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ABI Research Blog (107)

ABI Research Publishing Cellular M2M Module Vendor Market Shares for 2010

Jul 2, 2011 12:00:00 AM / by Admin

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​Cinterion, a Gemalto company, is the cellular M2M embedded module market share leader for unit shipment volume in 2010. Concurrently, Sierra Wireless is the cellular M2M embedded module market share leader for vendor revenue in 2010. In early July 2011, ABI Research will publish our estimate of cellular M2M embedded module vendor market shares for 2010 unit shipment volume, and, for the first time, revenue. ABI Research has been analyzing market share on a unit shipment volume basis since 2003, and since that time through 2010, Cinterion has been the market share leader each year, including in its previous incarnations as a standalone pure-play module vendor, and as a unit of Siemens AG.

The top five vendors on a unit shipment volume basis in 2010 were, in order: Cinterion, SimCom Wireless Solutions, Sierra Wireless, Telit, and Sagemcom.
The top five vendors on a revenue basis in 2010 were, in order: Sierra Wireless, Cinterion, SimCom Wireless Solutions, Telit, and Motorola Wireless Modules.

A few points are worth noting. First, the module count included here does not factor in sales to connected CE devices (such as eBook Readers, and portable gaming devices.) Nor does it include modules used in embedded mobile PCs – notebooks and tablets. This vendor market share analysis is purely counting “traditional” cellular M2M applications, such as consumer telematics, vending machine connectivity, and telehealth.
For the revenue market share analysis, we included not only revenue from direct module sales, but also included revenue from modem and software sales. We believe this approach more accurately captures the economic value derived by each vendor from the M2M market.

Going forward into 2011, it will be interesting, in particular, to see Telit’s progress: the company has been one of the fastest growing vendors over the past several years, and with the addition of Motorola’s business, we anticipate they could rise up the market share rankings significantly in 2011.
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A Tough Environment for M2M MVNOs

Jul 2, 2011 12:00:00 AM / by Admin

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​Can MVNOs survive over the long term in the cellular M2M market? With mobile operators directly entering the market – with M2M business units, service delivery platforms, and development centers – MVNOs would seem to be in a precarious position. And looking at the history of MVNOs in traditional voice/data services certainly does not inspire confidence (remember Disney Mobile?).

Nevertheless, MVNOs are developing several strategies in an attempt to differentiate themselves from their mobile operator competitors. For example, KORE Telematics recently announced the acquisition of Mach Communications, an Australia-based M2M MVNO, as part of an overall effort to expand its geographic footprint.

Certainly, the KORE/Mach news is not an isolated example of an MVNO attempting to increase its reach and area of service, though it is a rare case of the actual consolidation of two players. Other instances of a growing global presence include Numerex (which rejects the “MVNO” label) opening an office in London to establish a European HQ, and ASPIDER Solutions and Wireless Logic growing in Europe. And some MVNOs have made international expansion a key aspect of their value proposition from the beginning, such as Wyless PLC’s “global SIM”. Indeed, KORE Telematics itself earlier this year announced a partnership with Vodafone to expand its European presence.
However, it is likely that a growing global footprint will prove to be a necessary, but no sufficient, factor to MVNOs’ survival in the cellular M2M market. While not all mobile operators are interested in providing a global M2M footprint, many are. Telenor Connexion just went on a North American roadshow, for instance, to tout its capabilities beyond its core European market. But wide coverage is not the only trick up the sleeves of the MVNOs.

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South Korea Wakes Up to LTE

Jul 1, 2011 12:00:00 AM / by Admin

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A few hours ago, when the clock struck midnight and June 30th handed over the baton to July 1st, South Korean mobile operatorsSK Telecom (SKT)andLG U+ both launched their 4G LTE services in Seoul. The news is so exciting that stories about the service launches have temporarily pushed even the closely followedApple-Samsung tit-for-tat off the front pages of Korean newspapers.

At the moment, LTE service from both operators is data-only. LG U+ is offering anLTE dongle from LG Electronics (LGE)and anLTE wireless router from Samsung Electronics which can support up to 10 users simultaneously. SKT is offeringa dongle from LGEand a modem fromC-motech which can support up to 7 users simultaneously. http://www.tworld.co.kr/html/phoneinfo/LTE/LTE_unit.html. SKT promises 5 types of smartphones from September and two types of tablet PC from October.

It will obviously be a week or two before we really get an idea of how the LTE networks are performing, so most of the Korean news stories are just repeating the well-known facts. SK Telecom, the dominant service provider in South Korea with roughly half of the mobile subscribers in the country, has a significant coverage advantage due to the 800 MHz spectrum where LTE has been deployed, compared to the 2.1 GHz spectrum that LG U+ is using. But perhaps LG U+, the smallest of the three mobile operators in Korea, is not trying to compete with SKT, but rather with #2 Korea Telecom (KT). Newspapers are already speculating that LTE could help LG U+ move into second place, leapfrogging HSDPA and WiBro operator KT. KT recently announced that they will launch LTE voice and data servicesin November, when LTE handsets might be available in sufficient volumes. KT claims that the real demand is for voice and data, so their competitors will not gain much advantage from launching data-only services now. Sour grapes, indeed.

All three Korean operators plan to have nationwide coverage by 2013. Meanwhile, SK Telecom is already talking about launching LTE Advanced in 2013. Lots of excitement in the Land of the Rising Won. Keep an eye on the ABI Research blog for news about LTE in South Korea.

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What is really driving mobile revenue growth in Latin America?

Jun 28, 2011 12:00:00 AM / by Admin

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Our latest release of Mobile Subscriber Usage and Traffic Market Data and Mobile Carrier and Revenue Market Data has shown that Latin America out grew other regions in terms of mobile revenues. This leads us to this question: what is causing all these increases?

One of the main factors was the migration from CDMA/TDMA to GSM/WCDMA networks. This brought about cheaper handsets and services which greatly boosted the 2G and 3G adoption rate as well as led to a strong year on year MOU growth of 14.4%. Putting these factors together, the operators benefitted from growth in ARPU . Other regions experienced ARPU decline or only meager gains.

Another factor that led to this growth was the increasing affluence in Latin America, achieving a GDP CAGR of 4% from 2006-2010. With higher disposable income, consumer are becoming more willing to spend on better mobile devices and value added services pushing ARPU and subscription rates higher.
The final factor would be due to the massive smart phone subsidies by operators in the region to accelerate the uptake of mobile internet services, a new engine of growth for many telecommunication operators in the world. One of such operator is America Movil who employed this tactic in the Mexico and Brazil markets.
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Another look at the iCloud: it's a start, but unexciting

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

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​Apple introduced the iCloud yesterday. Given that the first part was practically just about relaunching the old MobileMe as a free service, let’s focus in this post on the more anticipated part of the announcement, the iTunes in the Cloud. There are a couple of points that caught my attention. You can also check my preview from Friday.

It’s still a bit unclear to me whether the iTunes in the Cloud will actually use streaming or re-downloading, but at least Apple’s presentation used only the verb ‘downloading’ so I assume that it will be just about synced downloads to the covered 10 devices. Streaming (in a combination with offline caching) is definitely a more convenient method from the consumer viewpoint – tackling the limitations of local storing is after all one of the key benefits of all things cloudy. It would thus be odd if Apple didn’t provide streaming at a later stage. The download strategy sounds like a temporary compromise made with the labels and publishers – or maybe even mobile operators.

As we argued in our cloud music report, making legal music services more convenient and exciting to use than illegal ones is a way the rights-holders can monetize consumption that has so far escaped their revenue channels. Apple’s iTunes Match is exactly about that – if you pay for it, it will sync even the stuff you never paid for; no questions asked.(TheMy Music Anywhereservice Catch Media has deployed for Best Buy / Carphone Warehouse does more or less the same and some more, for a higher price.)

A whole another matter, then, how many users Apple will convince to pay for this. It won’t save storage space and it won’t allow you to discover new music, so I personally find the value proposition pretty poor. Even still, perhaps the biggest surprise is the iTunes Match’s low price tag: $24.99 per year isn’t actually a lot for laundering gigabytes of pirated tracks from people’s hard disks, if one considers that Apple most probably had to agree to rather generous revenue-sharing terms to win over the rights-holders.

With its push to the cloud, Apple obviously wants to add extra appeal to its device family, but in addition it will be interesting to see how much and what type of advertising the new services will contain. The more central role Apple’s ecosystem will play in consumers’ everyday lives, the more attractive it will become as a mobile advertising platform.​

Anyhow, as I mentioned already on Friday's post, the importance of the iCloud launch shouldn't be judged simply by what it actually offers. Your mainstream consumer isn't yet either familiar orcomfortable with cloud services,and it may well take Apple to change that.

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Netherlands Net Neutrality

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

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Last month, I published an Insight about KPN's plans to introduceadditional charges for services such as web browsing, mobile VoIP, IM and video. Dutch consumers were incensed by KPN's proposal.

"KPN: The Dutch Try to Plug The Revenue Dike"

Good news for consumers. As a result of the public reaction to KPN's plans, the Dutch parliament has asked the government to amend the Telecommunicatiewet (Telecommunications Act) to ensure net neutrality. The Ministry of Economic Affairs, Agriculture and Innovation is working on the amendments now, and the Minister told parliament on May 24th that he will present the proposed changes within a few weeks. Service providers will not be allowed to block or charge extra for specific Internet services.

"Guarantee Free Internet in the Telecommunications Act"

KPN has not yet responded to this latest development. Presumably the company will wait to see the wording of the proposed changes before they introduce any new pricing plans. They may need to find other ways toaddress the continuing slide in ARPU.

It will be interesting to see if other European countries follow suit. Neelie Kroes, Vice President of the European Commission for the Digital Agenda(and formerly Minister for Transport, Public Works and Telecommunication in the Netherlands), has said that she will "take the measures necessary" if service providers block services or charge for services unfairly, but in practice the European Commission generally leaves these things to the individual countries to legislate and enforce.

UPDATE:

On June 22nd, the Netherlands "became the first country in Europe, and only the second in the world, to enshrine the concept of network neutrality into national law by banning its mobile telephone operators from blocking or charging consumers extra for using Internet-based communications services like Skype or WhatsApp, a free text service."

http://www.nytimes.com/2011/06/23/technology/23neutral.html

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What can we expect from Apple's iCloud?

Jun 3, 2011 12:00:00 AM / by Admin

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​Apple is set to launch its much speculated iCloud service next week. In the following I will take a quick look at what we at ABI Research are expecting from Monday’s announcement and its implications.

*The most mundane stuff – syncing contacts and calendar items, maybe 5-10GB of file storage – will be offered free of charge to all Apple users. So iCloud will essentially replace MobileMe, which never grew more popular than it did because in its price, $99 a year, there was $99 a year too much.

*It obviously is no longer a secret that iCloud will come with something musical, most likely in theform of a digital locker. At a later stage, this will also coverfilms and TV series, but probably not yet. Music licensing has kept Apple busy enough – and besides, adding the video hub later will give iCloud another wave of hype and speculation.

* If the rumors about the revenue-sharing model are even remotely true (Apple 18%, labels 70%, publishers 12%), it’s clear that the main purpose of the iCloud Music is to boost iTunes and Apple’s devices vs. competition. It’s not meant to be a stand-alone service.

* The biggest advantage that iCloud will have against Google’s and Amazon’s rival offerings is likely to be its central repository, which is where the music is. No need to upload anything unless it’s a really quirky piece of art, which saves users some time/nerves and Apple some money. I’d stress that ‘some’ bit here: it’s a plus, but not a game-changer. Catch Media does the same already.

It stillescapes my understanding why the record labels didn’t embrace the locker model a few years ago, when it would have been something genuinely innovative, but then again it’s by no means the only thing in their business that has managed to do so. Nonetheless, assuming that labels and publishers do get a better deal out of download sales than on-demand subscriptions (such as Spotify, Rdio and KKBOX), it would have been in their interest to make iTunes and Amazon better muchearlier.

Perhaps the most far-reaching implication of iCloud: consumer education. Apple, with its big marketing budget and general excitability, willhelp demystify the cloud and teach people what it actually can do, especially for mobile. That will benefit other cloud players as well.​

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Intel acquired SiPort maker of Digital Radio Silicon

Jun 3, 2011 12:00:00 AM / by Admin

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Intel acquired the key HD Radio chipset manufacturer, SiPort last week (5/25). The letter to customers (http://www.siport.com) assures continuity of supply through the transition period. In our Digital Radio Report last year, we published the following profile of SiPort:

SiPort is a fabless semiconductor startup based in Silicon Valley with venture capital funding from companies including Intel Capital and Lightspeed Venture Partners. SiPort creates a single-chip RF and baseband digital radio receiver chip. SiPort is the leading manufacturer of silicon for portable HD Radio implementations in the United States, with a total of one million units shipped from late 2008 until June 2010. The Microsoft Zune’s radio receiver and the Insignia HD01 are based on SiPort’s silicon. SiPort also provides silicon to PNDs, which receive data services for live weather and traffic information.

SiPort’s SP1010 receiver uses an RF CMOS (Complementary Metal-Oxide Semiconductor) manufacturing process to achieve low power and high integration. SP1010 uses less than 100 mW of power, enabling long battery life. SiPort provides silicon to LG Innotek’s HD Radio modules, which go into home A/V receivers, PNDs, and PMPs (Personal Media Players).
The SiPort IP will likely find its way into more integrated solutions – which will increase the ease of including HD Radio into all the devices we already use. In the vast scheme of things, a Radio receiver is a small bit of silicon and with smaller electronics depending on higher levels of integration it is more economical to put it together with larger silicon.
According to the announcement, “digital radio is poised to become an important ingredient for handsets and other mobile devices …”. That implies that this is a move to add digital radios into cellular baseband silicon, based on the recent Infineon Wireless acquisition. However, to do only that would spell the end of HD Radio. HD Radio’s current (slow) traction in the US has come first from automotive and second from CE devices, such as high end A/V receivers. The situation in Europe with DAB (which SiPort also supports) is somewhat different with tabletop models dominating a much faster transition, driven by DAB’s pressure for analog shutoff (ASO) that HD Radio’s In-Band on Channel (IBOC) does not have.
Therefore, Intel would be wise to also put this digital radio receiver into Atom products targeted at Automotive and In Vehicle Entertainment, as well as to continue supporting it as standalone silicon for other products. If they fail to do that, and instead make it harder for other manufacturers to get standalone chips for integration into products with other manufacturers’ SoCs (as Intel is not today market share leader in automotive), the void in receiver only solutions could spell the end of HD Radio.
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1Q 2011 Semiconductor Supplier Rankings Show “Business as Usual”?

Jun 2, 2011 12:00:00 AM / by Admin

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We regularly publish total worldwide semiconductor rankings and this gives me a chance to get some perspectives on the whole market rather than small sections of it.

The 1Q11 update seemed to show it was business as usual for many suppliers but with some major merger and acquisition activity in 2011 the market is set (certainly at the top level) to change significantly.

Three of the biggest announcements were Intel's purchase of Infineon's wireless solutions business (completed 1Q11), Qualcomm's purchase of Atheros (completed 2Q11) and Texas Instruments purchase of National Semiconductor (Due for completion 4Q11). Each will have a significant impact on worldwide semiconductor supplier shares and​competition in markets such as mobile device semiconductors,wireless connectivity and analog ICs.

I'm looking forward to the end of the next quarter to see the initial impact of M&A activity on supplier market shares and (of course)wondering whatwill happen nextin theconstantlychangingworld of semiconductors.

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Next Generation broadband rollout in Asia Pacific

Jun 2, 2011 12:00:00 AM / by Admin

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​IP-Traffic is growing high due to the change in user behaviour. People are using mroe time online for busines, social networking, entertainment, etc. Video viewing is not only on traditional broacast TV anymore since IPTV And online video servics have emerged. Online video streaming, video calls and online gaming are generating massive IP-traffic.

Asian Pacific countries have realized the need to upgrade the broadband infrasturcture to meet the bandwidth need for the users. A number of countries in Asia Pacific are now deploying next generation broadband network.

Singapore plans to cover 95% of household with 1Gbps fiber optic broadband access by 2012.

Australia targets to connect 93% of household with 100 Mbps fiber optic broadband by 2017.

New Zealand government has set plans to roll out 100 Mbps broadband access to 75% of households by 2019.

China plans to increase fiber optic broadband penetration and broadband coverage with five years plan from 2011 to 2015.

Malaysia aims to cover 1.3 million homes with high speed broadband network by the end of 2012.

Asia Pacific, which has about 22% broadband penetration, has a good potential for broadband growth. National broadband initiatives will drive the broadband penetration growth in the region. Besides, next generation broadband initiatives will raise average broadband speed in the region. Better speed and more innovative services are expected to come with the launch of next generation broadband in the region.

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