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Xbox and Apple TV – TV Boxes at Retail

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One of the big focal points in early 2007 has been the new media extender category. From Sony to Sling to Netgear to Linksys, everyone’s got some new retail device to network TV in the home. Without being able to focus on every gadget in a single post, I thought I’d check in specifically on how the Apple TV and Microsoft’s Xbox-cum-IP-set-top are faring. Do set-tops at retail work? How does retail compare to the operator channel? Continue reading

US Broadband Rank – Not as Bad as it Seems

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Link Hoewing has a phenomenally well-thought-out post over on Verizon’s Policy blog. Recently the Organization for Economic Cooperation (OECD) released a report stating that the US has dropped in rank from 12th to 15th in broadband penetration. This does not sound like good news, but the Verizon post goes into significant detail over why the statistic is not as bad as it seems.

I was hoping to add my own insightful commentary to the Verizon analysis, but the only thing I think worth adding is that there are plenty of other data points I’d like to know. Where was each nation ten or twenty years ago with regard to wired infrastructure? What investment is being dedicated to further the growth of broadband? How and where is government regulation working versus market-driven growth?

Here are the most salient points I took from the Verizon write-up. (See below.) Kudos to Link Hoewing for digging up and analyzing the data.

  • The broadband penetration stats alone do not take into account population densities. Take a look at the OECD graph above showing density overlaid on top of penetration rates. (Note: for the sake of layout space I took out the countries below the US in rank.) The U.S. is compared to some countries with much denser populations including Korea and the Netherlands.

  • If you compared US states with specific European Union countries, eight of the top ten in ranking would be American states.

  • Considering the combination of the absolute number of broadband-connected households in the US (56-58 million) and the maturity of the American economy, the US can and should continue to be a leader in the development of new broadband applications and content.

  • The US is among the most dynamic broadband countries in terms of platform competition.

  • The US is investing significant amounts of money in building out new broadband networks. (And I’ll add – significant amounts of money in upgrading the capacity of existing ones.) “In no other country in the world are fiber networks with up to 400 mbps capacity (and more) being deployed on a wide scale to homes but it is happening in the U.S.”

Continue reading

Light Reading’s FiOS Tracker

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I love Light Reading’s occasional FiOS Tracker feature. Phil Harvey is rather cheeky in his blog reporting and always adds in a dose of humor. For example:

“Verizon says four out of five FiOS users claim that they would recommend the service to a friend. We’ve since learned those same FiOS users would also recommend Trident.”

Check out all of the updates on Harvey’s latest FiOS post. Also among the stats, Verizon states that people are factoring FiOS availability into their home relocation decisions. Gee, seems like I’ve heard that somewhere before…

To Flash or Not To Flash

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SeaChange will unveil a Flash-based server at The Cable Show next month, and Cable Digital News has picked up on the discussion of where Flash fits into VOD roadmaps.

Like DRAM-based solutions, Flash hardware uses a solid-state architecture, and therefore enjoys the benefits of employing no moving parts. Both DRAM and Flash also offer cost advantages for power and cooling, a significant consideration for operators who are facing ongoing maintenance for their video servers.

I wanted a bit more detail on why Motorola chose DRAM over Flash for the B-1 Video Server, so I did some digging with the relevant business group. I found out first that Motorola seriously evaluated Flash and hasn’t ruled it out for the future. For now, however, there are reasons to stick with DRAM. Capacity and storage don’t scale as well with Flash as they do with DRAM, and currently there is no industry standard defining Flash interfaces or behaviors. No industry standard means that Flash customers could find themselves locked into a single memory vendor.

Comcast Earnings: What’s Good for the Goose…

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In reviewing Comcast’s earnings report, I couldn’t help but think of the saying, “What’s good for the goose is good for the gander.” It may not be quite the right analogy, but in the long-term relationship that is Comcast + Motorola, it certainly feels appropriate.

Despite a recent Wall Street Journal article suggesting that, “the long-term future of cable… is murky,” Comcast has proven that the short-term future at least is quite profitable. Comcast reported double-digit cable revenue growth including an 88% increase in digital phone revenues, a 21% increase in high-speed data revenues and an 8% increase in video revenues.

Higher revenues also meant higher amounts of spending in Q1 2007, and that’s of course where Motorola comes in. Cable capital expenditures increased more than 50% from Q1 2006, and as a major equipment provider for Comcast, that’s a very good indicator for Motorola. Motorola provides voice, video and data broadband equipment and expertise to Comcast. Good news all around.

 

Remember the Telecom Bust?

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When I moved down to Philadelphia in late 2001, the telecom market was on its way down. Way down. In 2007, however, iSuppli reports that telecom spending is up. Way up. Telecom companies are expected to spend nearly $41 billion on equipment this year. The annual jump from 2006 isn’t very high, only 1.6%, but spending rates rose 10.7% in 2006 and 8.3% in 2005.

The increased spending must come in no small part thanks to Verizon’s fiber deployments. Add to that new TV services from both Verizon and AT&T, and the skyrocketing popularity of AT&T’s DSL, and you’ve got a sense of why telecom spending is so high. And that’s not even taking wireless services into account!

The spending, however, does seem to be paying off. AT&T had a great quarter, and we’ll get a close look at Verizon’s financials in next week’s earnings call. More on the earnings season to come. Don’t forget to tune in to the Comcast call tomorrow morning.

The Set-Top: Open and Shut

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I’m still collecting my thoughts after reading the Wall Street Journal article this morning on set-tops followed by Paul Kapustka’s commentary over on NewTeeVee. WSJ reporter Bobby White analyzes how set-tops are growing up in the age of the digital living room – specifically how set-tops now include more innovative features and how the retail market compares to the service provider channel. NewTeeVee responds with a discussion on how and when the set-top industry will open up, making standalone competitors viable against the operator incumbents. Paul Kapustka asks, “Can the closed set-top box survive?”

I don’t think we’re looking at a question of open versus closed set-tops. I think we’re looking at how different set-top business models are going to exert pressure on each other. Yes, set-tops will continue to “open up”, both by integrating the Internet and by migrating to open standards like OCAP. And retail manufacturers will likely play an increasingly important role in driving set-top innovation. However, service providers will continue to wield considerable influence on how set-top applications are delivered.

Why? Because they control the networks.

No matter who makes the set-tops – whether it’s Motorola or Apple or TiVo – operators will play a crucial role in how successful they are because they control bandwidth and quality of service. In-Stat analyst Mike Paxton’s quote is not dated as NewTeeVee suggests. “In this business, if you want to play, you need to have some sort of relationship with one of the big operators.”