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ABI Research Blog (111)

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 data. 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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Piracy versus Privacy Battles on Three Continents

Mar 30, 2011 12:00:00 AM / by Admin

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The tradeoffs between piracy and privacy are being fought on three continents as we speak. This issue puts the rights of citizens (specifically, the right to privacy) against the rights of copyright holders (specifically, the right to protect their intellectual property). Where will it end? Peer-to-peer distribution (i.e. BitTorrent) is becoming less economical due to the fear of prosecution. Usage Based Billing for broadband will also put a crimp in its style.

In North America, Time Warner lost a battle to limit the number of IP lookups the company must do at the request of those prosecuting copyrights. Time Warner appears to have been playing technically dumb in an effort to stand up for the privacy rights of their subscribers – essentially insisting that looking up IP addresses is a slow, tedious and expensive ($45 / lookup) process. Of course, if you only do a few, that is the case. But if you must do thousands, some simple automation should bring that cost down to pennies (or at least a couple of dollars). In France, about 50K violations are flagged each day; in January it was reported that the government’s HADOPI administrators were warning 2-10K of these users per day.
In Europe, TalkTalk and British Telecom (BT) are challenging the Digital Economy Act (DEA) based on similar grounds -- overstepping users’ rights to privacy, and being burdensome to ISPs.
Meanwhile, in Asia, Baidu’s document service (which allows public access to a variety of documents) found a needle in a HayStack – finding that less than 0.04% (1000 documents in 2.8 million) of the documents were non-infringing. Video distribution sites – notably YouKu and QiYi (owned by Baidu) – seem to be cooperating more fully with Hollywood, likely to ensure they remain viable investment vehicles to Western companies.

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Amazon Launches Digital Locker - But Does Somebody Still Need One?

Mar 29, 2011 12:00:00 AM / by Admin

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Amazon has become the first of the big firms to launch a cloud based digital locker for music (and video), amid continuous rumors that both Google and Apple are working on something similar. The whole locker concept is still up in the air because nobody really knows how its licensing dimension will eventually pan out. Much of that will depend on the outcome of the courtroom case between Mp3tunes.com and EMI. Amazon has apparently concluded that the risk of irking the labels is negligible, and isn’t paying licensing fees for content that it stores in its Cloud Drive service. The company'sother conclusion may wellhave been that if it wants to make its music download business grow, now was the eleventh hour to get a complementarylocker offering out.

In terms of specs and features, Cloud Drive seems pretty well designed and implemented – but that’s only if you still want to own the music you listen to. Not everybody does anymore, as our recent study on Mobile Cloud Music Services shows. One major factor that has worked in favourofon-demand and internet radio providers is the fact how ridiculously difficult listening to your own music collection viaphone or car stereo can be. Assuming that selling music track by track is the most lucrative form of digital distribution for the rights-holders, they have definitely scored an own goal by dragging their heels over cloud storage. (Yes, those lessons from the years when the only MP3 songs you could downloadwere pirated ones couldhave been learned slightly better by some.)

One tip toAmazon and others who bet their money on lockers: Add to your features a decent recommendation engine. Locker customers are likely to be heavy users, who own hundreds of songs. Putting such a collection into a desirable playlist can be tricky when the user is on the move, so integrating the service with a recommendation app (like e.g. Moodagent) canmake the listening experience a good deal better.​

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Baidu Mobile OS - Day Dreaming or Serious Contender?

Mar 23, 2011 12:00:00 AM / by Admin

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Today Baidu announced it was also going to get into the mobile handset OS market. As a number of commentators have mentioned, it is a space that is getting pretty crowded (iPhone, Android, Windows Phone 7, webOS from HP). And that is leaving out the cluster of Linux-based mobile OSes such as LiMo, Ophone (China Mobile) and WoPhone (China Unicom).
Why does Robin Li, Baidu’s chief executive, believe there is a need for (yet) another mobile OS? He did provide some commentary although the explanation is a little confusing…
Certainly it is true an iPhones takes 35 seconds to do a cold boot up. Most iPhone users would have their iPhone in “sleep” mode. From sleep mode to having Safari web browser open takes less than 2 seconds.
Slow smartphone boot-up times aside, there has to be more to this story than meets the eye…
Mr Li talks about “box computing”-based handsets. This could translate to Baidu wanting to develop stripped-down smartphones that have power search and media experiences that are accessed via the internet.
There is a lot that Baidu needs to get “right” and soon. See Insight for more information.

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