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ABI Research Blog (97)

GSM handset market has reached its zenith

Jan 8, 2012 12:00:00 AM / by Admin

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The era of the GSM handset have reached its zenith, as 3G and 4G handset sales have captured more than 50% of the total handset market. Not only that, year-on-year percentage growth for GSM drops to zero in 4Q-2011 and thereafter GSM handsets shipments are anticipated to go into decline.

It is very much an historic moment. It means not just mobile phone users in Developed Markets but also Emerging Market end-users are purchasing 3G handsets, 3G smartphones and connecting to the internet.

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Lowe’s Joins Best Buy in Smart Home/Home Energy Market

Jan 5, 2012 12:00:00 AM / by Admin

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As I mentioned in a recently-published Insight, 2011 saw a spate of well-documented forays into the home automation/home energy markets by service providers such as telcos, cable operators, security companies and more recently, utilities. However, today’s news that US home improvement giant, Lowe’s, will sell home automation kits from UK-based SaaS provider, AlertMe, shows that retailers are increasingly looking to enter this emerging marketplace.

Back in in September of last year, Best Buy launched home energy zones in three of its stores to demonstrate a home energy management technology from GE. The company also sells the Nest Learning Thermostat, which made the headlines the following month. However, the media frenzy that followed the officiallaunch has already whipped up considerable consumer interest causing the device to sell out.
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The Durbin Effect - Contactless Payment Cards In The US

Jan 4, 2012 12:00:00 AM / by Admin

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I wanted to take this opportunity to discuss the state of the contactless payment card market in the US and expand upon a recent insight authored by Group Director John Devlin – US Cap on Debit Fees Impacts Both Bank Card and NFC Markets.

From the latest market data which we collect from card and IC manufacturers, it has become apparent that 2011 contactless payment card shipments in the US have dramatically dropped when comparing against quarterly shipments achieved in 2010. The drop in shipments has primarily been driven by two overriding factors:

The Durbin amendment was passed in July 2011, capping interchange fees. As a result MasterCard and Visa responded, pulling their discretionary discounts allowed on low-value transactions, giving merchants no incentive for accepting cards for low value transactions, directly affects contactless payment cards.
As a result of an uncertain US economy many credit card companies dropped card promotions, which directly affected demand.
Any possible move to EMV (present or future) could see further hits to pure contactless numbers with banks potentially redirecting or deferring investment away from pure contactless cards in favour of dual interface chip cards offering both contact and contactless capabilities.
Falling shipments became apparent in Q2, before the Durban amendment was passed, but as a result of speculation surrounding the amendment and the state of the economy at the time. Many IC and smart card vendors thought this would be a short-term dip with a recovery expected in Q3. Q3 came and shipments remained lower than Q3 2010. Now deep into Q4 we can only speculate how final year shipments will compare and if any sort of recovery has taken place. ABI Research remains skeptical and believes the dip in shipments will continue into 2012 with a possible recovery being seen mid-year.
The US is the world’s largest payment cards market and any drop in shipments (even by a few percent) could mean millions in terms of units. The affect created by these two drivers are being watch very closely by both smart card and IC vendors and is a clear example of how a new or up and coming technology can be affected by legislation and a sensitive/recovering economy.
ABI Research’s Security & Identification Research Practice will be continually tracking and keeping a close eye on developments in the US payment cards market. Look out for an Insight in early Q1 where I hope to provide an update on shipments and any amended forecast data along with ABI Research’s view of the market and likely outcome.

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Telematics has the Key to a New Market

Jan 4, 2012 12:00:00 AM / by Admin

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​There are many new businesses popping up to facilitate car sharing. Some (e.g. Wheelz, RelayRides, Getaround) are designed to allow existing car owners to rent their own vehicles when they would otherwise be sitting idle.

Some OEMs are also involved in supplying what is effectively a new form of rental fleet. Mercedes-Benz has Car2Go; BMW has DriveNow; VW recently launched Quicar; Ford partnered with Zipcar on university campuses.

It seems like the start of a new business model that has the potential to change the nature of vehicle ownership. And all the above examples are reliant on telematics and smartphones to manage use and provide some security.

One company that tried to do it the old-fashioned way was HiGear. Sharing the cost of owning luxury cars is a great idea and proved very popular, but now professional car thieves have effectively forced the owners to close the business. For more details on this story click here.

Telematics is moving from nice-to-have to must-have in many areas, particularly in solving the range anxiety issue for electric vehicles, and it is now the backbone for a new business opportunity that in the long term may help provide an alternative solution for transportation within Smart Cities.

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Gemalto Acquires SensorLogic

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

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Gemalto, the world leader in digital security, today announced that it has acquired SensorLogic, a machine-to-machine (M2M) cloud-based platform vendor. Commenting on the transaction, Oliver Piou, Gemalto Chief Executive Officer noted: “With M2M, we continue to replicate our successful business model. Starting from advanced software embedded in a device, we add remote management and then application support to provide superior performance and differentiation to our customers.” Norbert Muhrer, Cinterion’s CEO, added “SensorLogic is a perfect fit for our M2M business. With SensorLogic, we are taking complexity out of M2M deployments thus clearly adding value to our clients”.

Founded in 2002, SensorLogic was an early pioneer in delivering a cloud-based, wireless, M2M service delivery platform to the market. Since its inception, the Company has remained exclusively focused on delivering platforms for M2M applications. Its scalable platform-as-a-service (Paas) software which powers a myriad of M2M applications is referred to as 'M2M 2.0'.
Gemalto, due to its leading position as a SIM card provider, has a strong presence in the “mainstream” cellular industry. M2M has been part of its ongoing plans to grow its footprint in the cellular communications market. This acquisition, alongside its 2010 purchase of Cinterion , should position Gemalto to offer an end-to-end M2M solution. Moving towards a platform strategy is a key move to gain a foothold in the M2M industry. One such case came about in early 2011 when Ericsson bought Telenor’s M2M platform , allowing Telenor to focus its attention to a service oriented strategy within the M2M markets.

A key point to note would be how Gemalto, leveraging on its strengths in security solutions, embed its expertise right up to the platform level. This comes at the back of growing prominence on security issues in the various M2M markets such as smart metering , mobile payments and telehealth in which security is vital for these verticals to flourish.
For additional information on the M2M eco-system, please refer to the variety of products in our M2M Research Service .

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CPUC Home Area Network Mandate

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

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In response to California Public Utilities Commission (CPUC) mandate on a Home Area Network (HAN) Implementation Plan, Pacific Gas & Electric (PG&E), a major Californian utility, has submitted its implementation plan in early December 2011 for review. The pilot deployment of 500 customers will use software from Silver Spring Networks (SSN) and home energy dashboards from Control4. PG&E’s plan will be rolled out in three phases - Initial Rollout Phase, Early Adopter Phase and Mass Market Phase.

The first “Initial Rollout Phase” will use 500 HAN devices provided to 500 volunteer and employee customers starting on March 1, 2012. If this first phase gains sufficient customer and vendor support through assessment of the customer experience and third-party market developments, PG&E will roll out its second stage, “Early Adopters Phase” in early 2013. This opens up potential participation to up to 5,000 customers who can purchase and register their own HAN devices from a multitude of third party vendors. Finally, if the Early Adopters Phase is successful and the third-party HAN device market has developed sufficiently to support broader deployment, PG&E will seek to open up its HAN platform to all third-party HAN devices that meet PG&E’s certification and registration standards beginning in 2014 (Mass Market Phase).

Although SSN and Control4 have been selected as partnering vendors for the initial phase, the mandate has also indicated that PG&E and its counterparts have to open their HAN platforms to all third-party HAN devices that meet the utilities’ certification and registration standards. As most devices in the market are still only SEP 1.0 compliant, the initial platform will be running on SEP 1.0 until later versions of SEP 1.1 and the eventual ratification of SEP 2.0 make it possible to run all platforms and devices at SEP 2.0. However, there is still uncertainty about how the standards and the market will evolve in the longer term, especially with regards to moving SEP 2.0 into an independent organization. In addition, more finalized versions of the SEP 2.0 specifications (0.9 and 1.0 versions) require successful interoperability testing among HAN devices from multiple vendors, which creates uncertainty around the timeframe for the finalized specification.

For additional information on the eco-system of WSN and Home Automation, please refer to the variety of products in our HAS Research Service and WSN Research Service .

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A Strategic Acquisition - Linear Technology Acquires Dust Networks

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

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On 20th December 2011, Linear Technology Corporation, a leader in high performance analog integrated circuits, announced the acquisition of Dust Networks, Inc., a leading provider of low power wireless sensor network (WSN) technology. With the growing importance of machine-to-machine (M2M) communications to enable remote data acquisition, low power wireless sensing is an emerging solution for many end-markets, including industrial process control, building automation and data center energy management.

Founded in 2002, Dust Networks is a pioneer in the field of wireless sensor networking. Using standards-based network technology, Dust’s broad portfolio includes SmartMesh IP, SmartMesh Industrial/WirelessHART™ and ZigBee. It also provides complete wireless systems solutions, including IEEE 802.15.4 mote modules, mote-on-chips and network and security management software and hardware. SmartMesh networks comprise a self-forming mesh of nodes, or “motes,” which collect and relay data, and a network manager that monitors and manages network performance and sends data to the host application. This technology is now the basis for a number of seminal networking standards. Linear Technology Corporation’s products provide an essential bridge between the analog world and the digital electronics used in industrial, communications, networking, automotive, computer, medical, instrumentation, military, aerospace, consumer end-markets and other harsh environment systems. Linear Technology produces power management, data conversion, signal conditioning, RF and interface ICs, and μModule subsystems.

Dust Networks has strong relationships with customers such as GE and Emerson, and green companies such as Vigilent and Streetline Networks. Its technology can be found in a variety of monitoring and control solutions, including data center energy management, renewable energy, remote monitoring, and transportation. If integrated well into Linear’s portfolio, Linear can offer a complete high performance WSN solution. Also, Dust Networks’ low power radio and software technology complements Linear’s strengths in industrial instrumentation, power management and energy harvesting technology.

ABI Research has published a report on Industrial Wireless Sensor Networks , outlining market trends in WSN within the industrial automation industry. For additional information on the WSN eco-system, please refer to the variety of products in our WSN Research Service .

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2011: A Good Year for iControl Networks

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

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It’s been another good year for Software as a Service (SaaS) provider, iControl Networks, which has continued to add to an already an impressive list of home automation deployment partners. This unusually extensive blog post follows on from my soon-to-be published Insight reviewing the major developments in the market for home automation as a service and summarises some of the key goings on with iControl's partners during the year.

One of the company’s earliest and perhaps most notable deployment partners is ADT Security Services, the largest security provider in North America. Whilst the company selected iControl technology for its Pulse product back in 2009, the service wasn’t launched until October 2010. Since then, details of take rates have been sketchy at best, although Edward Breen, the CEO of ADT’s parent company, Tyco International (which has provided funding for iControl in the past), did offer some insight earlier this year. Breen stated that Pulse systems being sold by ADT’s direct sales team are being taken by “15% of customers”. Curiously, no mention was made of Pulse customers signed on by members of ADT’s dealer network (which is estimated to account for around half of all new residential accounts). Furthermore, Frontier Communications signed a resale agreement with ADT allowing it to offer the latter’s home security/automation packages beginning in November 2011 in its Rochester territory.
The latest security dealer to partner with iControl is C24 Interactive, a brand within Connect24, which, like ADT, falls under the Tyco Security Products Brand Portfolio. According to the press release at the time, “iControl will power an integrated solution that will enable the DSC Dealer and Central Station Monitoring partners to offer customers interactive home security and management features.”
With regards to iControl’s cable operator partners, Comcast Corporation began an aggressive expansion of the service area for its XFINITY Home Security service. After an initial trial in the Houston area of Texas in 2010, the company started rolling out in Portland, Philadelphia, Jacksonville, Sarasota, Naples, Nashville, New Jersey and Chattanooga during 2011. More cities are expected to be added to Comcast’s territories throughout 2012. Likewise, Time Warner Cable (TWC) has rolled out its “IntelligentHome” solution in upstate New York, Southern California and North Carolina. Given that Bright House Networks jointly tested a similar system with TWC during the summer of 2011, it would not be unreasonable to assume that it, also, is planning to deploy a solution based on the iControl platform in the not-too-distant future. Comporium Communications has also revealed plans to launch smart home management and security systems powered by iControl.
On the telco front, a key partner for iControl is Rogers Communications which launched its “Smart Home Monitoring” service in August 2011. The service, which has been marketed as "much more than just a home security system” is available in three packages: Home Basic, Home Essentials and Ultimate Home and each costs $39.99, $48.99 and $57.99 per month respectively (excluding upfront installation and equipment costs). On 26 October 2011, iControl signalled its intent to gain a foothold in the European market by announcing that it had entered into a partnership with Swisscom. The company intends to launch the “Smart Living” solution in the Swiss market during 2012 and will provide end-users with a starter kit that includes a base station, wireless sensors, energy module, door contacts and a web cam.
ABI Research will continue to provide incisive and in-depth analysis on all facets of the rapidly emerging home automation market and related areas throughout 2012. For more information on keeping up-to-date with developments in this area, please refer to the Home Automation Systems Service section of our website.

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Automotive Ethernet Opens the Door for the Next Generation Car

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

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​We recently published an Insighton the introduction of new technology from Broadcom that allows 100 Mbps communication in a vehicle over an unshielded twisted-pair cable. While the cost savings and improved design flexibility make this a worthwhile technology, the real benefit is the opportunity to overhaul the complete electronic architecture.

As electric vehicles come to market from many different OEMs, there is a combination of new companies and traditional automotive names looking to capture a share. Telematics is playing a prominent role in helping to overcome the buyer's fear of range anxiety with the shift to a new energy source via an infrastructure that is only just being rolled out.

However the massive increase in on-board automotive electronics is proving a challenge for the existing automotive configuration that has evolved slowly over many years. So far only BMW has discussed a radical new approach, with its i3 and i8 concept vehicles. Expect more on this in 2012...

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GM to Showcase Verizon 4G LTE Cloud Technology at CES 2012

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

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In a press release GM announced details about what new telematics technologies will be showcased and discussed by OnStar and Cadillac at CES 2012:

Cadillac CUE information and entertainment system including research methods behind the creation of CUE
OnStar 4G LTE cloud technology - cooperation with Verizon Wireless on content streaming including rear seat infotainment and video chat
OnStar FMV aftermarket rearview mirror – new features
OnStar RemoteLink and home energy management
A press conference will also be held.
The 4G LTE concept clearly points to GM’s ambitions to extend its traditional safety and security telematics offer to advanced infotainment based on high speed cloud services enabling rear seat infotainment and video-based communication. Cadillac CUE similarly is focused on entertainment complementing the OnStar safety and security system. And with Intellilink GM has already shown how infotainment can be brought into the car via smartphone integration.
However,GM's ultimate goal seems to be tooffer high bandwidth infotainment as an embedded feature, maintaining its strategy of offering reliable and robust solutions known from OnStar and differentiating it from cheaper but less dependable hybrid solutions such as Ford SYNC. However, it will be interesting to see at what price GM will be able to offer broadband infotainment to the car owner. Maybe multi-device data plans will come to its rescue – just in time.

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