Over the past few months, I’ve developed market data for several network infrastructure projects. It’s made me wonder where all this is going.
- The market for business broadband connectivity is very robust. In recent interviews I learned that network fiber and cabling equipment and services are a growing market despite the hype around mobile.
- Ethernet/fiber upgrades are big business. Cablecos are quick to tell me that coax isn’t the only game in town…many offer high-capacity Ethernet/fiber solutions with aggressive pricing vis-a-vis telcos.
- Nearly all kinds of devices with embedded micro-controllers (telematics, smart home meters, industrial control systems) either now have or will have network interfaces. Many are mobile and wireless.
- Mobile apps for smartphones and tablets (Android, iOS, etc.) are exploding. Just like most businesses and organizations now have web sites, they will soon have to have a mobile app and QR code.
- Enterprise IT is struggling with the BYOD (bring your own device/data) trend: workers increasingly want to connect with enterprise private networks using their own smartphone or tablet.
- Industry players tell me the that IP convergence is but one key driver for data infrastructure solutions: ”many touches in lots of places” is the new mantra.
It seems like the wired/wireless trends are pulling in opposite directions. By any measure, the mobile app space is growing exponentially and displacing enterprise desktops – IDC predicts that mobile will surpass wireline by 2015. At the same time, worldwide demand for wired broadband and cabling plant upgrades is also strong despite a weak global economy. There are even reports of spot shortages of fiber cable.
The wired side reflects corporate cap ex, which suggests corporate planners see a continued need for copper and fiber plant, despite a paradigm shift at the edges. The user side is driven by consumer trends, including a new generation of workers who use smartphones and feature-phones more like appendages than accessories.
While BYOD has a lot of headaches, notably security, it offers enterprise IT a potential bonanza. The total cost to provision, support, and maintain a fleet of tens of thousands of PCs can be staggering. With BYOD, much of this can be shifted to the users.
Mobile apps are increasingly content-rich and location-aware, driving increased demand for high capacity infrastructure to service a burgeoning number of users. If BYOD adds to this trend, demand for wireless infrastructure, especially at the edge, will ramp up sharply.
But what stands behind the wireless access points? Fast and high capacity cabled networks, which in turn must connect to broadband backbone provided by regional and national carriers.
The only weak spot in all of this seems to be in the demand for traditional desktop computers and software. In my work, I use a lot of spreadsheets on a Windows workstation with two wide screen monitors to bring it all together. Although I love my iPhone, I don’t see any way that I could do my research analysis with it. I’m sure millions of other desktop users wouldn’t be able to get their work done on a smartphone or a tablet. Extrapolating from this completely unscientific sample, my guess is that PCs will be a stable market (the classic BCG “cash cow”) and the mobile side will grow rapidly (the BCG “star”).
In any case, the future of network infrastructure space looks well-lit. It will be a long time before fiber cable spools are the 21st century’s buggy whips.
The approach I used was to develop a bottom-up market forecast for each of the twenty major device types aggregated into a data-driven forecast for the component’s total addressable market.
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With the introduction of 3D TVs in early 2010, TV manufacturers hyped the new technology with the hope of stimulating consumer demand. Yet annual sales of 3D-capable TV sets were lukewarm at best. It is estimated that 3.4 million 3D sets were sold worldwide in 2010, accounting for just 1.2% of the total worldwide flat-panel TV shipments.(1) Samsung Electronics estimates 1 million 3D sets were sold in the US in 2010, abysmally short of the 3 million to 4 million the company initially forecast. Fewer than 1% of US households have a 3D-capable HDTV, while 61% have at least one high def TV set.(2) Mass-market consumers were put off by the heavy glasses, big price tag, and lack of decent content.
But the major players still see depth. At this year’s Consumer Electronics Show, practically every HDTV manufacturer announced that 3D is a big deal for them in 2011. A slew of new product offerings is aimed at shutting down the skeptics and naysayers.
- New technology glasses. TV manufacturers like LG Electronics and Vizio, among others, introduced light polarized 3D glasses, called passive glasses. But they only work with LCD TVs that have an extra layer to the screen. Panasonic is sticking to active glasses, which are bulky, pricey ($150 a pop) glasses that produce a 3D image by using LCD lenses to rapidly dim one lens, then the other, so your eyes see slightly different images. Further out, Toshiba has developed an “autostereoscopic” consumer 3D TV, which requires no headgear. But the sets are considerably more expensive compared to glasses-based 3D TV and require that viewers sit fairly still – tough in a home environment.
- Aggressive pricing. For most of 2010, you couldn’t buy a 3D TV for less than $1300 for a 40-inch set. Between the set and the glasses, consumers were looking at spending $600 more for a 3D set than a comparable 2D-only set. In 2011, Panasonic, Vizio, Sony, LG, and Samsung all are releasing 3D TVs at many price points. Even a bargain-basement consumer will have no problem buying a new 3D TV.
- More content. TV manufacturers and broadcasters are ramping up their 3D content. The 3D network joint venture of Discovery Communications, Sony and IMAX announced “3net”, a 24-hour 3D channel set to debut in early 2011. HBO is launching its 3D video-on-demand service with Comcast and Verizon’s FiOS TV among its takers. Sony and two TV broadcasters are introducing Japan’s first 3D drama series.
The 3D TV market penetration rate is forecast to grow from 5% of total flat panel TVs in 2010 to 37% in 2014.(3) Buying a 3D HDTV set-up today is an expensive and potentially risky proposition. Gary Shapiro, president and CEO of the Consumer Electronics Association, said there was still much consumer confusion surrounding 3D TV. What will it take to sell the next wave on 3D?
(1,3) DisplaySearch; (2)Leichtman Research Group
