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This just in – Elvis is still dead, mass exodus from AT&T doesn’t materialize

Apr 20, 2011 12:00:00 AM / by Admin

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AT&T released their first quarter results this morning http://www.att.com/gen/landing-pages?pid=6080 and to no one but cranky bloggers (not me) and doomsday rumorists (business talk show commentators) surprise, the company has reported no change in their churn rate year over year, clocking in at 1.36% for the quarter, and actually signed a record number of 1Q net subscriber adds. In addition, the company sold 3.6 million iPhones and revenues up $700 million compared to 1Q 2010.
So where are all of the whiners that have carped incessantly about the AT&T network issues? They must have all left as part of the 1.3 million subscribers who churned off AT&T in Q1. In my opinion, unless you are an AT&T subscriber with first-hand experience or you can point to hard evidence (independent consumer survey, real churn, etc.), you shouldn’t be commenting on a presumed network issue.

What is the bigger story here?
1. Time to consider debunking the AT&T network flaw. Unless AT&T churn steadily increases over the next two quarters, a sufficient enough time for a large percentage of those AT&T subscribers that are the most unhappy to get out of their contracts, the network issue a) must not be big enough to matter to a significant number of subscribers, or b) is basically a lot of hooie.
2. Apple is happy. Congratulations Steve – you have just proven that the market for iPhone won’t cannibalize itself.
3. Verizon is not necessarily unhappy. From all indications, Verizon doesn’t appear to have expected a significant number of AT&T defectors, at least in the short term. While we wait for Verizon to report their earnings officially, the early indicators are that their iPhones were largely sold to existing Verizon subscribers, which will make those subscribers pretty happy.
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Microsoft and Toyota Bringing the Cloud to the Car

Apr 14, 2011 12:00:00 AM / by Admin

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Microsoft and Toyota recently announced a new strategic partnership to build a global next-generation telematics services platform based on the Windows Azure cloud technology with both companies investing 1 billion yen ($12 million) in Toyota Media Service Co., a Toyota subsidiary offering digital information services. The technology will first be implemented in Toyota’s electric and plug-in hybrid vehicles in 2012 followed by the availability of a global cloud platform by 2015 providing affordable and advanced telematics services to customers in the 170 countries where Toyota is present. Applications will include battery charging status tracking, control of charging schedules in order to benefit from the lowest rates, control of heating and air conditioning systems while the vehicle is plugged into the grid, dynamically monitoring range and miles until the next charging station, music streaming, and information services.
This partnership highlights an important shift in the telematics industry with (cloud-based) software technology vendors playing an increasingly important role. Cloud-based solutions offer many benefits in terms of hardware and operating system independence, costs and scalability, and always up-to-date information but also represent challenges in terms of the dependence on the continuous availability of a wireless connection.
Toyota has partnered with a large number of telematics vendors in the past including Denso, Harman, Aisin, and ATX often working with different suppliers in different regions. With globalization being embraced by the automotive industry, it is no surprise Toyota is looking for partners which can support its products on a global level and at acceptable costs. These are exactly the benefits Microsoft is touting of its enterprise-grade, scalable Windows Azure platform. Obviously, this is not a trend traditional telematics vendors will be welcoming.
Cloud-based platforms aren’t entirely new to Toyota, having announced the Entune infotainment solution at CES earlier this year, and which was referred to by Toyota’s Toyoda as likely to benefit from the Microsoft deal in terms of new applications. Having lagged other car OEMs in introducing connected car technology for many years, Toyota is now firmly embracing the global connected car concept as a key differentiator in its fight against its competitors.
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Intel shares road ahead for Atom processor platforms

Apr 13, 2011 12:00:00 AM / by Admin

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Processor stalwart Intel took the wraps off two additional application platforms this week – Oak Trail and Cedar Trail.

The project originally known as Oak Trail is a next-generation Intel Atom processor platform (formally the Intel Atom Processor Z670 and the companion Intel SM35 Express Chipset) intended for media tablet and so-called “hybrid” device designs. The platform is the company’s first official foray into the Tablet PC market, which has been losing mindshare to consumer-driven Media Tablets dominated by competing ARM processor platforms. Intel claims 35 design wins for Oak Trail.
Intel also provided a glimpse into the company’s next-generation netbook platform code-named Cedar Trail. Several of the features found in the higher-end Core i-series processor families, including Wireless Display and improved graphics and power consumption, will be included in the upcoming release. A relatively new capability, called Intel Wireless Music, reuses the Wireless Display functionality to stream audio to specially-designed 3rd party speaker systems without any cables.
Intel Atom architecture currently supports a trio of commercially available operating systems: Microsoft Windows, MeeGo, and Google Android along with the forthcoming Google Chrome OS.​
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Successful 550 Person Consumer Electronics Team Available

Apr 13, 2011 12:00:00 AM / by Admin

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Recent events clearly show that Cisco has been unable to appropriately feed & nurture consumer-facing businesses – from Linksys (now Cisco’s Home Networking group) to Flip and most recently internally launched Umi. Given this background, Cisco’s decision to exit Flip isn’t entirely surprising – Cisco wasn’t able to manage it successfully and the divergent needs of the consumer business proved a distraction for management.

However, it is likely that Cisco could have found another buyer for Flip – companies as diverse as Kodak, HTC, or SanDisk would have interest in using this as a launching pad to a new way to engage with customers. Jonathan Kaplan’s recent interview with All Things Digital indicates that pulling the team back together isn’t off the cards (it has a subtle “team for hire” undertone) – although it appears as if the buyer will need to negotiate twice – once for the team and the second time for the Flip assets (brand name and designs). Closing Flip sends a clearer message to investors than finding a buyer – and simply shifts the burden from Cisco management to the Flip team themselves.
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World’s First Through the Middle (TTM) Offering Reverts to Over the Top (OTT)

Apr 11, 2011 12:00:00 AM / by Admin

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Operators have started to look to Through the Middle (TTM) offerings, in which they gain rights to present internet video within their walled gardens, as one response to the increasing amount of Over the Top (OTT) content. One of the early success stories of this strategy, from both an operator and user perspective, was the way Virgin Media implemented a backwards program guide (EPG) featuring the BBC’s iPlayer programming.

The BBC Trust has said it would look down on customized (‘bespoke’ in proper British English) versions of the iPlayer. Recent reports state that Virgin Media is giving up this level of integration. While British regulator Ofcom hasn’t yet finalized this ruling, Virgin Media’s previous contract only allowed it access to about half of the iPlayer’s content. Gaining access to the other half of content required a new contract -- and therefore giving up the high level of integration previously offered. It does appear as though Virgin will continue caching some BBC content locally in its internal CDN, providing a managed level of service – but without an integrated users experience.
This highlights the tug of war between content owners (such as the BBC) and operators (such as Virgin Media) – each of whom wants to be seen by the viewer as the key content brand.
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Adaptive Bitrate gets more Cacheable with SeaWell Networks Spectrum

Apr 11, 2011 12:00:00 AM / by Admin

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At NAB today, SeaWell Networks (http://www.seawellnetworks.com/) launched their Spectrum solution – a streaming media solution that repackages adaptive bitrate content from one format to another. In our recent Encoding and Transcoding report (http://www.abiresearch.com/research/1003156), we stated: “Some strides are being taken to move encapsulation to the edge of the network. In October 2010, Envivio announced its Genesis architecture in which the Network Media Processors (edge processors), located inside the CDNs (Content Delivery Network), handle packaging and encryption.” Seawell’s product is another solving this problem. In a recent call, they described the capabilities of the solution including dynamically generating manifests or playlists, and modifying packet size.

SeaWell Networks’ previous product – Lumen – is the first example of an encoder supporting H.264 SVC we’ve seen targeted for use outside of the teleconferencing environment, where SVC has gained some leverage. SeaWell wisely saw that mandating SVC adoption for their repackager would limit its adoption – so they’ve tried to adopt a more from any-protocol to any-protocol – which is possible because H.264 underlays all of the approaches.
SeaWell Network’s innovations in their Spectrum products should allow ISPs and video providers to make better use of cached video data within their content delivery networks (CDNs) by decreasing the impact caused by fragmentation of platforms and protocols including Microsoft Silverlight, Adobe Smooth Streaming and Apple’s HTTP Live Streaming.
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M & A Activity Continues to be Rife in the Semis Industry

Apr 8, 2011 12:00:00 AM / by Admin

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The announcement this week that TI is to purchase National Semiconductor led me write an insight on the subject (published yesterday: http://www.abiresearch.com/research/1007580).It also gotme thinking aboutother recentM&A activity thatis transforming thesemiconductor market.

While being big news, the TI/National Semi deal will have its most impact on the analog IC market where TIwill become the "Gorilla in the Room;" as the resources it has at hand will far outweigh much of the competition.

Other big acquisitions of noteinclude Qualcomm's purchase of Atheros which willincrease itsshare of the mobile handset IC marketandpossiblyincrease the connectivitytechnology in the Snapdragon platform.

AlsoIntel's purchase of Infineon's Wireless Solutions businesspaves the way for the company to automatically gain significant share of some sections of the mobile handset IC market and offers an Intel the opportunity to leverage Infineon's products and make a play for the platform solutions market that Qualcomm currently dominates.

See http://www.abiresearch.com/research/1007536for amore in depth view.

Where will it all end??​

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YouTube Channels to use low-cost Professional Content

Apr 7, 2011 12:00:00 AM / by Admin

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Today’s Wall Street journal reports that YouTube is going to launch about 20 TV channels with low-cost professionally generated content – in line with their recent acquisition of Next New Networks. This move to cohesive channels would help their YouTube Leanback strategy – which has been surprisingly quiet since it was launched with Google TV last fall. Strangely, this strategy has already shown some success in China – with key video sites YouKu and Todou sponsoring some content creation.

In our upcoming Over the Top report, we discuss the multiple ways user’s ability to identify and locate video – including traditional EPGs, recommendations, search and social. We believe YouTube’s historical methods of finding content have been too confusing – especially for the TV screen – with the blending of search, recommdations, queues, subscriptions, channels and the like. Hopefully YouTube’s new initiate will help simplify the offering and make it transfer to the TV – from the experience as well as from the content perspective.

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Dish Network Acquired Blockbuster Assets

Apr 6, 2011 12:00:00 AM / by Admin

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Today, Dish Network acquired the assets of Blockbuster, Inc – including 1,700 stores that will remain after an additional 700 store liquidations complete. The bid was valued at $320 Million dollars. What is Dish Network getting?
1,700 stores
Several thousand Blockbuster Express Kiosks
Content agreements with Hollywood to gain access to day and date DVD Rentals.
Blockbuster On Demand streaming movie service that competes with Netflix
Blockbuster by Mail delivery service

Dish plus Blockbuster could be all entertainment things to all people – Leave your kids watching Blockbuster on Demand as you Sling your favorite recorded satellite-broadcast TV show to your smartphone while filling up gas and renting another movie from the kids at the Blockbuster Kiosk as you drive to the Blockbuster store to pay your Dish network bill.

We expect to see Dish Network capitalize on the Blockbuster brand name in a number of service offerings (possibly the "Blockbuster Dish Network") and use the physical footprint to sell and service (collect payments) its various products.

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Is Pandora a Canary in a Data Mine?

Apr 5, 2011 12:00:00 AM / by Admin

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​Pandora’s SEC filing and related reporting spill some interesting beans on what is arguably the most decisive regulatory issue that touches mobile app developers – in other words, the privacy and the security of collected user data.

All this reminds me of LinkedIn’s founder’s recent comments that the Web 3.0 (in case we experienced a sudden dearth of internet buzzwords) will be defined namely by da​ta. User data basically are the raw materials of applications such as Pandora and LinkedIn, and data mining tools are then the way for such companies to turn those raw materials into something productive. Some degree of data tracking and analyzing should therefore be allowed if such services are to make profit and innovate further.

Yet this is by no means to endorse a frontier mentality over privacy and security. The app developers should come out clean(er) on what type of data they actually collect and pass on to to their third-party partners, and if they do not so voluntarily then the policymakers should step in and introduce relevant regulations.Either way, the impact on the involved business models is likely to be negative. Consumers will share less and opt out more.

As a result the firms that rely on advertising revenue will have to put up with varyingly sizeable groups of “don’t-track” freeloader users who may enjoy the benefits of a full service but do not disclose any of the data that make it possible. But that’s something the mobile/internet/e-commerce industry will have to learn to live with, and they surely will. Manufacturing, pharmaceutical, media and very many other sectors haven’t been allowed to operate as they please for decades, and that obviously hasn’t killed them off yet.​

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