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ABI Research Blog (114)

Cisco Consumer Business Group Management Changes

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

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Cisco’s push into the consumer market has seen its ups and downs over the past couple of years. Some products have made a strong impact like the Flip cameras and the Valet line of routers, while others have not fared so well – think networked audio and Media Hub. However, the one consistency has been the resolve of Cisco to continue pushing into the consumer market with a close eye from John Chambers himself, and the leadership in the consumer segment of Ned Hooper.

In an announcement this week, Cisco has shaken up the management of the Consumer Business group. Ned Hooper will continue to drive Cisco's overall strategyasChief Strategy Officer, while Marthin De Beer will take over leadership of the Consumer Business Group. Marthin is also responsible for the TelePresence and Emerging Technologies BusinessGroups. This realignment brings the consumer TelePresence management under the same umbrella as other consumer-focused products.
The most surprising part of the announcement is the departure of Jonathan Kaplan. Jonathan came to Cisco with the Pure Digital (Flip) acquisition and was responsible for driving the Valet router which was a huge step forward for home networking equipment in terms of ease of use. Jonathan was a big part of that acquisition and his departure could be seen as a negative for Cisco’s future in the consumer space. With the wide breadth of talent within Cisco, it is highly unlikely that one person’s departure will undermine the overall consumer strategy of the company. We expect to see continued focus from Cisco on consumer products and look forward to future product announcements.
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GPS Glonass Perestroika Brings new Level of Performance to Cellular Market

Feb 10, 2011 12:00:00 AM / by Admin

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The restructuring of GPS design to support Glonass highlights the continued quagmire that is Galileo and represents a new shift in performance for the consumer location market.

With this week’s announcements from ST-Ericsson and Broadcom, Glonass has finally arrived to the mass market. Glonass is not without its own chinks in the armor, most recently the failed launch of three satellites in December. However, it currently has 22 healthy satellites and with current GPS performance techniques offering increasingly diminishing returns, Glonass is the next logical step.
So how is this better for LBS? Well your PND still won’t be able to work indoors, and you won’t be able to check-in to the nearest centimeter. What Glonass will do is stabilize the user experience, helping to eradicate many of the issues around dropped fixes and urban canyons, particularly in the northern hemisphere. Put very simply, the more birds in the sky the more likely you are to see one. This benefit will be felt most in the cellular market where suboptimal antennas and RF environments, have created an inconsistent and frustrating experience that still hinders long term usage. This market is discussed in greater detail in http://www.abiresearch.com/research/1003335 .
Will GNSS chips now be the size and cost of a Motorola Dynatac? Well, GPS/Glonass support requires a re-architecting of the RF front-end, to support both signals. This can result in an increase of 15-30% in size with a corresponding increase in cost. However, as manufacturers move to 45nm nodes (as is the case with St-Ericsson), the additional size can be absorbed, while much of the cost will be negated in high volumes.
The real problem here will be how to market this new and improved location experience. Perhaps, the industry should take its lead from the men’s shaving industry, where clever names are used to hide the fact it stopped being useful after 2 blades ago - maybe something with the word stealth in it!
And what of poor Galileo? Five years ago everybody was talking about it, with system support quickly becoming table stakes. Despite 2011 being Glonass’ year, I believe that Galileo has reached its nadir courtesy of Julien Assange, and by 2015 it will be at the forefront of the next revolution. You still won’t be able to locate indoors using satellites, but you might start getting down to the centimeter accuracy with L1/L5 receivers, which really will be a revolution in the industry.

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Cisco acquires Inlet for Adaptive Bitrate delivery to N screens

Feb 4, 2011 12:00:00 AM / by Admin

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Cisco announced today that it would acquire encoder / transcoder specialist Inlet technologies. In its press release http://goo.gl/6tASR it highlighted Inlet’s Adaptive Bitrate (ABR) technologies,required for delivering content to connected internet TVs, set-top boxes, internet adapter boxes, PCs, tablets and mobile phones.

Cisco’s acquisitions highlight the fact that delivering video to every device – once the focus of internet and “new media” companies such as Netflix, Hulu, Amazon, Vudu and the like, is now more important to the traditional cable MSOs and telcos delivering IPTV services. By bringing Inlet’s technology together with Cisco’s own relatively complete line of offerings to service providers, they are in a better position to rapidly help operators bring on line the next generation of live TV, catch-up TV and VOD through new TV Everywhere or N-screen platforms.
Cisco will pay around $95 million for a company that had about $20 million in VC investment, providing a good return to its shareholders that include Capitol Broadcasting, Core Capital, Technology Venture Partners and the Technology Development Fund.
As we described in our Worldwide Pay TV Encoder and Transcoder Markets http://www.abiresearch.com/research/1003156 report:

“Inlet is a venture-funded company founded in 2003 in Raleigh, North Carolina that has raised over $20 million. It currently has about 60 employees with strong video and IP networking expertise. Inlet is one of the leaders in live and real-time encoding and transcoding to N-screens with its Spinnaker product line. It started delivering content to the web (PC), but has quickly added capabilities to deliver content to mobile devices and tablets. Inlet also has a higher performance Fathom line for either live or file based workflows that offers higher levels of performance and customization. Inlet also has a VoD platform, named Armada.
Inlet was one of the first companies to demonstrate adaptive bitrate solutions with Adobe, Apple and Microsoft. They typically take in high bitrate, high resolution master images and deliver multiple resolution and multiple bitrate outputs in many wrappers. Inlet has IPTV deployments with cable TV operators, partnerships with content delivery networks and supports Xbox Live’s ingest. In addition, Inlet has many sporting engagements including powering the NFL’s Sunday night web application, which allows the user to select camera angles, watch replays of key plays, and view other interactive content along with video.”
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Telit Swallows Up Motorola M2M Unit to Better Compete in a Commoditizing M2M Modules Industry

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

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Today (January 28, 2011), Telit Wireless Solutions and Motorola Solutions signed an agreement for Telit to acquire Motorola’s M2M modules business. This is the latest in a string of mergers and acquisitions activity in the M2M module market over the past several years that include the purchase of Wavecom by Sierra Wireless in February 2009, of Cinterion by Gemalto in June 2010, and of Enfora by Novatel Wireless in December 2010.
The consolidation underway in the industry is reflective of the increasing commoditization and price competitiveness in this market segmentthat is being exacerbated by the entrance of APAC-based module vendors, such as Huawei, SIMcom Wireless Solutions, and ZTE.
However, while the previously-mentioned acquisitions resulted in synergies in products, channels, and geographies, or enabled a fundamental change/expansion of strategic direction, ABI Research believes the Telit/Motorola deal revolves much more around achieving economies of scale benefits. Telit seeks to better compete in a more cost-constrained competitive environment, and Motorola Solutions seeks to divest itself of a non-core component level business. The combination leads to a vendor that in 2009 would have accounted for roughly 18% of the M2M embedded module market, on a unit shipment basis. (2010 market share figures will be available in a few months.) This is a good deal for both companies.

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Nintendo 3DS…Sony PSP2…Compelling Enough to Stave Off the Transition to Mobile Gaming (at least for now)?

Jan 26, 2011 12:00:00 AM / by Admin

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As various rumors surrounding the Sony “PSP2” are bandied about the Internet (not to mention news around the upcoming Nintendo 3DS launch, or potential products from Panasonic (Jungle) or Razr (Switchblade)) one could be forgiven if he or she were to get caught up in the hype and temporarily lose sight of mobile’s threat to portable game players. But for the moment let us consider what the future of portable gaming might look like.
Nintendo 3DS
First to the plate will be the Nintendo 3DS (which didn’t come out holiday 2010 as some predicted), which is hoping to usher in a new chapter in the rather nascent 3D market; aiding this effort are some strong features like: 3D slider to adjust the “depth,” Internet browsing, Wi-Fi, 3 cameras (2 rear-facing for 3D photos and 1 front facing 2D camera), 3-axis accelerometer and 3 axis-gyroscope, 3D movie support, and backwards compatibility (DS). In addition the 3DS might encroach upon other devices’ feature sets like eReaders and portable media players.
Whether or not 3D will, in of itself, be a strong enough differentiator to maintain the gap between portable and mobile gaming is still uncertain, but there are some caveats to the glasses free technology that might give some pause. Early reports suggest the 3D sweet spot is rather limited and differs between games – this could potentially impact the user experience if the game supports some of the motion controls. In addition some might point to the 3D TV market as further signs of mixed receptions, although 3D TVs have a number of unrelated (to the 3DS) issues.
Another potential detractor is 3D game/system performance. In other words 3D does not come “free” or necessarily makes for a better experience. Battery power with 3D is expected to hover around 3-5 hours while non 3D games (e.g. DS games) should allow for 5-8 hours – regardless this is lower than the current DS line which ranges from 9 to 19 hours (depending on model and brightness). In addition some have mentioned frame rate reductions when using 3D – again this is not terribly surprising considering reports surfaced that the 3D experience on games like Call of Duty Black Ops were less than satisfactory. Some of the expected launch titles have also been delayed, most notably Kid Icarus Uprising, The Legend of Zelda: Ocarina of Time 3D, Mario Kart Game, and Animal Crossing (all of which might not make it to market until post E3/June 2011). But despite these potential hurdles there is little reason at this point in time to expect anything other than a warm reception, especially given the price at $250 (for US market).
PSP2
There are a number of possible features for this device which include: 3G (for gaming and data, currently not voice calls), large OLED touchscreen, and likely no UMD support. Of the two the PSP2 sounds more “evolutionary” than “revolutionary”… although depending on the reception to 3D in portable gaming the 3DS might be more of the latter as well. While the 3G feature is not expected to include voice calls (at least for the portable) we might be privy to the next evolutionary step towards a mobile future (that is engulfing/eliminating the differentiating term “portable”). Reportedly NTT DoCoMo in Japan will support the PSP2 although no word yet on other markets.
Other Potential Portable Gaming Platforms
Neither company has confirmed a launch date or even if the product will ever see the light of day, as it were. Panasonic is further along on the road to market, with testing recently announced, but the question remains if the PC gaming market is actually looking for such a portable solution. Both Panasonic and Razer would likely target the online gaming and more specifically the MMO market. While a unique proposition these devices might find the market more niche than lucrative, although if these devices include 3G connectivity (without additional fees) then perhaps the value/appeal might extend further – in other words this would make the device far more portable/mobile than having to track down a Wi-Fi hotspot.

The portable market will surely continue to get folded into the mobile space – 3G connectivity and PSP2 phone rumors are just natural progressive steps towards this near inevitability. While there will still be room for portable game players (e.g. those who don’t want or can’t have a mobile phone) the market will be smaller and likely far more competitive. Regardless, as intimated earlier, we might soon reach the point where portable will mean mobile, and to some this might already be the case.
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What's on your iPad 2 feature wish list?

Jan 18, 2011 12:00:00 AM / by Admin

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There is no shortage of rumors about a supposed next-generation iPad product from Apple Inc. Yesterday, the company announced that its CEO, Steve Jobs, will take a medical leave from his daily duties and today the company will announce its most recent financial results (including the third full quarter of iPad shipments).
Neither of these events will squelch fanatics about rumors of an “iPad 2” due out sometime the first half of this year (Apple has a fairly predictable cadence for new product announcements). While everything but the kitchen sink (is there an app for that?) has been talked about, ABI Research expects the following upgrades to occur as the tablet product line evolves:

Must Haves
A multi-core processor: Multi-tasking and HD media playback are increasingly common tasks asked of media tablets and not the greatest strength of iPad. The company’s investment in semiconductor development and the release of the A4 chipset (based on ARM’s Cortex-A8 single core architecture) should give cause for a dual-core applications processor based on ARM’s Cortex-A9 platform architecture. The resulting capabilities should be able to provide single and dual-stream 720p HD modes, and potentially some 1080p HD visuals if the screen resolution is also improved.
Camera(s): At least one, but likely two cameras (front- and rear-facing) will appear in the next iPad release. A glaring omission from the first iPad, supposed prototypes of cases for an iPad 2 have appeared that reveal camera placement. The presence of a camera fits into Apple’s software strategy for FaceTime video conferencing and third-party development of utilities and entirely new uses of the camera input.
Should Haves
Increased durability: Despite the talk that every corporation has deployed the iPad, most companies have not considered the role of a media tablet in their organizations. To become a true workplace machine, it needs to be hardened for survival and able to weather the elements. Can “rugged” and “style” both be delivered in the same product?
Memory card interface: How many meetings have occurred where the presenter wants to share a presentation file, but can’t get the iPad connected to the Wi-Fi network? If the machine were a PC or a Mac, a USB thumb drive would quickly solve the task. But not the iPad. A physical method for moving data on and off the device is needed.
Won’t Haves
4G (WiMAX or LTE) support: Simply put, there isn’t sufficient network coverage within any country to warrant Apple’s cost to create a custom 4G modem module. The ability to support all of the “major” LTE implementations (about 12) is also complex. There is talk that Apple will start relying on Qualcomm’s modem baseband components in future products to deal with the need for UMTS- and CDMA-based 3G network relationships it already has. Maybe in 2H’2011 the situation for 4G will improve, but we think a 1H’2012 provides suppliers, including Apple, greater confidence.
A 7” model: In October, company executives were quick to dismiss competitive tablets that offered 7” displays (compared to the iPad’s 9.7” glass) as dead on arrival. While the 10” class media tablets are being well-received for in-home use, the mobile usage case is showing interest in the 7 to 8” displays.
A CE price-point: Sub-$250 is necessary to see media tablets become interesting to mass markets. This doesn’t mean that every tablet needs to be at or below this threshold, but the vast majority of consumer products do. ABI Research has no reason to believe that Apple will give up its high-end positioning; rather the company will let the early majority market shake out over the next 24 months and skim from the top.
The combination of 4G wireless, ruggedization and a more mobile size are the recipe for media tablets segmenting into mobile internet tablets. Its formation is where business use really takes off, and one that we’re currently skeptical Apple has the channels and the product offering to compete long-term.

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Newspaper Subscriptions to Replace Free Digital Content?!?

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

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In a parallel to the classic “man bites dog” twist on what makes newsworthy headlines, separate reports suggest Apple is working with content publishers to shift the development of no-cost web apps – a free view of news and information – towards a subscription-only model through its iTunes e-commerce platform. The updated iTunes subscription model is evidently not ready for primetime, resulting in delayed news service launches and publisher frustration.
The Wall Street Journal’s All Things Digital blog reported that Apple and News Corp have jointly agreed to delay the launch of an iPad-exclusive news service. Dutch publisher NRC Media wrote that Apple has given it and other content owners until the end of March to register its newspaper applications under a new set of requirements or face removal from the iTunes App Store.

The shift in Apple strategy is intended to transition free content app users to a subscription model that entitles Apple to a rumored 30% of fees received by publishers. Under the current free application model, Apple only generates revenue from those implementing the company’s iAd service.
Clearly, the change benefits Apple. Will publishers, content owners, and consumers go along quietly? ABI Research believes that the largest publishers are supportive of the Apple initiative; however, smaller publishers, independent publishers and end-users could struggle with the change. Some will go along with the business model change, while others will migrate to greater use of the web browser to overcome the restriction.​
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Who Wins with a Faster Network?

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

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Verizon's network based on CDMA technology is not as fast from a pure technology standpoint as HSPA 7.2 networks - like AT&T's. Based on utilization, average speeds will vary but on average AT&T's HSPA network is faster than Verizon's 3G CDMA network.

AT&T is using this difference to differentiate itself from Verizon, particularly now that VZ will soon have the iPhone. Highlighting this difference is a wise move by AT&T for both customer acquisitions but also for customer retention.

Interestingly, a slower networkhelps Verizon manage overall utilization. Why - customers will simply not use their phone as much if they are not receiving data fast enough. This may seem trivial but anyone on a PC knows that if a video does not load fast enough or is constantly stopping and starting, you quit viewing the video. The same affect occurs with mobile. Measuring this affect on network utilization is hard to do - but it can help manage customer mobile data usage.

Who wins with a faster network? If greater utilization does not create overall network problems,a faster network is desirable. But if themajority of application usageon a slower network is acceptablefrom a user's perspective, thena slightly slower network will not harm customer adoption and retention and offer some network utilization benefits.

At some point it will be interesting to see a comparison of application speeds foriPhone used on the Verizon 3G CDMA network and AT&T's HSPAnetwork. Then based on the results - who wins......or does it really matter with both operators moving to 4G.​

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iPhone Impact on Verizon's Network?

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

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Some of the buzz on release of the iPhone on Verizon's 3G network is the impact it will have on its network. Will Verizon experience the same network overutilization issues as AT&T when the iPhone was released on their network? The simple answer is not likelyand the simple reason is Verizon has learned from AT&T and is prepared for this data hungry device. More specifically the reasons are:

  • Verizon's 4G network will remove some load from the 3G network. This is initiallyfrom 3G laptop connect subs upgrading to 4G connections. Verizon 3G laptop subs consume much more data thaniPhone customers.
  • The iPhone boost to total Verizon smartphone subs will be incremental - no number is availabe but Verizon is expected to add even more smartphone subs in 2011 than it did in 2010 and most will be with data hungry devices such as the iPhone or Android smartphones
  • Android smartphone adoption would have replaced iPhone adoption if the iPhone was not launched onthe VZnetwork. We anticipate VZ is prepared for large increases in its smartphone base regardless of the smartphone brand.

But Verizon will need to be diligent and they have the tools to address network data usage. Release and promotion of a 4G smartphone willremove traffic from the3G network assuming 3G users switch to 4G devices. Promotion of certain Blackberry devices is another option as traditional Blackberries tend to be more network friendly devices.Smartphone pricing is another factor with higher priced smartphones less likely to go into the hands of younger users who will use the smartphone like they use the PC or desktop - consuming all sorts of multimedia. Applications - one application which can drive up usage significantly is video calling and video sharing. This is an app that has the potential to take offassmartphone and media tablet penetration increases.

But it takes just one market with network problems to create a marketing nightmare.​

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G Whiz: Marketing Claims Distract from Actual 4G Progress at US Carriers

Jan 10, 2011 12:00:00 AM / by Admin

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During its developer conference at International CES 2011, AT&T joined T-Mobile US in marketing hijinks by rebranding its HSPA+ network as “4G”. Going into the last quarter of 2010, T-Mobile had previously launched a marketing campaign claiming its latest UMTS network, based on the HSPA+ protocol, was faster than the deployed 4G technologies and therefore the largest and fastest 4G network in the country.

Complicating matters further, AT&T detailed its 2011 “4G” roadmap with 5 to 7 new HSPA+ “4G” devices expected to launch during the first half of 2011, and 13 to 15 additional launching during the second half of this year (with an emphasis, but not necessarily exclusively, on LTE devices).

The operators’ claims have been lambasted by the technologists developing the standards and equipment. Those yet to be impacted are the subscribers that made decisions to switch providers, devices and budgets as a result of the campaigns. Do individuals care? I think so. On a taxi ride back to my hotel during CES, the driver asked what 3G and 4G meant. And what is the difference between the two?

Expect consumers and business decision-makers alike to become increasingly cynical as the marketing continues. Will we see Verizon Wireless, Sprint and US Cellular join these crafty marketers any time soon? Oh wait – those three operators along with Clearwire are actually deploying 4G networks!​

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