carrier CapEx can be quite lumpy. 2013 will see a sharp reduction in China Mobile’s 3G investments in TD-SCDMA. In other markets, 3G equipment spend has already declined.

4G equipment spend is taking up some of the slack but there will still be a 6.0 percent drop this year. 2014 should see rising wireless investment as 4G deployment and capacity build-up gain momentum.

Advanced Driver Assistance Systems Market Upside

2013-04-30T06:40:00.000-05:00

Advanced Driver Assistance Systems, or ADAS, are technology-based solutions designed to help the vehicle operator. At the end of 2012, the global market for ADAS was estimated to be $16.6 billion.

According to the latest market study by ABI Research, they now forecast that the ADAS market will increase to more than $261 billion by the end of 2020 -- representing a CAGR of 41 percent.

"ADAS systems are increasingly being offered by mass-market OEMs such as Ford and Volkswagen," said Gareth Owen, research analyst at ABI Research.

While the majority are offered in bundles and sold as optional driver-assist packages, a growing number of OEMs are starting to fit some ADAS systems as standard equipment.

ADAS is also becoming more sophisticated. For instance, in May 2013 Volvo will start offering a system that can stop a vehicle if a pedestrian or cyclist is in its immediate path.

A key catalyst driving the adoption of ADAS systems in Europe over the next five years will be the Euro NCAP specifications.

The specifications include three types of ADAS systems: Speed Assistance Systems (SAS), Autonomous Emergency Braking (AEB), and Lane Departure Warning/Lane Keep Assist (LDW/LKA).

According to Owen, the specifications also include detailed phase-in fitment requirements.

For example, SAS becomes part of NCAP as early as 2013 and OEMs will need to ensure that 50 percent of any new model production is fitted with SAS in order to score points.

By 2017, however, it is likely that all three ADAS systems will be required to be fitted as standard in all new models in order to qualify for the highest safety rating.

Similar trends can be observed globally although other regions such as North America and Asia-Pacific are expected to lag Europe by 1-3 years.

In the United States, the National Highway Transportation Safety Administration (NHTSA) is expected to mandate Collision Imminent Braking (CIB) which is similar to AEB.

ADAS should also benefit from cost reductions in key components during the next 4-5 years, for example, radar sensors, which will act as an additional adoption driver.

In the commercial vehicle sector, LDW and AEB will be mandated in November 2013 in Europe. A similar mandate is expected to be passed in the United States within the next 12-24 months.

Mobile Streamed Music Revenue to Reach $1.7 Billion

2013-04-29T07:07:00.000-05:00

Across a variety of formats, music is undoubtedly the most mature segment of mobile entertainment. The global revenues from streamed music services on mobile devices are expected to rise by more than 40 percent to $1.7 billion, according to the latest market study by Juniper Research.

For the first time, these revenues will thereby overtake those generated by full-track downloads to mobile devices.

The study observed that growth in premium service adoption was increasingly being driven by mobile network operator partnerships with service providers. In Europe, several operators have seen an uplift in spend amongst the mobile users, notably TeliaSonera in Sweden, which bundles Spotify with TV, mobile and fixed line services.

Furthermore, such services are also gaining traction in Germany, where O2 offers simfy and T‑Mobile has recently introduced Spotify.

However, the most significant growth has come in the U.S. market, which is poised to overtake South Korea this year as the leading market for mobile streamed music services.

Meanwhile, the study found that leading OTT (Over the Top) players were poised to challenge players such as Pandora and Spotify for supremacy in the streamed music space.

"Historically, companies such as Apple, Google and Amazon have primarily focused on cloud music from a storage perspective; as a remote locker for downloaded tracks," said Dr Windsor Holden, research director at Juniper Research.

Juniper believes that Apple's iRadio service is likely to bring significant pressure to bear on the existing streaming music service providers -- and prompt competing offerings from the other major OTT companies.

However, the monetization of streamed music services was still being severely impacted by digital piracy -- even in markets which have imposed blocking orders on leading torrent sites, the overall rate of torrent traffic has continued to increase.

Other key findings from the market study include:

Mobile music services are increasingly context driven and are increasingly evolving social aspects such as sharing, activity feeds and follow options.
Revenues from legacy services such as ring tones and ring-back tones will continue to decline sharply, with ring tones in Western Europe now worth just 2 percent of their peak value.

Researching the Digital Ecosystem in Latin America

2013-04-26T07:30:00.000-05:00

AHCIET and Ovum launched the Observatory of Telecoms Indicators in Latin America. Its objective is to measure and analyze the digital ecosystem as well as identify and quantify the socioeconomic contribution of the telecoms industry to the growth and welfare of the Latin American economy.

In its first study, the AHCIET-Ovum Observatory concludes that telecoms services have increased their impact in Latin America.

Not only have they become increasingly present in the daily lives of millions of Latin Americans who communicate and work using new access technologies; they are also expanding their influence and contribution to the economic development of the countries in the region.

The telecoms sector has had a significant impact on national economies in Latin America between 2008 and 2011, generating growth in fixed (72%) and mobile (41%) Internet connections. At the same time, entry-level tariffs have fallen substantially, enabling new users to join the information society.

Jobs created by the telecommunications industry in Latin America grew significantly. The number of workers employed by telecoms operators has increased by nearly 60 percent, reaching a level close to a quarter of a million workers. The number of workers in the sector has more than doubled in Brazil and Nicaragua, and almost doubled in Guatemala.

Meanwhile, capital investment by telecoms companies has increased by more than 28 percent as telcos focus on the deployment of access infrastructure to meet demand for services and digital inclusion.

Although the global recession that emerged in 2008 forced many companies to moderate their levels of spending in 2009, growing demand for fixed and mobile broadband has fueled continued strong investment. Capital expenditure by telecoms companies in eight countries included in the Observatory grew by an average of 28 percent to more than $22 trillion in 2011.

This increased contribution of telecoms to national economies is helping to bridge the digital divide.

The Observatory provides analysis of regional and national growth trends, investment and industry financials and covers 15 countries in Latin America over the four year period from 2008 to 2011. It will periodically deliver reliable and relevant indicators for governments, regulators, enterprises, international organizations and academia.

Richard Mahony, telecoms research director at Ovum, said "The Observatory is a valuable resource as it provides the industry with the most detailed picture of the evolving Latin America telecoms market. We look forward to further co-operation with AHCIET as the partnership supports Ovum’s ongoing research on the development of telecoms in the region."

Exploring the Upside for Wearable Computing Devices

2013-04-25T07:27:00.000-05:00

Smart Watches have been around for the last decade. But this wearable computing device has failed to take off for one reason or another. They were unattractive, too bulky, had weak functionality, or the battery life was too limited for extended use.

However, over the last nine months a number of new smart watches have emerged that could change consumer perceptions about the value of these devices.

Moreover, demand is developing in the marketplace. According to the latest market study by ABI Research, more than 1.2 million smart watches will be shipped in 2013.

"The strong potential emergence of smart watches can be attributed to several reasons," said Joshua Flood, senior analyst at ABI Research.

Contributing factors include the high penetration of smartphones in many world markets, the wide availability and low cost of MEMS sensors, energy efficient connectivity technologies such as Bluetooth 4.0, and a flourishing software app ecosystem.

The wearable computing device can be split into four categories: notification types, voice operational smart watches, hybrid smart watches, and completely independent smart watches.

Notification type devices are the MetaWatch and Cookoo smart watches, for example, offering alerts for incoming calls, messages and other notifications. Voice operational smart watches enable users to conduct calls and speak some commands via the device such as Martian’s smart watch.

Standalone smart watches with their own OS are moving beyond a smartphone accessory. With the potential to be purchased as a standalone product without the need for a smartphone, they offer high functionality and can connect to other consumer devices like audio speakers.

A good example is the Italian smart watch maker, I’m Watch. Other good possible archetypes for this category could be Apple’s hotly anticipated iWatch, Samsung’s Galaxy Altius and Microsoft is also reportedly planning to release a new touch-enabled watch for its Windows-based smartphones and tablets.

"Smart watches that replicate the functionality of a mobile handset or smartphone are not yet commercially feasible, though the technologies are certainly being prepared," adds Flood.

How Quad-Core Processors Transform Mobile Design

2013-04-24T07:08:00.000-05:00

Mobile device design is increasingly reliant upon integrated platforms -- which are semiconductor chipsets based on combinations of application processor, baseband processor, and wireless connectivity technologies.

In 2012, 19 percent of mobile handsets shipped were based on an integrated platform -- which is forecast to more than double to 46 percent in 2018.

"Integrated solutions are used in many handsets from mass-market smartphones to flagship smartphones and will eventually find their way into feature phones," said Philip Solis, research director at ABI Research.

One industry dynamic mitigating the need for integrated platforms are device reference designs and related services that are being offered by some of the semiconductor vendors.

Qualcomm certainly benefits from its integrated platform products as it offers a large number of them with different features.

Currently, only Qualcomm integrates wireless connectivity into its products, and is the only vendor offering integrated solutions including application processors, baseband processors, and wireless connectivity.

ABI Research expects other mobile device component suppliers to eventually catch up, with Intel and Broadcom looking the most significant competitors.

In 2012, 80 percent of handsets shipped were based on a single-core processor. This will flip by 2018 with 92 percent of handsets using a dual-core or higher application processor. This includes quad-core processors consisting of 4 cores or 4.4 cores.

In 2018, over one billion smartphones will ship with quad-core processors.

Also, in 2012, 12 percent of mobile handsets included 4G LTE. This will increase to 35 percent of all handsets, with a small percentage of these being singlemode LTE.

Naturally, all of these changes are much more pronounced in smartphones -- with the feature phone market seeing these trends later even as feature phones give way to smartphones.

150 Million Tablets are Forecast to Ship in 2013

2013-04-23T06:20:00.000-05:00

The convenience and mobility benefits afforded by media tablets are very apparent, given the results from record unit shipments and revenues that were reported by vendors in 2012.

In 2013, approximately 150 million tablets (up by 38 percent year-over-year) are forecast to ship globally worth an estimated $64 billion (up by 28 percent from 2012) in potential end-user revenues, according to the latest market study by ABI Research.

So far, Apple has reigned since the introduction of its iPad in 2010, though Samsung and others continue to erode its early success.

About 60 percent of the 2012 tablet shipments used Apple’s iOS operating system software, while 37 percent were based on Google’s Android OS (or development forks of Android, such as found on Amazon’s Kindle Fire).

The remaining 3 percent OS share consisted of Windows (Windows 7, 8, or RT), BlackBerry Tablet OS, and unidentified OS implementations.

"The tide is definitely turning toward Android-based tablets, though Apple will not slouch as it feels the competition approaching," said Jeff Orr, senior practice director at ABI Research.

The iPad mini was a timely introduction in 2012, though ABI Research remains cautious about the bottom line impact this is having for Apple.

The first quarter of 2013 should be the first time where production was able to meet market demand and a better sense of how much 9.7” iPad volume has switched to the smaller, lower-cost mini will be understood.

The next opportunity is for a vendor challenger to break away from the pack and move closer to Apple. Most would consider Samsung the likely pursuer, though the company was mired in legal proceedings during much of 2012.

The success Samsung has attained during the past year with smartphones and the Galaxy Note II is expected to migrate across to their tablet products in 2013. ABI believes that a well-executed Samsung tablet strategy could easily double the company’s market share this year.

Unfortunately, there are few fast-followers capable of emulating the technology that Samsung has developed, suggesting that more innovation is necessary for the other tablet manufacturers to gain market share.

Forecasting the Ongoing Decline of the PC Market

2013-04-22T08:04:00.000-05:00

Worldwide PC shipments totaled 76.3 million units in the first quarter of 2013 (1Q13), that's down by -13.9 percent compared to the same quarter in 2012, according to the latest market study by International Data Corporation (IDC).

To put this decline in perspective, this market performance was the worst since IDC began tracking the PC market quarterly in 1994. The results also marked the fourth consecutive quarter of year-on-year shipment declines.

Despite some mild improvement in the economic environment and some new PC models offering the troubled Microsoft Windows 8 operating system, PC shipments were down significantly across all regions -- when compared to a year ago.

Fading mini notebook PC shipments have taken a big chunk out of the low-end market while tablets and smartphones continue to divert consumer spending.

PC industry efforts to offer touch capabilities and ultra-slim systems have been hampered by traditional barriers of price and component supply, as well as a weak reception for Windows 8.

The PC industry is struggling to identify innovations that differentiate PCs from other products and inspire consumers to buy, and instead is meeting significant resistance to changes perceived as cumbersome or costly.

"At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," said Bob O'Donnell, Vice President at IDC.

Microsoft will have to make some very tough decisions moving forward -- if it wants to help reinvigorate the PC market. Meanwhile Intel can no longer afford to hope that the current situation improves.

IDC believes that the impact of slow demand has been magnified by the ongoing restructuring and reorganizing efforts impacting HP and Dell -- two key players that have clearly lost momentum.

Lenovo remains a notable exception as it continues to execute on a solid attack strategy. Mid- and bottom-tier vendors are also struggling to identify growth markets within the U.S.

Among the most vulnerable group of vendors are the whitebox PC system builders, which are undergoing consolidation that is affecting shipments as well as the distribution sector.

In summary, the PC industry is now at a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer.

If you doubt the severity of the situation, then just consider the results in the U.S. market.

It had yet another dismal quarter in 1Q13 -- contracting -12.7 percent year on year -- with a drop of -18.3 percent compared to the fourth quarter of 2012. With total volume falling to 14.2 million, quarterly shipments reached their lowest level since the first quarter of 2006.

With this latest figure, the U.S. is now in its tenth consecutive quarter of year-on-year contraction (excluding a brief moment of growth – less than 2 percent year on year – in 3Q11).

It's difficult to forecast a forward-looking upside, given this backdrop. But perhaps there's opportunity for the surviving vendors -- who could still rejuvenate the PC form factor. Is a PC industry recovery likely to be the outcome? Only time will tell.

Over the Top Video Revenue to Exceed $20B by 2015

2013-04-19T07:42:00.001-05:00

According to the latest market study by ABI Research, American companies like Netflix, Hulu, Apple and Amazon helped to drive the over-the-top (OTT) video entertainment market past $8 billion in 2012.

The three largest markets -- North America, Europe, and Asia-Pacific experienced year-over-year growth in excess of 50 percent in 2012.

The continued spread of connected consumer electronics (CE) and increasingly mobile devices -- such as media tablets -- are expected to push the market past $20 billion by 2015.

"The shift to digital and OTT distribution is accelerating, particularly as content providers increasingly warm up to these channels," Michael Inouye, senior analyst at ABI Research.

While traditional pay-TV services are still afforded many advantages, now it's the content owners who will decide if they continue down the same path or forge ahead -- disrupting the primary means of legacy media distribution.

The dynamics around revenue generation continue to change and currently vary by region. Asa an example, subscriptions are more significant in North America than they are in Europe or Asia-Pacific regions.

In time, however, ABI says that they expect a greater diffusion of revenue across the various business models. For instance, in 2012 58 percent of OTT video revenue came from subscription service, but ABI anticipates this share to fall to less than 32 percent by 2018.

In large part this movement is driven by a continual shift in consumer demand towards newer forms of digital content distribution. When people have a choice, they will drive change in the marketplace.

"While we still see great value and strength in the pay-TV sector we are also starting to see the pieces that will accelerate change fall into place," added practice director, Sam Rosen.

Whether it's Netflix expanding to international markets, or the ABC and CBS TV networks enhancing catch-up services, the building blocks that will restructure the how, when, and where consumers view content are starting to give shape to a new media landscape.

This future, however, isn't devoid of traditional media nor is it a matter of new channels necessarily winning, but rather a redistribution of wealth within the overall value chain.

Mobile Data Off-load Driven by a Series of Trends

2013-04-18T04:43:00.000-05:00

Juniper Research forecasts that the amount of mobile data traffic generated by smartphones, featurephones and tablets will exceed 90,000 petabytes by 2017 -- that's the equivalent to almost 42 quadrillion tweets or approximately 7 billion blu-ray HD movies.

However, the latest market study from Juniper also finds that only 40 percent of the data generated by these devices will reach the cellular network by 2017.

It's now anticipated that the majority of the mobile data traffic will be carried via a Wi-Fi broadband network connection.

Juniper's new report finds that despite 2012 being a breakthrough year for 4G LTE networks, mobile service providers will still need traffic off-loading technologies -- such as Wi-Fi and small cells -- to augment 4G networks.

"The trend will continue and operators will make use of more integrated units of Wi-Fi and small cells," said Nitin Bhas,senior analyst at Juniper Research.

In the case of indoor cells, where most usage happens, operators effectively have Wi-Fi as the pioneer and are in many ways the leader in this area. Small cells are indeed becoming a part of the equation.

The new report also finds that mobile network operators are beginning to build out networks based on public access small cells and that has had a big effect on the offload ecosystem.

The demand for high bandwidth services from end users and the availability of Wi-Fi on most mobile devices have forced the operators to address consumer expectations around quality and experience, while also creating new opportunities.

Juniper identifies a series of trends that are coming together to greatly accelerate carrier-Wi-Fi adoption, mainly NGH (Next Generation Hotspot) and Hotspot 2.0 specifications along with 5GHz enabled devices.

Carrier-grade small cells along with Wi-Fi will enable high levels of capacity and along with the macro network will provide commercial and financial success to the operator.

Other key findings from the market study include:

Notebook PCs and eReaders will on-load over 20 percent of their data traffic to the mobile networks in 2013.
North America and Western Europe will have the highest off-load factor throughout the forecast period.

American Mobile Advertising will Reach $7B in 2013

2013-04-17T07:38:00.000-05:00

A new group of publishers are rapidly taking over the mobile display advertising market in the United States. Where in past years, advertising networks -- such as Google, Millennial Media, and Apple -- received most of the spending on mobile display ads, now individual publishers control the segment.

Facebook, Pandora, Twitter, and The Weather Channel all registered strong sales in 2012 -- most of them started from zero sales in 2011.

Publishers controlled 52 percent of U.S. mobile display ad spending in 2012 -- that's compared to the 39 percent they received in 2011, according to the latest market study by International Data Corporation (IDC).

"Mobile ad networks are losing market share to publishers, and we expect them to lose even more going forward," said Karsten Weide, Vice President of Media & Entertainment at IDC.

Networks, especially independent ones, are entering a difficult phase, in which, with an ever smaller share of revenue, they'll have to compete with publishers, which will only grow in strength.

Additional findings from the IDC study include:

Strong growth in mobile advertising spending in the United States continues, even if annual growth rates continue to decline: the market grew by 88 percent in 2012 (down from 125 percent in 2011) to a total of $4.5 billion (up from $2.4 billion in 2011).
Mobile market share within all digital advertising reached 11 percent in 2012, up from 7 percent in 2011. For 2013, IDC expects a growth rate of 55–65 percent, with spending coming in around $7 billion, for the United States.
Mobile display advertising has increased its market share of total mobile spending by no less than 8 percentage points to 39 percent, versus 61 percent for search ads, in 2012. Mobile display ads attracted $1.7 billion in 2012 compared with $0.7 billion in 2011. Growth rates have picked up again in 2012 after a dip in 2011. They were at 134 percent in 2010, 118 percent in 2011, and 132 percent in 2012.
Among mobile publishers selling display advertising, Facebook was the number 1 company in 2012 ($234 million gross revenue), followed by Pandora ($229 million) with Twitter coming in third ($117 million). In the ad network segment, not much has changed. Google still holds the top spot ($243 million). One change is that Millennial Media ($151 million) has taken over Apple ($125 million) to claim the number 2 spot. Jumptap remains number 4 ($90 million).
Marketers spent $2.8 billion in 2012 on mobile search ads, compared with $1.6 billion in 2011 and $0.7 billion in 2010. Growth rates have slowed significantly, down from 195 percent in 2010 to 127 percent in 2011 to 68 percent in 2012. Google still dominates the market with gross revenue of $2,166 million, and a gross market share of 79 percent.

How HTML5 is Gaining Momentum on Mobile Devices

2013-04-16T05:48:00.000-05:00

Mobile devices with HTML5-compatible browsers will total 1.4 billion in 2013, following an annual increase of 87 percent, according to the latest market study by ABI Research.

Although the installed base of this size represents a very potent market for mobile application developers, in practice the vast majority of them continue to choose the native app model over the web for their releases.

"While some two years ago it still looked like 2013 could be the Year of Web App, it’s now looking like that this will prove more like the Year of Hybrid" said Aapo Markkanen, senior analyst at ABI Research.

HTML5 is making strides, but mainly through developers that take advantage of increasingly capable cross-platform development tools.

Meanwhile, there aren’t many signs of full-blown web apps effectively challenging the native way.

However, ABI believes that two parallel trends will help the web to catch up further.

First, it’s expected that the support for HTML5 features and browsers will be gradually baked deeper into operating systems, making the web apps speedier and more responsive.

This will be partially driven by the upcoming wave of open-source platforms -- such as Firefox OS, Sailfish, Tizen, and Ubuntu -- but at the end of the day the most significant factor may turn out to be Android’s eventual convergence with Chrome.

Second, there are the hardware vendors.

"There’s a lot of scope to achieve a more robust HTML5 support already in the chip level," says Markkanen. "Especially Intel has lately displayed strategic interest in pushing the envelope here."

Also Samsung’s collaboration with Mozilla to develop a whole new browser engine, dubbed Servo, is worth following. A truly ground-up mobile browser could certainly ease the bottleneck that currently holds back the mobile web.

Consumer Robots Market will Reach $6.5B in 2017

2013-04-15T07:06:00.000-05:00

Will 2013 be the year that robots make their mark in mainstream society? The growing market for consumer robots has already reached $1.6 billion in 2012, which is dominated by the task and entertainment segments.

According to the latest market study by ABI Research, it will grow to $6.5 billion in 2017 and will still be dominated by the same segments, with security and telepresence becoming more of a significant third segment.

iRobot is still the main player, but more Asian-based companies are coming out with competing products and newer products like window-cleaning robots.

"We are seeing more personal robot R&D from Western companies and more task robot development from Asian companies," said Philip Solis, research director at ABI Research.

That's an apparent reversal of past development trends.

Application processors and the array of sensors used in smartphones and media tablets have achieved great economies of scale for components that consumer robotics will leverage.

The market for processors, micro-controllers, sensors, and physical components including actuators, servos, and manipulators was a little over $700 million in 2012 and will grow by five times that amount by 2017.

The semiconductor portion of that amount is well over a third and will grow as products become more complex and capable.

While the market for consumer robots is trudging ahead and growing, the lingering stagnant global economy has suppressed its market potential. There are also some safety concerns holding back the market, such as the additional cost of diverse redundancy for sensors.

"What happens if a robot falls down the stairs while someone is walking up, or gets caught on a lamp power cord and pulls the lamp down and starts a fire?" added Solis. "This is a gating factor to take-up of more complex personal robots – solvable but with additional cost."

Additionally, the applications and business models for more general personal robots needs to be worked out. Home elder-care is being targeted first for insurance- and retirement income-related potential.