Thursday, June 3, 2010

Cisco VNI forecast reveals global IP traffic to increase fourfold by 2014

USA: Cisco announced the results of the Cisco Visual Networking Index (VNI) Forecast and Methodology, 2009-2014, which projects that global IP traffic will continue to be dominated by video - exceeding 91 percent of global consumer IP traffic by 2014.

Improvements in network bandwidth capacity and Internet speeds, along with the increasing popularity of HDTV and 3DTV are key factors expecting to quadruple IP traffic from 2009 to 2014.

* The Cisco VNI Forecast, which focuses on two primary user groups—consumer and business users, was developed as an annual study to estimate global Internet Protocol traffic growth and trends. Projections are based on Cisco analysis and modeling of independent traffic, usage, and device data.
* To help network users better understand global IP traffic growth drivers and trends, Cisco updated several of its unique resources:
* The VNI forecast widget provides customized views of the growth of various network traffic types around the globe (revised for this 2009 - 2014 forecast period)
* The VNI PC Pulse” application for desktop and laptop computers helps consumers learn more about their individual impact on IP networks and compare network usage with others around the world.

Research Highlights:

Primary Growth Driver: Video
* By 2014, the sum of all forms of video (TV, VoD, Internet video, and peer-to-peer) will continue to exceed 91 percent of global consumer traffic.
* Global Internet video traffic will surpass global peer-to-peer traffic by the end of 2010. For the first time in the last 10 years, peer-to-peer traffic will not be the largest Internet traffic type.
* The global online video community will include more than 1 billion users by the end of 2010. This number is exceeded only slightly by the populations of China (1.3 billion) and India (1.1 billion), making this user group equivalent to the third-largest country in the world.

Total Global IP Traffic in “bytes”
* Technically speaking, global IP traffic is expected to increase more than fourfold (4.3 times growth) from 2009 to 2014, reaching 63.9 exabytes per month in 2014, up from approximately 56 exabytes per month for 2013. This is equivalent to nearly 766.8 exabytes per year - approximately three-quarters of a zettabyte by 2014.

Global Total Internet Traffic
* By 2014: the global Internet will be 4 times larger than it was in 2009.
* By 2014: the following traffic equivalents will cross the global Internet each month -- 11.8 billion DVDs; 15.7 trillion MP3’s; 295 quadrillion text messages

Global Consumer Internet Traffic
* Driven by video, Internet traffic will more than triple (from year-end 2010).

Consumer vs. Business
* By 2014, consumer IP traffic (web surfing, instant messaging, user-generated videos, etc.) will represent 87 percent of monthly total global IP traffic; while business IP traffic (email, voice, Internet, HD and web-based video conferencing, etc.) will represent 13 percent of monthly total global IP traffic.
* For 2009, consumer IP traffic represented 79 percent of monthly total global IP traffic and business IP traffic was 21 percent of monthly total global IP traffic.

3DTV and HD (Advanced Video)
* Globally, advanced video traffic, including three-dimensional (3D) TV and high-definition (HD), will increase 13 times between 2009 and 2014.
* By 2014, 3D will account for 4 percent of total Internet video traffic.
* By 2014, 3D and HD video will comprise 42% of total consumer Internet video traffic.

Mobile Broadband
* Global mobile data traffic will increase 39 times from 2009 to 2014.
* By 2014, annual global mobile data traffic will reach 3.5 exabytes per month (or a run rate of more than 42 exabytes annually).

Global IP Traffic Trends
* By 2014, the highest IP traffic-generating regions will be North America (19.0 exabytes per month), Asia Pacific (17.4 exabytes per month), Western Europe (16.2 exabytes per month) and Japan (4.3 exabytes per month).
* The fastest-growing IP traffic regions for the forecast period (2009 – 2014) are Latin America (51 percent CAGR, 7.9-fold growth), the Middle East and Africa (45 percent CAGR, 6.5-fold growth), and Central Europe (38 percent CAGR, 5.1-fold growth).

Network Speed Enables IP Traffic Growth: 2000 vs. 2010 Comparison
In just a decade, the average global residential Internet connection download speed has increased 35 times, which has helped to dramatically increase Internet usage.
In 2000, the average global residential Internet connection download speed was 127 kilobytes per second (Kbps). The current (2010) average global residential Internet connection download speed is 4.4 megabytes per second (Mbps.)

AT&T divests its domestic Japanese business

Claudio Castelli, Senior Analyst and Mike Sapien, Principal Analyst, Ovum.

JAPAN: AT&T has announced that it will sell its domestic outsourcing services business in Japan to Internet Initiative Japan (IIJ). The company is looking to reduce its focus on domestic customers in Japan, where it faces competition from well-established local players, and concentrate on its MNC customers and global services. Like its announcement to sell Sterling Commerce to IBM, this is another example of AT&T shedding some businesses to tighten its focus on certain MNC customers and prospects.

Narrowing the focus on MNCs
This recently announced deal with IIJ didn't come as much of a surprise to us. A rumor emerged last December that AT&T was going to sell off the Japanese outsourcing unit, which was previously acquired from IBM. Such a move is well-aligned with AT&T's plans to focus its international operations on certain MNCs rather than domestic business in countries outside the US.

AT&T’s strategy for global services over the past three years (and continuing in 2010) has been to focus on a segment of MNC customers where it can be more competitive and profitable, and to increase spending by each of these customers with AT&T in order to create a longer-term relationship.

These customers also tend to have significant US operations, which provides AT&T with the opportunity to leverage its own network to benefit from lower access costs. According to AT&T, while this approach has resulted in an 80% decrease in the number of customers supported (outside the US) since 2006, it has also doubled total revenues and increased the number of connected sites by more than 50% during the past two years.

The sale does not involve AT&T’s global infrastructure for MNCs in Japan, which includes four global network service nodes, remote access infrastructure, an Internet Data Centre, and international subsea cable capacity. Through this acquisition, IIJ will be mainly assuming or taking over local WAN services, which are provided to approximately 1,600 domestic corporate customers.

Shifting the priority to emerging markets
AT&T has been concentrating its investments and efforts on markets with higher potential for growth, such as India. This divesture seems to be just another step resulting from a change in its market investment priorities and continued MNC profiling.

Back in October 2007, AT&T decided to combine its 12 Asia-Pacific markets and Japan into one region under a new organization, downgrading Japan's previous status as a region. At the same time, India became a separate region for AT&T under a new organizational structure, reflecting the growing importance of this market.

In spite of recent major regional MNC deals in Japan, such as Sumitomo Chemical and Nippon Yusen Kabushiki Kaisha, the Japanese market doesn't present great potential for growth. Japan will continue to be an important market and AT&T will continue serving MNCs there; however, this reduced local presence will affect its capability to attract Japanese-headquartered MNCs, which may be an acceptable trade-off for AT&T.

The agreement creates a network partner and wholesale customer
One of the major by-products of this agreement is the creation of a new wholesale customer for AT&T. IIJ should also be a large Japanese wholesale customer, with requirements for global network and external reach into other regions, which AT&T can provide – especially back to the US.

Furthermore, given the announced sale price for the business (versus the revenue), this divestiture should improve AT&T’s bottom line in the region.

3G migration means different evolution path to China’s operators

MELBOURNE, AUSTRALIA: According to a new report from Ovum, the global analyst and consulting company, in order to continue the strong mobile revenue growth seen in China, operators are driving 2G to 3G migrations in saturating urban markets. In the medium term, 3G mobile data and value-added services are the path to urban revenue growth.

In its “3G migration strategies in China” report, Ovum predicts 3G connections will increase to 69 million in 2010, due to ambitious 3G subsidy plans by the three mobile operators. 3G connections will then grow at a CAGR of 160 percent from 2010 to 2014. “We expect 3G connections to make up around 40 percent of overall mobile connections by 2014”, explains Tracey Chen, Senior Analyst at Ovum.

In particular, the report predicts that connections will move to 3G faster in urban regions, leaving a higher proportion of 2G users in rural areas. Ovum expects overall 2G connections to continue to grow over the next three years, reaching 768 million in 2011. After that, 2G will decline gradually due to migration to 3G, as seen in Figure 1 attached (based on connections).

“Operators will need to rethink their 3G data pricing to achieve their ambitions. The three mobile operators should differentiate their migration strategies by leveraging their respective capabilities”, said Tracey Chen, based in Beijing.

China Mobile’s primary imperatives are retaining lucrative 2G users, capturing enterprise users through simple and low-priced mobile services, and accelerating the maturity of the TD-SCDMA ecosystem.

For China Telecom, it is necessary to capture new mobile users by offering fixed/mobile service bundling in both residential and enterprise segments, and to pay more attention on launching low to medium prices for CDMA2000 handsets to appeal to low-spending users.

China Unicom is aiming to attract high-end users by offering popular handsets, favorable price packages and appealing loyalty plans, as well as using WCDMA’s scale to drive its handsets into the medium to low-end market.

In the medium term, new business models and revenue sources will also emerge to aid 3G growth. Relevant value-added services include application stores, mobile advertising, and mobile-payment services.

Although operators are launching application stores of their own, the application stores offered by handset providers will change the ecosystem for mobile content and threaten the leadership of operators in this area. However, we believe it is in the interests of participating parties, including content providers, ISPs, operators, and handset providers, to form partnerships to improve growth prospects.

CDG announces Device Corner online marketplace for smart wireless modules and devices

SHANGHAI, CHINA: The CDMA Development Group (CDG) (www.cdg.org) today announced a new initiative intended to enable the growth of machine-to-machine (M2M) communications via an online marketplace for smart wireless modules and devices.

The free Web-based portal, called Device Corner (www.devicecorner.com), will allow buyers and sellers to exchange information about CDMA2000 and multi-mode modules and devices, including integrated solutions. The CDG is encouraging module providers, system integrators and resellers to sign up on the pre-launch site immediately to assist testing and to develop a large selection of products for the official Device Corner launch, expected later in 2010.

"Since forming our M2M Special Interest Group in 2009, the need for a one-stop shop for smart wireless devices has become abundantly clear," said Perry LaForge, executive director of the CDG. "Our members are looking to take advantage of widespread CDMA2000 1X and EV-DO networks and services, as CDMA will be an enabling technology for these connected devices in a variety of industries."

Device Corner will allow registered sellers to post information about products for free, and permit potential buyers to view that information without registration. If a viewer finds that a module or solution will fit his unique needs, he would complete a simple and free registration before receiving information about contacting the seller.

Likewise, registered buyers may post information about their unique needs and solutions providers can obtain more information via the same registration process. The CDG will not charge for the use of Device Corner or sales made as a result of its use, recouping all costs of operation from sponsorships of the portal.

The market for connected devices is expected to grow significantly over the next decade, prompting industry leaders such as Ericsson to lend their support for the CDG-led M2M marketplace.

"We predict that the number of mobile broadband users will increase from the current 400 million to about 3.5 billion by 2015 due to massive increases in data growth," said Rima Qureshi, senior vice president and head of the CDMA business unit for Ericsson.

"With such a rate of mobile broadband uptake, we envision that in 10 years there will be 50 billion connected devices - anyone and anything that needs a connection will have one - providing exciting opportunities for consumers, society and for our industry in making the all-communicating world a reality. Vehicles such as Device Corner will allow module solution providers from all over the globe to collaborate and meet the needs of each unique vertical market or application."

Enterprise spending on carrier Ethernet services will top $37 billion over five years

BOONTON, USA: US enterprises and consumers are expected to spend more than $37 billion over the next five years on Ethernet services provided by carriers, according to a new market research study from The Insight Research Corp.

With metro-area and wide-area Ethernet services readily available from virtually all major data service providers, the market is expected to grow at a compounded rate of almost 25 percent, increasing from $3.1 billion in 2010 to reach nearly $9.7 billion by 2015.

According to Insight Research's market analysis study, "Carriers and Ethernet Services: Public Ethernet in Metro & Wide Area Networks, 2010-2015," the economic recession that emerged in late 2008 has not dampened US enterprises appetite for Ethernet service.

Insight is projecting the surge in demand will peak by 2011 as the economy improves Ethernet revenue growth rates hit 29 percent on a compounded annual basis. Ethernet services are marketed under various names: transparent or native LAN, Ethernet, Gigabit Ethernet, GigE, metro Ethernet, Ethernet private line, Ethernet virtual private line, Layer 2 virtual private network, Ethernet access, and virtual private LAN service.

"The momentum behind retail sales of Ethernet services to the enterprise is being driven by the customer's steadily increasing demand for data bandwidth and Ethernet's real cost advantages in terms of providing flexible bandwidth and scalability that is superior to many competitive services," says Robert Rosenberg, president of Insight Research.

"The driving force behind wholesale Ethernet sales is improved interoperability among carriers, greater confidence in emerging and recently adopted standards, as well as shifts by more carriers to a more wholesale-friendly posture," Rosenberg concluded.

Fibre Channel switch market segments post mixed results in Q1

REDWOOD CITY, USA: A recently published report by Dell'Oro Group indicates that the main segments of the Fibre Channel Storage Area Networking market posted mixed sequential results in the first quarter of this year with increased Fibre Channel switch revenues and lower Fibre Channel Host Bus Adapter (HBA) revenues.

According to the report, a mix shift to more expensive director-class, or modular switches, was a key driver of the switch revenue increase.

"The strong Fibre Channel switch results were surprising for a couple of reasons," said Seamus Crehan, Vice President of Dell'Oro Group.

"First, the market showed stellar results in the fourth quarter of 2009, and we did not anticipate this continuing into the first quarter. Second, the first quarter of the year tends to experience some seasonal softness. Despite these factors, the switch market increased more than 20 percent over the first quarter of 2009," added Crehan.

The report indicates that despite the strong pull-back in HBA sales during the first quarter of this year, 2010 revenues are expected to post robust growth.

Wednesday, June 2, 2010

Innocomm delivers first Android 3.5G smartphone with Telegent mobile TV

TAIPEI, TAIWAN: At Computex Taipei 2010, Telegent Systems, the company that makes television mobile, and Innocomm, a Taiwan-based provider of broadband wireless solutions, announced the introduction of the first 3.5G touchscreen smartphone based on the Android operating system to incorporate Telegent mobile TV technology.

The Innocomm Shark, which features a 3.2 inch WVGA (800x480) display, capacitive touchscreen, 8 megapixel autofocus camera, 3.5G connectivity, Wi-Fi and analog TV, is designed to address the growing interest in feature-rich touchscreen smartphones while entering the category at a price significantly lower than current comparable models.

According to Gartner Dataquest, the smartphone market is expected to grow by nearly 50 percent in 2010 and 2011, outperforming basic handset growth over the next five years.

Innocomm is among a growing number of mobile device developers to build in Telegent's free-to-air mobile TV technology as a competitive differentiator. The Shark's analog TV feature provides consumers with mobile access to the same free-to-air television programming that they view on conventional TV sets, delivering ready access to news, sports and other preferred programming while on the go.

The handset's large, high quality display combined with touchscreen controls allows for a high quality viewing experience. The model also incorporates the ability to record TV clips to a microSD card. Innocomm plans to add digital TV capability to future models.

"We expect the phone's price and feature profile to appeal to operators seeking to add 3.5G Android smartphones to their portfolio and to leverage 3G as a strategic growth platform," said Paul Wang, President at Innocomm.

"The combination of analog TV with Android's feature-rich platform allows us to deliver both operator and consumer extraordinary value in markets in Asia, Latin America and parts of Europe."

Telegent has shipped more than 80 million mobile TV receivers since it first introduced its mobile TV solutions in mid-2007. The company will demonstrate its latest solutions for mobile devices at this week's event, June 1 – 5, at the Grand Hyatt Taipei, suites #1032 and 1033.

"Innocomm is well known for its quality and innovative designs," said Samuel Sheng, president and chief executive officer. "Innocomm's new model will provide carriers who are leveraging analog TV as a strategic differentiator to deliver a compelling offering in the high end smartphone category."