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  • VoIP Investment Remains Strong, IP Line Penetration Rose to 40% in Q3

    According to the recent Canalys report on IP telephony, investment in enterprise telephony remained restricted in EMEA in Q3 2009, with call control line shipments down 17.5% compared with the same period in 2008.

    The research shows volume declined 21.5% in Q1, while Q2 was down 18.6%. In total, 4.8 million lines were shipped in the quarter, a 4.4% sequential increase. IP line penetration increased to 40%, up from 35% one year earlier, as businesses continued to replace aging TDM infrastructure and expand trial projects.

    Canalys claims aggressive cash-back, fixed price, minimum spend and competitor trade-in promotions, as well as 0% financing offers have helped prevent greater reductions in shipments during 2009.

    Alcatel-Lucent, Siemens and Aastra continue to lead in EMEA, with Cisco gaining ground.

    ‘Alcatel-Lucent has been a stable performer in the region over the last eight quarters, overtaking Siemens as the market leader in 2008,’ said Alex Smith, a Research Analyst at Canalys.

    ‘During the recession, it has managed to maintain its market share, though its Q3 shipments were hit by the holiday season in its core markets, particularly France, Spain and Italy,’ Smith added.

    Siemens remained the second largest vendor with a market share of 13.5%, though this has steadily eroded over the last two years. Overall, Siemens is continuing to invest in growing its indirect business, but shifting direct accounts to the channel will take time, according to Canalys.

    In September, it announced plans to accelerate this process by selling its direct sales organisations in 27 non-core countries to Netlink, a deal worth €204 million ($308 million), more than the original €175 million ($275 million) the Gores Group paid Siemens AG for its 51% stake in the overall business.

    Aastra was the third largest vendor in the region, with a market share of 13.0%. During the quarter, Aastra benefited from competitor cash-back trade-in promotions in France, while investment in direct-touch activities helped it improve its German business, finds the report.

    Cisco continued to grow its market share during the recession, primarily driven by gains in Western Europe, particularly in Germany where it has invested heavily in marketing and sales resources. It accounted for 11.6% of total shipments, compared with 11.2% in Q2 and 10.3% in Q3 2008.

    Avaya, which grew its shipments by 4.2% over Q2 with strong sales in the UK, catalysed by the release of IP Office R5, won the auction for the Nortel Enterprise business. Canalys says new entity has the potential to emerge as the leading vendor in EMEA.

    ‘Shipments for the final quarter of 2009, typically the largest in EMEA, are expected to grow sequentially but will still be down annually as many businesses set budgets earlier in the year when economic conditions were worse. Year-on-year growth is expected to resume in 2010, though volumes will still be lower than in 2008 as economic recovery is expected to be slow after the worst recession for decades,’ said Matthew Ball, a Senior Analyst at Canalys.

  • IDC: EMC Led The Overall Storage Software Market in Q3

    According to IDC’s Worldwide Quarterly Storage Software Tracker, the worldwide storage software market experienced another decline in year-over-year growth in the third quarter of 2009 with revenues of $2.87 billion, representing –7.9% growth over the same quarter one year ago, but a 1.2% growth from the previous quarter.

    IDC report shows EMC led the overall market with 23.4% revenue share in the third quarter of 2009. Symantec held onto the second position with 17.8% revenue share, while IBM finished in the third position with 12.2% revenue share.

    NetApp finished in the fourth position with 7.6% revenue share while CA rounded out the top 5 with 3.9 revenue share.

    For the second quarter in a row, only two of the top 5 vendors displayed a positive growth over the previous quarter. EMC and IBM displayed positive growth rates of 5.7%, and 6.9% respectively, while Symantec, NetApp, and CA each had negative growth rates from the previous quarter of –2.1%, –8.9%, and –3% respectively.

    “Two out of the top three vendors in the data protection and recovery market grew sequentially (IBM and EMC) while the leader Symantec declined at 1.2%,” said Michael Margossian, research analyst, Storage Software at IDC.

    Symantec is still the market leader with 31.1% market share, and IBM and EMC having 14.1% and 12.8% market share respectively.

    EMC regain the top spot in the replication market, with 10.7% growth over 2Q09, while NetApp declined 10.1%.

    “The storage software market was barely able to maintain a positive sequential growth rate in the third quarter of 2009,” concluded Margossian.

  • Research: Bringing Cloud into the Datacenter Transformation

    “Datacenter transformation is a stark reality facing most customers in the Asia/Pacific region,” says IDC.

    Based on its recent datacenter research, the ageing and somewhat inefficient datacenters that were built seven-ten years ago are struggling to keep up with the current technology – leading to high operational costs, poor utilization levels and increasing complexity.

    “However – the report says – the current economic environment has led many CxOs to mandate CAPEX restrictions, which has forced CIOs to look for ways they can do more with the same.”

    Datacenter transformation is a broader discussion than cost and capacity, and one which aims at building an IT architecture that is more agile and adaptive for the business. IDC states that this need is driven by the increasing pervasiveness of IT, which is driving businesses to use the same or even more IT than before- even when the IT budgets are not expanding.

    “This has caused a dilemma for the CIO, and they are forced to think about new ways to build their IT fabric such that its more elastic, flexible and agile,” the company says.

    IDC says it has discussed this type of IT within the scope of what we called as the dynamic IT infrastructure.

    However, transforming the current IT complexities to reduce the rigidity has been an arduous task for most IT heads, and one that they have continued to battle with over the past few years. The arrival of cloud computing has revived the hopes of CIOs to consider a new way of attacking this old problem, as IDC claims.

    IDC believes that over the next few years, we will see increasing interest in cloud computing from organizations. But these organizations will have to start planning on building a more dynamic IT framework as a precursor.

    According to the research, this is especially true for enterprises that are considering to build their own private or internal clouds. The current chaotic IT environment with its complexities and redundancies will pose a huge challenge in migration, and indeed this has left many CIOs stumped about where to even start.

    "There is a lot of pent-up demand for revamping and building new datacenters that have been postponed due to the ongoing recession" says Avneesh Saxena, Group Vice President for Domain Research at IDC Asia/Pacific.

    "Meanwhile the demand for IT has not gone down and CIOs worry about coping with the turnaround as and when it comes through. This has to lead to the emergence of a adaptive and elastic IT framework – whether inside or outside the organization," he added.

  • Intel and Numonyx Announce a Breakthrough in PCM Technology

    Intel and Numonyx, a provider of memory technologies, announced a key breakthrough in the research of phase change memory (PCM), a new non-volatile memory technology that combines many of the benefits of today’s various memory types.

    For the first time, researchers have demonstrated a 64Mb test chip that enables the ability to stack, or place, multiple layers of PCM arrays within a single die.

    These findings pave the way for building memory devices with greater capacity, lower power consumption and optimal space savings for random access non-volatile memory and storage applications, the companies announced.

    The achievements are a result of an ongoing joint research program between Numonyx and Intel that has been focusing on the exploration of multi-layered or stacked PCM cell arrays.

    Intel and Numonyx say their researchers are now able to demonstrate a vertically integrated memory cell – called PCMS (phase change memory and switch). PCMS is comprised of one PCM element layered with a newly used Ovonic Threshold Switch (OTS) in a true cross point array.

    The ability to layer or stack arrays of PCMS provides the scalability to higher memory densities while maintaining the performance characteristics of PCM, a challenge that is becoming increasingly more difficult to maintain with traditional memory technologies.

    Memory cells are built by stacking a storage element and a selector, with several cells creating memory arrays. Intel and Numonyx researchers were able to deploy a thin film, two-terminal OTS as the selector, matching the physical and electrical properties for PCM scaling.

    With the compatibility of thin-film PCMS, multiple layers of cross point memory arrays are now possible. Once integrated together and embedded in a true cross point array, layered arrays are combined with CMOS circuits for decoding, sensing and logic functions.

    "We are encouraged by this research milestone and see future memory technologies, such as PCMS, as critical for extending the role of memory in computing solutions and in expanding the capabilities for performance and memory scaling," said Al Fazio, Intel Fellow and director, memory technology development.

    Greg Atwood, senior technology fellow at Numonyx, added that the results show the potential for higher density, scalable arrays and NAND-like usage models for PCM products in the future.

    “This is important as traditional flash memory technologies face certain physical limits and reliability issues, yet demand for memory continues to rise in everything from mobile phones to data centers" he said.

    To provide more information about the memory cell, cross point array, experiment and results, Intel and Numonyx will publish a joint paper titled "A Stackable Cross Point Phase Change Memory,” which will be presented at the 2009 International Electron Devices Meeting in Baltimore on Dec. 9.

  • iSuppli Reports Strong DRAM Market Growth

    The DRAM industry in the second and third quarters of 2009 posted the strongest sequential growth in revenue and pricing seen in at least five years, indicating that the recent market rebound is real and is likely to continue into 2010, according to iSuppli.

    Global DRAM revenue rose by 35 percent in the third quarter compared to the second quarter, according to a preliminary estimate from iSuppli. This follows a 34 percent increase in the second quarter.

    The revenue rise in the second quarter brought an end to a three-quarter losing streak that began in the third quarter of 2008. Revenue had fallen by 19 percent in the first quarter of 2009, plunged by 38 percent in the fourth quarter of 2008 and decreased by a moderate 1 percent in the third quarter of 2008.

    Meanwhile, global DRAM Average Selling Prices (ASPs) rose by 21 percent in the third quarter compared to the second, following a 19 percent rise in the second quarter.

    Pricing declined by 10 percent in the first quarter of 2009. The second quarter marked the first sequential increase in DRAM pricing since the fourth quarter of 2006.

    “Third-quarter results from major suppliers show that the DRAM industry recovery is no mirage,” said Mike Howard, senior analyst, DRAM, for iSuppli.

    “The continued increase in prices comes as another indicator that the DRAM market is emerging from what has been a long and painful slump.”

    iSuppli says the global DRAM market has been declining on an annual basis since 2007. Revenue decreased by 7.5 percent in 2007 and plunged by 25.1 percent in 2008.

    Despite the strong recovery in the second and third quarters, extremely weak conditions in the first quarter mean that global DRAM market revenue is set to decrease by 12.9 percent in 2009, according to the company’s preliminary estimate.

    The market’s strong performance in the second and third quarters likely presage continued strength in the DRAM market.

    “Third-quarter earnings from Samsung, Micron and the Taiwanese DRAM manufacturers point to increasing sales and further progress toward profitability,” Howard said.

    “Samsung achieved profitability during the third quarter, while Micron’s results indicate the company is on its way back to the black. Recent sales results from the Taiwanese DRAM companies are also positive for DRAM. Collectively, the five Taiwanese DRAM suppliers—Inotera, Nanya, Powerchip, ProMOS and Winbond—saw monthly revenues increase rise by 15 percent per month for the last three months.”

    iSuppli expects supply levels to remain fairly consistent in the fourth quarter. DRAM demand is expected to improve in 2010 in concert with the general global economic recovery.

  • Research Forecasts Flat Panel Display Industry Slowdown in Q4, Recovery in 2010

    According to the latest DisplaySearch Quarterly Worldwide FPD Forecast Report, global flat panel display revenues for 2009 will be $87.6B, down 15% Y/Y from 2008.

    The major reason for the decline is erosion in large-area TFT LCD panel prices compared to 2008, despite the fact that the TFT LCD market started to recover in Q2’09.

    Despite the gloomy forecasted results for 2009, the market is expected to recover in 2010 with a 5% compound annual growth rate and revenues of $93.3B, the research shows.

    According to David Hsieh, vice president of DisplaySearch, 2009 represents a “drastic change” for the whole FPD industry.

    “The industry faced many critical challenges in the end of 2008 due to the global economic recession and the resulting drop in demand. However, as the market demand began to recover in early 2009 and the global economic situation is expected to continue to improve, we believe that the worst time for the industry has passed and the FPD market will experience growth after 2009,” he said.

    a-Si TFT LCD continues to be the largest segment in all FPD technologies. However, AMOLED shows the strongest compound annual growth rate, 179% from 2008 to 2012, as suppliers solve technical and financial problems.

    DisplaySearch says there are currently eight drivers for FPD growth in the next ten years: new applications and markets, new entrants and processes, new concepts and specifications, as well as new business and practices.

    Many of these are inspired by the downturn in the FPD industry in late 2008 and early 2009, which stimulated the FPD industry to find different strategies, markets and solutions.

    Other research from iSuppli says small and medium LCD suppliers are preparing for a Q4 slowdown.

    “Small/medium display panel vendors are prepping for what they believe will be a deceleration in demand in the fourth quarter – traditionally a slower period because of the end of the holiday buying rush,” says iSuppli.

    Furthermore, Tier-1 OEMs in the third quarter pulled in orders for the holiday season and the Chinese Golden Week. This allowed panel suppliers to achieve 93 percent of their third-quarter 2008 shipment levels in the first two months of the third quarter of 2009 alone.

    iSuppli analyst Vinita Jakhanwal claims suppliers are planning to reduce capacity utilization in anticipation, but the decline in capacity will allow the industry to better manage price declines.

  • What Do Consumers Do With Their Phones?

    A recent Canalys consumer study, which surveyed over 3.000 people across France, Germany and theUK, looked at what features consumers are using on their phones.

    The first conclusion is that the use of data services is limited outside of smart phone owners and that customers on SIM-only contracts consume more data than their pre-paid counterparts. “The results go some way to quashing the expectations that SIMonly customers will only use voice and text,” says Canalys.

    When comparing the usage habits of respondents with pre-paid contracts versus those with SIM-only contracts, usage was higher in every category for individuals with SIM-only packages.

    For example, 27% of SIM-only users regularly browsed web sites on their handsets compared with just 14% of pre-paid users. Equally, the number of customers accessing social networking services on their mobile phones was considerably higher among SIM-only users (16%) when compared with pre-paid users (7%). The use of e-mail was also greater among those who subscribed to SIM-only deals (23%) versus consumers on pre-paid tariffs (16%).

    According to Canalys, operators will hope that the uptake of data services will steadily increase across their subscriber bases. “The major challenge that operators face is ensuring there is a sufficient penetration of handsets that are capable of accessing connected services, a questionable factor, especially looking at the difference in usage between handset brands across data services,” the report says.

    The other conclusion is that social networking on mobile phones remains a relatively small, but growing service. The research shows that despite the large usage figures quoted by companies such as Facebook, usage of social networking in the mass market remains limited.

    Only 10% of end users regularly accessed this type of service from their mobile phones. iPhone users were by far the most active, with almost half regularly accessing social networking services. Figures for BlackBerry (27%) and HTC (23%) users were lower than those for Apple, but were still significantly above the average.

    “These results show that usage of social networking services is higher among smart phone users, and as the market leader in the smart phone market, it is fair to assume that usage on Nokia’s flagship products would be similar. Usage of social networking services across all of its products, however, was only 7%,” says Canalys.

    When looking at e-mail usage on mobile phones, BlackBerry owners were the most active with 68% regularly using e-mail on their handsets. Owners of handsets from Apple (67%) and HTC (53%) also used e-mail far more regularly than those who owned handsets from the leading vendors, where on average only 15% of end users were regularly using e-mail on their phones.

    Web site browsing also revealed contrasting usage patterns: 73% of iPhone users regularly browsed web sites on their handsets; 60% of BlackBerry owners and 56% of HTC owners had similar habits.

    Conversely, just 8% of Motorola owners regularly browsed web sites on their phones and, though web browsing was higher on phones from LG (18%), Samsung (17%), Nokia (16%) and Sony Ericsson (16%), it was still significantly below that of iPhone users.

    Navigation services were cited by 36% of end users as a feature that they wanted on their next mobile phone that they did not have today. The majority of respondents were keen to have an in-car turn-by-turn solution on their next phone.

    “But as many navigation solution providers are now discovering, it is not good enough just to supply the software. For in-car navigation to be successful on mobile phones the experience of portable navigation devices (PNDs) needs to be matched or exceeded. This means that car kits or cradles need to be supplied alongside the software at the time of purchase. In addition, events such as incoming calls and other alerts need to be handled in a way that provides minimal disruption to the navigation experience,” analysts conclude.

  • Large-Sized LCD Panel Business Becomes Profitable Again

    After a year of losing money or generating zero return, the global large-sized (10” or larger) LCD panel business returned to profitability in the third quarter, according to iSuppli’s latest research.

    In an example of market trends, the 32-inch HDTV LCD, which is the most popular dimension for large-sized panels, generated a 13 percent profit for the LCD industry in the third quarter. In contrast, the 32-inch panel incurred losses of 12 percent in the second quarter of 2009, 31 percent in the first quarter of 2009 and 23 percent in the fourth quarter of 2008.

    The last time the LCD industry cut a profit on 32-inch HDTV panels was in the second quarter of 2008, when they generated a 19 percent return.

    Analysts say the main reason LCD panels have not been profitable for so long is the market’s extreme state of oversupply, which resulted in LCD panel pricing that was below manufacturing costs. However, reductions in production and utilization rates, combined with better-than-expected panel demand from China’s television market, helped spur the return to profitability in the third quarter.

    A shortage of glass used to make LCD panels also contributed to the tightness of the panel market during the third quarter, further boosting prices and profits.

    Worldwide shipments of large-sized LCD panels amounted to 148.3 million units in the third quarter, up 14.3 percent from the second quarter of 2009, and up 28.9 percent from the third quarter of 2008. iSuppli expects to revise this estimate as more companies report third-quarter results.

    LG Display was the world’s largest seller of large-sized LCD panels in the second quarter of 2009, accounting for 25.3 percent of shipments. This put LG just slightly ahead of chief rival, Samsung, which had a 24.6 percent share. Preliminary indications show LG and Samsung were engaged in a tight battle for the market’s No.-1 position during the period.

    iSuppli predicts that rising fab utilization rates and decreased panel demand following the Christmas purchasing season will drive the large-sized LCD panel market to oversupply in the fourth quarter of 2009, conforming with normal seasonal patterns. However, the reductions in prices and shipments are expected to be only moderate compared to those of a year earlier, in the fourth quarter of 2008.

    Many panel suppliers, having just returned to profitability, are maintaining tight control of their inventories and have little motivation to cut pricing drastically at this time, according to the research.

  • Blu-ray Won’t Replace DVD as the Primary Drive for PCs

    Despite a rapid rise in the sales of consumer Blu-ray players, a fall in their prices and an increase in the number of high-definition movie titles, Blu-ray drives in PC systems have been left singing the blues, according to iSuppli.

    iSuppli’s recent report says that by 2013, Blu-ray drives will be found in only 16.3 percent of PCs shipped, up from 3.6 percent in 2009.

    “BDs won’t be replacing DVDs as the primary optical drive in PC systems through at least the year 2013,” said Michael Yang, senior analyst for storage and mobile memory at iSuppli.

    “They eventually will find success, but during the next five years, that success will be limited in the PC segment.

    According to Yang, the two main reasons hampering the adoption of Blu-ray drives in PCs include costs as well as the lack of a library of movies that justifies the need for consumers to move to a different drive in their PCs.

    Cost, Yang said, is the primary impediment. Given the high price of the product, consumers are unwilling to pay the extra money in order to obtain a high-definition drive. “The cost issue is amplified by the fact that the library of content is so small that there really isn’t a reason for users to switch at the moment,” Yang added.

    And while this is changing and studios are rolling out more Blu-ray content every week, there remains a long way to go.

    A tertiary factor worth mentioning is the difficulty of supplanting an incumbent storage medium in PCs—a distinction currently held by the DVD-RW drive.

    “From a historical perspective, each of the successful storage media in PCs has gained popularity only when content became available and when consumers actually understood that what they were getting was easy to use and worth the cost,” the report says.

    For instance, the once-ubiquitous 3.5-inch floppy drive had a lifespan of 15-plus years, surviving well past its prime. Eventually, it was replaced by CD-ROMs—which, in turn, gave way to DVD drives.

    A changeover occurred and the floppy disk finally supplanted when it became apparent that CD-ROMs not only offered a distinct advantage but were also the medium being adopted by everything from music to games to movies.

    Such a pivotal moment, Yang said, has not yet arrived for the Blu-ray drive. “It’s undeniable that Blu-ray delivers a higher-definition picture, better sound quality and larger storage space for home entertainment,” he remarked.

    “However, these benefits may have little or no value when viewing the content on a smaller desktop or laptop PC screen and using poor speakers.”

    Until BD costs decline and user knowledge increases, the technology will continue to struggle – the report concludes. 

  • Feature Phones Still Rule the U.S. Market

    According to The NPD Group, a market research company, when it comes to sales of mobile phones in the U.S. feature phones still rule the market, even as smartphone sales continue to increase their share of overall handset sales.

    NPD’s Mobile Phone Track information reveals that unit-sales of new feature phones fell 5 percentage points to 72 percent of new handset sales in the Q2 2009, while sales of new smartphones reached 28 percent of overall consumer purchases – a 47 percent increase in the category’s share since last year.

    Overall handset sales volume in the U.S. grew 14 percent year over year in Q2 2009, as sales revenue increased 18 percent. The average selling price of all mobile phones increased 4 percent year over year – reaching $87 in Q2.

    According to NPD’s Q2 2009 ranking of handsets, the LG enV2 and Samsung Rant led feature phone sales, while Apple iPhone 3G and RIM Blackberry Curve were the top-selling smartphones.

    “Despite their ties to pricey data plans, the rich Internet access capabilities of smartphones are attracting consumers wooed by lower device prices,” said Ross Rubin, director of industry analysis at The NPD Group.

    The research shows that Wi-Fi capability increased three-fold since last year, with 20 percent of all new handsets equipped with this capability.

    Touch screens on both feature phones and smartphones have also seen tremendous growth since last year, with 26 percent of all new handsets purchased in Q2 including this feature. Physical QWERTY keyboards, by comparison, were available in 35 percent of handsets sold.

    “Feature phones are taking on more of the physical characteristics of smartphones, and often offer greater exposure to carrier services.With the price gap between smartphones and feature phones narrowing, to remain competitive feature phones need to develop a better Web experience, drive utility via widgets, and sidestep the applications arms race,” Rubin said.

    NPD Group compiles and analyzes mobile device sales data based on more than 150,000 completed online consumer research surveys each month. Surveys are based on a nationally balanced and demographically representative sample, and results are projected to represent the entire population of U.S. consumers.