Category: Industry Trends

Mobile Phone Market Set to Rocket – 600 Million Phones Sold This Year?

Gartner are predicting healthy business for the worldwide mobile phone market this year, since 153 million unites were sold win the first quarter of 2004, up 34% on the same period last year.

“Another record quarter of mobile phone sales resulted from an Asia/Pacific market buoyed by purchases for the Chinese New Year, healthy growth in emerging markets and surprising numbers of people in mature markets choosing to upgrade their phones,” said Ben Wood, principal analyst for mobile terminals research at Gartner. “Based on first quarter results, we believe worldwide mobile phone sales will exceed 600 million units in 2004.”

The top five phone vendors (Nokia, Motorola, Samsung, Siemens and Sony Ericsson) all saw increases this year, though Nokia lost 5.7% of its market share. Nokia’s bad news is possibly attributable to a less than dazzling range of products this year and a number of network operators in Western Europe sourcing their phones from the Finnish company’s competitors.

Mobile phone sales in North America grew 30%, with customers opting for colour displays and integrated cameras, demonstrating that America is catching up with Europe both in percentage penetration and the sophistication of the handsets available.

Gartner

DirectTV Sells TiVo Stake. TiVo Reacts with Updates

Trouble at TiVo this week – DirectTV, controlled by News Corp, has sold its 55% equity stake in the PVR company. TiVo still has a contract to supply DirectTV with PVRs until February 2007, but news of the sale caused the company’s shares to drop 14.5%.

The news comes only a few days after DirectTV vice chairman Eddy Hartenstein resigned from TiVo’s board. These two events have cause others to speculate that DirectTV may wish to bring in a new PVR supplier, such as NDS.

DirectTV is TiVo’s biggest source of subscribers, a dependence that was causing concern to observers.

As more manufacturers continue to launch PVR product lines, TiVo’s subscription model is making less sense to consumers: why pay a US$12.95 (€10.74) monthly fee for a programme guide? However, by offering features not found on other PVRs such as home networking, TiVo expects to exceed 10 million subscribers by 2008 – though figures stood at just 1.6 million at the beginning of May this year.

TiVo’s home networking, now a free add-on, allows subscribers to use their television to display photographs, and to stream music to their stereo systems. The feature works on wired and wireless networks by connecting a network adapter to the USB port on the TiVo Series 2 box.

TiVo have also announced that they are working to expand this functionality so that films and music downloaded to a PC from the internet, can be played back on televisions and stereos.

Nikon have just partnered with TiVo to showcase professional photography on subscribers’ televisions through Nikon’s Legends Behind the Lens promotion. Also, purchasers of some CoolPix digital cameras will be able to use PictureProject software to upload images to their TiVo box.

DirectTV

TiVo

NikonNet

BT Trialling Fibre to the Home

Quick – move to Martlesham Heath, Suffolk. 1,500 businesses and residents in three UK locations, Suffolk, Milton Keynes and Docklands are to take part in a one year trial of fibre optic broadband connections, running to September 2005.

The properties will be linked directly to BT exchanges by glass fibre, upgrading connections to an end-to-end internet protocol network – something that’s go to come to the entire country sooner or later.

Paul Reynolds, BT wholesale chief executive has stated that BT will not go out and replace all of the copper wires in the country if the trial is a success: only new building developments will have fibre installed. “At this stage we don’t envisage a widespread deployment of fibre to the premises or the cabinet in the near or medium term,” i.e. it would be hideously expensive. “While we believe the use of fibre can help deliver better operating costs in terms of maintenance, we need to balance this against the cost of installation and systems developments. These trials will help to shape our thinking and help us make strategic investment decisions.”

BT have also announced a five year plan to replace the old switched network to properly carry voice and data services, with migrations beginning in 2006.

BT announce their timetable

IFPI: Illegal Music Files Down 25%

The International Federation of the Phonographic Industry has reported a few pieces of good news for the industry.

Firstly, the IFPI are claiming that the number of illegal, copyright infringing music files on the internet is down 800 million files – down from a peak of 1.1 billion files this time last year. Now, you know as well as I do that there is now way of measuring the numbers of anything on the internet, especially music files – but we’re pleased that they believe that the problem is getting better, not worse.

Any drop in infringing files can no doubt be attributed to the 100 or so legal music services that have popped up in the last couple of years. It’s as we’ve said all along: people don’t want an illegal copy of a track when they can have a properly encoded, licensed file from an official source.

Secondly, they are pleased to report that seven out of ten Europeans know that file sharing is illegal. To help raise awareness, the music industry sent 23 million instant message warnings to people using P2P services in 9 countries.

Interestingly, 45% of those surveyed in Italy said that “they expected to stop over the next three months” — implying that they were either waiting for music services to start up, or they were finding it difficult to kick the habit.

Registered users at music services in Europe now stands at 830,000 people – up from 380,000 at the end of September.

Prosecutions are still taking place amid all the improvements – 24 more cases were rolled out, and the IFPI says that several hundred more cases are planned for the coming months.

IFPI

US On-line Gaming: US$4 Billion by 2008

Online gaming is growing rapidly. Even miserable old souls like me who can’t stand wizards, Wookies and the thought of being thrashed at Counter Strike by some smug 14 year old whose reflexes are yet to be destroyed by years of gin have signed up for the odd Massively Multilayer Online Roleplaying Game (MMORPG).

A new report from In-Stat/MDR makes some striking claims about the growth of the US market – they estimate it will expand from a measly US$1 billion (€818 million) to a much more lucrative US$4 billion (€3.27 billion) by 2008. Much of this income will come from in-game advertising.

Aside from the growing awareness and acceptability of online gaming, the report states that falling costs will spur growth – when online gaming costs as much as watching television, then it’ll really take off.

The report claims that online gaming costs about US$1 per hour, opposed to US$0.13 for watching TV. I thought the US$1/h figure was a little high, so decided to run my own numbers: a quick calculation shows that my 16 hours of Eve per week sets me back about €0.18 (US$0.21) per hour. I’m not factoring in my broadband connection costs there, because I use that for other things. Honest. Given that many online game players can easily rack up 40 hours a week plus, then cost per hour on a monthly subscription can often fall below €0.07 (US$0.09). But then, they have no friends.

Advertising in games is, as previously reported here, growing alongside the MMORPG field. In-Stat/MDR senior analyst Eric Mantion. States: “The secret strength of online games will be when the volumes of people playing grow to the point where advertisers will start buying ads that will not only be interactive, but also targeted at specific demographics of players.”

In-Stat/MDR hypothesise that half the US population will be playing online games by 2008, which is somewhat optimistic. My own finger in the air guess is about 25%, taking age of population, literacy and competition from less interactive entertainment into account.

Buy Quafe Ultra!

In-Stat/MDR’s report

BT to Use Technology to Block Child Pornography

BT have reported to the Home Office that trials of their Cleanfeed (not connected with the Cleanfeed company who offer internet filtering software, coincidentally enough) program have proved successful, and from next month they will be blocking access to child pornography sites.

The move has been applauded by children’s charities, with other internet service providers looking to adopt a similar strategy.

Internet Watch Foundation’s register of illegal sites has been around for a while to warn authorities, but technology and the fact that most of the sites are outside the UK has meant that, up until now at least, no real action has been taken.

The ban is an initiative of John Carr, internet adviser to NCH who prompted Home Office minister Paul Goggins after Carr’s successful campaign to block offending internet usenet groups. Goggins approached ISPs, including BT, for an answer.

This move from BT is sure to be a relief for many people, but at the same time poses free speech concerns: the UK is now the first Western country to impose mass censorship of the internet.

Pierre Danon, chief executive of BT Retail, said in a statement: “You are always caught between the desire to tackle child pornography and freedom of information. But I was fed up with not acting on this and always being told that it was technically impossible.”

The NCH’s guide to child safety on the internet

Microsoft’s New Patent on Clicking

Microsoft have a new patent, relating to launching applications on PDAs. The patent describes launching different programs according to how many times a hardware button is pressed, for example one press for Contacts, twice for Calendar, three times for Hover Bovver.

If you still have a digital watch, it’s exactly the same technique you use every six months when the clocks change and you have to remember how to set the damn thing. Thankfully, this MS patent only applies to hardware buttons on PDAs running Microsoft’s PocketPC operating system.

The irony is not lost on Digital Lifestyles, as we reported last week that Microsoft have just joined a group whose very existence to is prevent obstructive patents and overhaul the US Patent and Trademark Office, renowned for issuing daft patents. We’re also reminded of our very own BT’s claim on owning the patent on hyperlinks.

Microsoft’s patent and licensing programme

BT’s hyperlink patent

Amazon’s New Preview Jukebox

Amazon's new jukebox featureAmazon.com have quietly rolled out a nifty new music preview feature, allowing much more convenient previews than before. The site’s erstwhile preview system was always a bit hit and miss, lacking in some obvious functions, but the new system, comprising of a pop-up box control panel with more than a whiff of iTunes about it is much better and demonstrates that it’s not just the better download sites that allow you to try before you buy.

The new feature makes it mush easier to browse music samples and discover artists and tracks that you might like, with all the pertinent information and links near at hand. Tracks from albums are queued up and played in order, so you can get a feel for a whole albums without having to budge.

The Preview section has been reorganised, with the new Amazon Music Sampler coming first – clicking on a link opens up the preview window. Customers can now jump between albums by the same artists, or even samples of recommendations and top sellers, from the same window. For convenience, the Add to Basket button is never too far away.

Samples are streamed to your PC without firing up an external media player, and most samples are 20Kps quality-wise.

Try it out

Federal Trade Commission Wants to Get Tough on Bad Patents

Using intellectual property as a form of harassment is on the rise in the US and Europe, and there seems to be no stopping it. US patent laws were last revised in 1952 and many industry leaders claim that they are not relevant to business today.

The Federal Trade Commission is teaming up with Cisco, Intel, eBay, Microsoft, Genetech and others to form a working group to find a solution to the problem of anti-competitive patents and to make the US patent system more equipped to deal with technical patents.

FTC Commissioner Mozelle Thompson announced the group after a high-level conference on patent reform, Ideas into Action – though the group is yet to be given a name.

Companies and individuals “troll” by exploiting vague patents to either prevent competitors from operating in a particular field or for extracting “license fees” for technologies that may only be distantly related to intellectual property actually in question. Often patent harassment is the sole revenue stream for a company.

3,000 patent examiners in the US handle 350,000 patent applications per year, allowing an average of 17 to 25 hours to check whether a patent application is valid or not. This means that a lot of nonsense gets through – academic studies claim that 95% of all US patents should not have been issued in the first place. Japan and Europe still have a poor showing at 65%.

The FTC wants to make it easier to challenge a patent with the Patent Office without having to go to court, and to limit the award of treble damages in cases.

Ideas Into Action

The Federal Trade Commission

UK Music Downloads Exceed 500,000 Tracks Sold

Figures from the Official UK Chart Company demonstrate that the record industry can’t have its cake and eat it: although paid music downloads this year have just broken the 500,000 barrier, CD single sales are down. Something has to give somewhere, and music lovers are turning to the convenience of downloads whilst buying correspondingly less singles.

The bestselling download in the UK so far this year is “2,000 Miles” by Coldplay.

Looking at the quarterly totals for January/March, the sales value of CD singles is down by 32% on last year, whilst CD albums are down nearly 3% this year, though the picture for the entire last 12 months is more encouraging.

Surprisingly, that great love of DJs, the 12” single has suffered a dip of 14%, possibly due to the slump in interest in trance – but bafflingly, 7” singles are up 47% on last year. Expect a retro CD single sales peak in about 2021.

Once iTunes launches in the UK and the new Napster finds its feet, we expect that CD singles will be affected even more dramatically, and music labels will need to find some way to make singles more compelling to the public to avoid cannibalising the market.

The British Phonographic Industry is upbeat about the state of the market, expecting great things from DVD music sales and “truetones” (ringtones that sound just like the track they’ve sampled) – no doubt something to do with the 3.8% increase in CD album sales that the year to March 2004 saw above 2003.

BPI Quarterly Market Review