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  • Wireless Infrastructure Spending to Rise in 2011 as 4G Deployment Starts

    Following two years of declining expenditures, global capital spending on wireless infrastructure equipment is set to return to growth in 2011 as carriers in the developed world start deploying next-generation 4G networks, according to iSuppli.

    The research group says that capital spending on wireless infrastructure throughout the world is projected to reach $40.3 billion in 2011, up 6.7 percent from $37.8 billion in 2010.

    This will reverse the downward trend that first occurred in 2009 and is expected to continue this year. Expenditures dipped 5.7 percent in 2009, and in 2010 will tumble by an additional 2.3 percent to $37.8 billion.

    “The upturn in 2011 signals renewed commitment within the wireless industry to move on expansion plans that had been delayed or put on hold because of the global recession,” said Dr. Jagdish Rebello, senior director and principal analyst for wireless research at iSuppli. “Starting in 2011, wireless carriers in industrialized countries will start to deploy 4G in order to attain faster speeds and to unclog the heavy data traffic generated by the exploding use of smart phones. This 4G-driven growth in capital spending will continue at least through 2014.”

    According to iSuppli, carriers the developed world in 2011 will start to deploy 4G, with most expected to choose Long Term Evolution (LTE). Over the next decade, LTE will become the dominant technology, while WiMAX will be relegated to the status of a niche 4G technology, iSuppli believes.

    Already, a number of wireless carriers have announced support for LTE, including NTT DoCoMo and KDDI in Japan, as well as Vodafone and Orange in Europe. In the United States, Verizon Wireless has announced it will roll out LTE by the end of this year, with AT&T and T-Mobile expected to follow suit in 2011.

    Overall, carriers will work to establish viable business models to achieve greater revenue growth in light of the capital expenditures needed for network upgrades, iSuppli believes. This means that in all likelihood, carriers launching 4G will implement tiered pricing plans based on data access rates. As a result, data traffic in access networks will be prioritized, and customers will be required to pay higher access fees when using high-bandwidth services like mobile video or peer-to-peer mobile video gaming.

    Rebello notes that while wireless carriers in Japan, the United States and Western Europe contemplate launching 4G services in 2011, their counterparts in the developing world will continue to invest in 3G network enhancements.

    "For Latin America, China, India and the rest of the developing world—where wireless penetration has yet to extend to many rural areas—4G is not considered a feasible proposition at this point. Instead, carriers will focus on expanding the geographical coverage of their networks, or seek network-sharing agreements with infrastructure providers to help reduce total capital outlay," Rebello siad.

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  • Consumer LBS Market – a Multi-Billion Dollar Opportunity

    New analysis from Frost & Sullivan , 2010 North American Consumer Location-based Services (LBS) Market – The Wireless Carrier Opportunity, finds that the wireless carrier-generated segment of the North American consumer LBS market amounted to on-deck application software revenues of approximately $718 million in 2009 and forecasts this to reach $1.58 billion in 2015.

    The consumer location-based services sector has experienced tremendous change during the past eighteen months, forcing North American wireless carriers to cope with a vastly different competitive landscape.

    According to the research group, carrier dominance in the North American consumer LBS sector, which was carefully developed during the past decade, is now being directly assaulted by smartphone application storefronts and free off-deck solutions.

    The analysts think that wireless carriers must become more creative and aggressive in leveraging their unique assets if they want to successfully carve out and keep a significant portion of this sector’s potential revenue. Powerful technology and greater customer awareness are driving the consumer LBS market and providing even more opportunities for carriers to partner with top-tier application developers and create, launch, and promote new LBS solutions.

    "In tandem with smartphone advances, carriers are making their networks and locationing capability more accessible to LBS application developers," said Frost & Sullivan Senior Industry Analyst Jeanine Sterling. "Partnerships with location aggregators, open application programming interface (API) platforms, and simpler, quicker certification reviews make it easier for LBS developers to stake a claim to the market."

    However, new monetization models and higher channel fragmentation encourage smartphone users, in particular, to bypass wireless carriers and download LBS solutions directly from the phone’s application store. The majority of location-based applications available through smartphone storefronts are free or available for a one-time fee. In such an environment, carriers will have to strategize cleverly to justify their monthly subscription model. They will also have to find ways to appeal to a smartphone user population that is quickly growing in terms of size and demands.

    According to Sterling, wireless carriers have to bring a strong marketing sensibility to the consumer LBS sector. Their gatekeeper role and control over products and partners have disappeared in the smartphone sector and has been weakened with feature phone users. Carriers need to decide where they can compete successfully in this sector.

    "Some LBS solutions – such as the kid finder services – are just an automatic and perfect fit. Other applications and capabilities may not be as obvious. To thrive in this market, carriers have to be real marketers – monitoring customer needs, identifying product voids, working with creative partners, and publicizing the distinct benefits that carriers bring to today’s mobile user," advises Sterling.

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  • Blu-ray Player Shipments to Exceed 62.5 Million in 2011

    Worldwide Blu-ray player shipments are expected to more than double between 2009 and the end of 2010, and the numbers from ABI Research forecast continued growth next year, for a total of more than 62.5 million shipments in 2011.

    In North America standalone Blu-ray players are expected to reach almost 18% penetration among TV-owning households, up from just over 7% in 2009.

    As interesting as this estimate is, it is just part of a larger picture. According to industry analyst Mike Inouye, “The solid growth in Blu-ray player shipments highlights a trend within the wider consumer electronics market. Larger, fixed-location devices such as Blu-ray players and flat panel TVs are enjoying rapid adoption relative to many classes of small, portable devices. Specifically, portable gaming devices are leveling out, while we are seeing actual declines in shipments of portable audio players. Digital picture frames are showing only mild growth, and compact digital camera shipments are declining in North America and Japan, though they continue modest growth elsewhere.”

    What is behind these shifts? “In addition to price declines, the greater growth potential of TV-centric devices may be due to some of the recent exciting innovations in TV technologies: larger, flatter panels, Internet connectivity, and 3D,” says Inouye. “Aside from the economic/job environment it could be that dedicated portable device markets are simply maturing, or it could be due to the greater competition they face from smartphones and other multi-function portable devices.”

    ABI Research believes that CE device vendors can improve their chances of success in this very competitive marketplace by, on one hand, continuing efforts to educate consumers about what they can do with the latest devices, and on the other by striving to keep the user-experience as seamless and painless as possible.

  • iSuppli: Facebook Plans New Mobile Strategy

    Facebook is set to move beyond its mobile application strategy as it plans to become a stand-alone mobile platform, which developers can distribute mobile apps with, says iSuppli.

    Already a leader in non-mobile web applications, Facebook offers more than 550,000 applications and supports 1m developers. According to the research group, the social network’s aim is to offer something similar on mobile (most third-party Facebook apps are not currently available on mobile).

    Facebook’s mobile growth remains strong. It now counts more than 150m active mobile users (out of more than 400m total users), compared with 100m in February 2010.

    “Mobile will continue to play a key role in growing Facebook’s overall user base. In May 2010, it launched Facebook 0, a text only version of the social network aimed at mobile users in developing countries with lower-end phones and limited access to mobile data. Facebook has deals with more than 60 network operators in 50 developing countries to provide the service for free,” said iSuppli analyst Jack Kent.

    According to him, while Facebook will likely remain the leading social network on mobile, a number of new players will force it to innovate. Foursquare, the location-based mobile social network that offers a gaming element and check-in functionality, is most prevalent of these new entrants. While Foursquare‘s 2m user base is tiny compared to Facebook, its implementation of location specific data is likely to be similar to Facebook’s forthcoming local features.

    “Facebook’s drive towards creating its own mobile platform may cause a headache for developers who will be forced to develop for another set of APIs (application program interfaces) in the already fragmented mobile sector. The prospect of tapping into a 500m-strong social graph could however prove enticing for many, as is already the case for many websites that integrate Facebook’s APIs,” said Kent.

    He thinks that having previously focused on developing native applications for mobile operating systems (including Apple’s iOS and Google’s Android), Facebook’s new strategy will likely focus on mobile web based applications that give it greater control over its ecosystem and the user experience it provides.

    “For Facebook, offering its own platform for mobile web applications will help drive its core advertising and microtransaction business models. It will be able to serve ads and gain revenues from its Facebook Credits virtual currency, outside the realm of other mobile ad-networks and mobile application stores,” concluded the iSuppli analyst.

  • Consumer Interest in Smartphones Catapulted to Unprecedented Levels

    ChangeWave‘s latest smart phone survey of 4,028 consumers shows an explosive transformation occurring in consumer demand – resulting in some major new winners and losers for second half 2010.

    The survey – completed June 24th – took a close-up look at consumer demand for the new Apple iPhone 4 and the HTC Droid Incredible, along with the impact these and other offerings are having on the rest of the smart phone industry.

    According to the report, consumer smart phone planned buying going forward is at an all-time high for a ChangeWave survey – with 16.4% of respondents in their latest survey saying they plan on buying a smart phone in the next 90 days.

    ChangeWave note that overall buying plans going forward are significantly higher than they were a year ago at the start of the iPhone 3GS release.

    Smart Phone Market Share

    At the individual manufacturers’ level, the survey findings show a major leap forward for Apple and HTC at the expense of RIM and Motorola.

    In terms of current share, Apple (34%) is up 1-pt since our March survey to an all-time high while RIM (34%) has taken another hit – dropping 4-pts in the past 90 days.

    According to ChangeWave, Android phones continue to have a major impact on the market, with HTC (8%; up 2-pts) and its new Droid Incredible and EVO models the biggest beneficiary. Motorola (6%), who in recent surveys had registered a wave of new demand for their Droid model, remains unchanged in the current survey.

    “But it’s when we look at future buying plans that the huge moves upward for Apple and HTC become most apparent. The new Apple iPhone 4 is driving much of the industry’s growth going forward, with more than one-in-two (52%) respondents who plan to buy a smart phone in the next 90 days saying they’ll get an Apple iPhone – an explosive 21-pt leap over our previous survey,” say the survey authors.

    HTC (19%) also shows a huge improvement going forward – registering a 7-pt jump in terms of future buying plans. On the other hand, Motorola (9%) has declined 7-pts since previously.

    The analysts say that the biggest loser of all in the current survey is RIM (6%), which has registered an 8-pt drop to its lowest level ever in a ChangeWave survey.

    Palm has also been buried in the wave of momentum for Apple and HTC. For the first time in a ChangeWave survey, Palm is registering less than 1% of planned smart phone purchases going forward.

    “The combined momentum of these latest Apple and HTC offerings has catapulted consumer interest in smart phones to unprecedented levels – with consumer planned buying now at an all-time high for a ChangeWave survey,” as the report says.

    “Importantly, the momentum for Apple and HTC is occurring at the expense of other smart phone manufacturers – Motorola and Research in Motion in particular,” the analysts conclude.

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  • IDC: Mobile Banking Usage Nearly Doubled Since Last Year

    IDC has released a new report, 2009 Consumer Mobile Banking Preferences Survey Results – Waiting for Takeoff, that reveals that mobile banking has seen an increase in usage and in institutions offering the service in the last year. In fact, reported mobile banking usage has almost doubled since last year’s survey.

    However, according to the survey, while mobile banking may have finally turned the corner with customer acceptance, it is not a mainstream channel and in order to be successful, financial institutions need to be strategic about their mobile offerings.

    In addition, realistic expectations, an understanding that there are few to no revenue opportunities around mobile currently, and the backing of senior management, are all key to mobile success.

    According to the report, the challenge with mobile banking continues to be that it introduces a new cost structure without providing opportunities for revenue. Consumers have become accustomed to having more for free, and the convenience of mobile banking so far does not appear to be something that people are willing to pay for.

    However, enhancements to mobile platforms – including the addition of adding deposit capture and payment solutions – will provide more opportunities for financial institutions to potentially gain some revenue opportunities.

    IDC recommends that financial institutions begin expanding what they offer, marketing these offerings as easier to use, and providing more opportunities around payments and fund movement. Financial institutions that can capitalize on this will be better positioned to both obtain and retain customers.

    Key findings include:
    • Usage was up across all channels, requiring bankers to manage more transactions across an ever-expanding portfolio of delivery options.
    • The financial services industry should leverage its branch network to compete against potential nontraditional entrants that lack the brick-and-mortar infrastructure.
    • SMS is the most popular form of mobile banking.
    • Customized alerts and payments outside of network are gaining in popularity, while check image view and getting rate information on the mobile device appear to be fading.
    • Demographics for mobile banking customers were skewed toward a younger male audience, but all demographics are showing usage.

    "Consumers are transaction and information happy, and the branch continues to be as popular as ever," said Marc DeCastro, Research Manager, Consumer Banking and Credit, IDC Financial Insights.

    "The financial services industry recognizes the importance and advantage it has with its brick-and-mortar branch networks, evidenced by continued branch investment. Our survey, however, shows that consumers are getting more and more comfortable opening accounts outside of the branch. While many financial institutions have jumped into the mobile banking space and are offering solutions, some are still pondering their entrance. Those that have already installed a solution may also be looking at modifications or enhancements to their first-generation rollouts."

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  • CDW-G Releases 2010 Government Virtualization Report

    CDW-G has released its 2010 Government Virtualization Report, an assessment of client, server and storage virtualization in Federal, state and local agencies.

    The report, based on a May survey of 600 Federal, state and local IT managers, reveals that 77 percent of agencies are implementing at least one form of virtualization, and of those, 89 percent are benefiting from the technology.

    Benefits of virtualization, a broad term used to describe the abstraction of computer resources, include reduced operating and capital costs, improved utilization of computing resources and greater IT staff productivity, respondents said.

    Despite those benefits – and imperatives such as the Federal data center consolidation initiative – 81 percent of all agencies said they are not using virtualization to its fullest extent, and just 33 percent employ a “virtualization first” strategy, meaning that a requestor must prove that a new software application does not work in a virtualized environment before the agency will buy a dedicated server to support it.

    According to the report, across government, agencies cited lack of staff and budget as top impediments to further virtualization adoption. Nearly half said their IT department is not appropriately staffed and trained to manage a virtual environment. Despite those challenges, most agencies said they will fully implement client, server and storage virtualization by 2015.

    “The cost savings associated with virtualization are exceptionally compelling in the current budget environment,” said David Hutchins, director of state and local sales for CDW-G. “We see many state and local governments starting with a pilot project, and once tangible cost and time savings are achieved, redeploying those resources to other priority initiatives – including additional virtualization, which reaps still more savings.”

    Most Agencies Implementing; Security Concerns Decline

    CDW-G’s survey found that 91 percent of agencies are considering or implementing server virtualization, a method of running multiple independent server operating systems on a single physical server. Eighty-four percent are considering or implementing client virtualization, a method of running multiple desktops and/or applications centrally in the data center, and an equal number are considering or implementing storage virtualization, a method of making many different physical storage networks and devices appear as one entity for purposes of management and administration.

    Security concerns about virtualization, the No. 2 barrier to Federal implementation, according to CDW-G’s 2009 Federal Virtualization Report, declined significantly within that group year over year. Today, Federal IT professionals rank security No. 7 among their top barriers, after concerns such as staff knowledge, budget and staff availability. State and local IT professionals in 2010 ranked security No. 8 among their top barriers, after concerns such as budget and staff availability. Across government, nearly half of IT managers report that security is actually a benefit of virtualization, CDW-G found.

    “Security is a critical consideration with any change to agency IT environments, and rightly so,” said Andy Lausch, vice president of federal sales for CDW-G. “As agencies grow their virtualization expertise, many are finding that security is actually improved with virtualization. A centralized IT environment means managers have fewer machines to monitor and manage, which can improve the agency’s overall security posture.”

    Virtualization Not One-Size Fits All; CIO Savvy Essential to Success

    While most government IT professionals are implementing or considering virtualization, respondents caution that the technique is not a one-size-fits all solution. Forty-six percent said some applications should not run on virtualized servers, for example. One respondent noted, “Some applications require such intensive resources, the cost benefit is outweighed.”

    Echoing CDW-G’s 2009 survey on Federal virtualization, respondents again said CIO virtualization proficiency is critical to successful implementation. Agencies whose IT staffs gave their CIOs an “A” for virtualization proficiency were three times more likely to experience a successful virtualization deployment than agencies with C-rated CIOs. Further, 87 percent of agencies that gave their CIO an “A” in virtualization proficiency said their IT department is appropriately staffed and trained to support a virtualized environment.

    Government IT professionals offered the following advice to their peers:
    • Lead: Secure non-IT leadership support and ensure adequate end-user education
    • Analyze: Conduct cost-benefit and performance analyses and set benchmarks for evaluating ROI
    • Plan: Audit current IT environments to determine areas that can immediately benefit from virtualization and areas that will require additional planning
    • Implement: Begin with a small-scale implementation. Apply lessons learned to a subsequent deployment

  • Number of Worldwide Mobile Payment Users to Reach 108.6 Million in 2010

    The number of mobile payment users worldwide will exceed 108.6 million in 2010, a 54.5 percent increase from 2009, when there were 70.2 million users, according to Gartner. Mobile payment users will represent 2.1 percent of all mobile users in 2010.

    Gartner report "Market Insight: The Outlook on Mobile Payment" finds that Asia/Pacific is the leading region with mobile payment users. In Asia/Pacific, mobile payment users will surpass 62.8 million in 2010, and represent 2.6 percent of all mobile users.

    In Europe, the Middle East and Africa (EMEA), mobile payment users will total 27.1 million and represent 2.1 percent of all mobile users in the region. In North America, mobile payment users will number 3.5 million and represent 1.1 percent of all mobile users in the region.

    "We continue to see strong growth in developing markets in Asia, Eastern Europe, the Middle East and Africa for mobile payment, while adoption in North America and Western Europe lags behind due to the plentiful choices of payment instruments that consumers have," said Sandy Shen, research director at Gartner. "Developing markets have found the right formula for mobile money services — functions that users want and an ecosystem that can sustain the service."

    Shen said that the strong demand for mobile payment in developing markets is being driven by the unbanked and underbanked populations that do not have ready access to the banking infrastructure or PC, positioning mobile as the natural choice of access platform. “At the same time, regulators in early-adopter markets are tightening up policies to provide better user protection and fight against unlawful financial activities relating to money transfer,” she said.

    The report also shows that Short Message Service (SMS) remains the dominant mobile payment technology. Its ubiquity and ease of use makes it the technology of choice, not only for consumers in developing markets, but also for those in developed markets. Wireless Application Protocol/Web can support either downloadable clients or mobile browsers. It is more frequently used by consumers in developed markets due to the higher penetration of data-capable phones and active data plans.

    According to Gartner, many financial institutions have failed to see the business case of Near Field Communication (NFC) payment, in particular, which offers similar functionality to contactless cards but with the added complexity of dealing with mobile carriers and other ecosystem partners.

    Shen urged service providers in developing markets to investigate service interoperability to speed market uptake and foster healthy competition. She said that solution providers should ensure platform flexibility so that platforms can work with both the bank’s and mobile carrier’s systems, and so that it can be readily customized for local deployments.

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  • Juniper Research: Mobile VoIP Users to Exceed 100 Million by 2012

    A new study from Juniper Research has found that Mobile VoIP services will develop significantly faster in developed markets due to the direct correlation between 3G roll outs and the take up of mobile VoIP.

    This is the case even though mVoIP traffic volumes may eventually be higher in developing markets due in part to the calling patterns of migrant workers, according to the study.

    “By 2012 we expect significant uptake of mobile VoIP in its various different flavours”, says Anthony Cox, Senior Analyst at Juniper Research.

    “By that date mobile VoIP will be available over both 3G and WiFi networks. We also anticipate that several more traditional operators will have joined 3UK and Verizon in the US and developed relationships with mobile VoIP players such as Skype,” he says.

    The report finds that alliances between mobile VoIP players and traditional operators may provide the best option for today’s incumbent operators to address the advent of mobile VoIP.

    Another finding says that revenues from the circuit switched voice market will continue to diminish over the next five years, although this will not accelerate.

    According to the analysts, a high percentage of Mobile VoIP carried over applications will be via WiFi networks, bypassing operators’ networks altogether. Such traffic will result in some lost revenues, amounting to around $5bn by 2015.

    The research firm also anticipate that by 2012 over half of mobile VoIP users will reside in North America and Europe.

  • iPhone 4 Sounds Starting Gun for Smartphone Gyroscope Market

    Monday’s introduction of the iPhone 4 is set to trigger explosive growth in the market for gyroscopes used in cell phones, as a flood of competitors vie to emulate the feature, says iSuppli.

    According to the research group, global unit shipments of gyroscopes in mobile handsets are expected to rise to 285 million in 2014, up from 26 million in 2010 and from zero in 2009.

    The integration of the gyroscope in the iPhone 4, which is set to begin shipping on June 24, confirms iSuppli’s forecast that these parts would make their first appearance in smart phones this summer.

    “Because of Apple’s role as a technology trendsetter, a multitude of mobile handset OEMs are expected to offer smart phones that integrate gyroscopes,” said Jérémie Bouchaud, director and principal analyst, Microelectromechanical Systems, for iSuppli. “This will cause shipments to rise by 157 percent in 2011 and by 60 percent in 2012 and 2013.”

    Mobile handset makers until recently have shown little interest in gyroscopes, Bouchaud noted. However, the success of the Nintendo Wii Motion Plus video game console demonstrated the consumer appeal of gyroscopes for game playing. Meanwhile, InvenSense and STMicroelectronics have offered a cascade of new gyroscopes with 2 and 3 axes, making the technology more accessible.

    “STMicroelectronics is the sole supplier of accelerometers for previous models of the iPhone, as well as for the iPad and the iPod line,” Bouchaud said.

    “Because of this, we believe that STMicroelectronics is also the supplier of the gyroscope in the iPhone 4. However, we will have to wait for confirmation from iSuppli’s Teardown Analysis Service when it dissects the iPhone 4 in late June.”

    According to the analysts, the main applications for gyroscopes in cell phones in 2010 and 2011 will comprise a user interface utilizing a gyroscope in combination with an accelerometer, followed by image stabilization and dead-reckoning for in-vehicle navigation.

    From 2012, gyroscopes will start to be used for indoor navigation in combination with an accelerometer, compass and pressure sensor for floor accuracy. By 2014, the market for gyroscopes in cell phones is expected to amount to $220 million.

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