Market Analyst

In this age of mobility, people expect to be able to access and read information anytime, anywhere on the device of their choice. An eBook is a great example of this concept in play — hence the popularity of eBooks. eBooks allow publishers to go beyond the printed page and truly engage and stimulate the readers.

It is interesting that until now it was virtually impossible to find market research reports available as eBooks, especially when you consider that the market research business is no small potatoes. In fact, it is estimated to be more than a $34 billion a year business.

eBook reading devices such as tablet computers and “eReaders” from Amazon, Barnes & Noble, and Sony are becoming pervasive. The growth of eReaders and tablets, in particular, is driving the eBook market. According to Pricewaterhouse Coopers’ “Global Entertainment and Media Outlook,” in the U.S. alone “around 30 percent of adults had at least one portable reading device [an e-reader or tablet] in the first quarter of 2012.”

eBook reading can be done on smartphones which are rapidly replacing feature phones and are now the biggest segment of the mobile device market. Smartphones provide ease of access, removing the barriers of location and time for users of market research.

No wonder, eBook growth in the U.S. market has been pretty dramatic. The total spending on print trade books is declining, but the e-book market is growing fast enough to offset those declines. Pricewaterhouse Coopers’ projects that e-books will make up 50% of the trade publications market in U.S. by 2016.

In a bid to take advantage of this burgeoning market, we, at Market Analyst, are offering market research reports in both eBook formats — EPUB and Mobi. That makes us possibly the first market research distributor to offer this option of eBook reports.

This is no small deal because it’s somewhat easier to offer a typical book as an eBook, not to mention the resources companies such as Amazon have to ensure the quality of the eBooks, than to provide market research reports in eBook formats. One of the challenges with converting market research reports in eBook format has to do with maintaining the integrity of the reports, which tend to be filled with charts, tables and diagrams. Also, keep in mind that the economics of selling a typical book as an eBook are very different from offering market research reports in eBook formats, given that a market research report is usually purchased by a very limited number of buyers.

Market Analyst is  starting out by offering market research reports from three market research firms as eBook Reports. Not surprising all three market research firms are focused pretty much on the hi-tech industry:  Mind Commerce on telecom, Objective Analysis on the semiconductor market, and WinterGreen on a broad range of hi-tech areas.

We think that is a pretty exciting deal from a start-up market report distributor that can claim it’s already pioneered something different in its market.

Blogger: Sam Masud

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In an interview with Market Analyst, Erasmo Rojas, director of Latin America and the Caribbean for 4G Americas, stated last week that he expects Brazil to spearhead mobile broadband deployment in the region. Rojas said Brazil, the host of 2014 FIFA World Cup, will drive mobile broadband network deployment by offering high-speed mobile services, specifically 4G, during the competition for football’s most coveted prize.

Indeed, Brazil has already begun moving in that direction. Just last week, Anatel, the country’s telecommunications regulator, held auctions to dole out 4G spectrum for the rapid rollout of high-speed mobile services. The auction involved two swaths of spectrum for LTE deployment – 2.5GHz for urban areas and 450MHz for rural areas. In line with expectations, the Brazilian government raised $1.4 billion from the auction.

As a result of the auction, all four major telecommunications companies in the country secured licenses to offer LTE services. Both Madrid-based Telefonica SA’s unit Telefonica Brasil SA, and Mexico City-based America Movil SAB bought 20 MHz each of the nationwide spectrum. The other two national carriers, Milan-based Telecom Italia’s unit Tim Participacoes SA, and Rio de Janeiro-based Oi SA acquired 10 MHz each of the nationwide spectrum. In addition, America Movil bought 19 regional frequencies, Tim Participacoes SA acquired six regional frequencies, and Oi procured 11 regional frequencies.

The auctions were not without controversy since critics contended that 4G licenses add unnecessary burden on operators who are still rolling out 3G networks. However, the Brazilian government not only went ahead with the auctions, but set out ambitious targets for the launch of these mobile broadband services.

It wants the license winners to launch 4G services in the six Brazilian cities hosting soccer’s Confederations Cup by April 2013, and in the twelve host cities for the 2014 Football World Cup by the end of 2013. In Brazil, all state capitals and cities with more than 500,000 inhabitants will have 4G by year-end 2014, and all municipalities with at least 10,000 inhabitants will be covered by year-end 2016.

As part of their lucrative 2.5GHz spectrum acquisitions, all the four carriers had to assume obligations for providing LTE coverage in the rural and remote areas of Brazil.  Anatel classifies a rural area as being one that is at least 30 kilometer from any municipality. The operators are required to use spectrum in the 450 MHz band to roll out LTE in the rural and remote areas. Specifically, 30% of rural areas have to be covered by June 2014, 60% by December 2014 and 100% by December 2015.

The Latin American region has generally been slow in migrating to mobile broadband for variety of reasons.  However, the Brazilian lead is expected to inspire other countries in the region to follow suit. As Rojas pointed out, mobile broadband penetration in Latin America is 17 percent today, but it is expected to climb to about 60 percent by 2016, representing an immense opportunity for content, applications, and value-added services.

Rojas is bullish on the Latin American market because the region has not been susceptible to the economic crisis engulfing other parts of the world. Large pan-regional operators, who have 60 percent share of the Latin American mobile market, are strong carriers with the financial stability that allows them to invest in infrastructure, devices and innovation.

Want to learn more about the Latin American mobile market?  Please click here to access our latest portfolio of reports on this burgeoning market.

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Impact on Stock Price

True to its form, Apple once again surprised market watchers when it set an all-time quarterly record for the sale of its iPhone, iPad and Mac devices. The disclosure, which came on January 24, 2012 in the company’s release for the last quarter, sent the company’s stock price sky-rocketing, hitting record highs in after-hours trading before settling in at $454.50. This rise in its stock price gave Apple a market cap of $423 billion, topping Exxon Mobile‘s $417 billion, and making Apple the largest publicly traded company in terms of market capitalization.

During the last quarter, Apple shipped 37.0 million iPhones, an increase of 128 percent year-over-year, and it shipped 15.4 million iPads, up 111 percent. With quarterly shipments of 5.2 million, even Macs grew at 26 percent. These results are particularly striking in view of Apple’s weaker-than-expected results in the previous quarter that had led to a slide in its stock price.

Market Competition

Notwithstanding Apple’s solid market position, its competitors are unrelenting in introducing product enhancements designed to challenge its ascendancy. The Android OS, for instance, gets better and better as Google keeps releasing frequent upgrades, the latest being Version 4.x, Ice Cream Sandwich, released in August 2011. Samsung’s Galaxy line-up is based on Android with the Galaxy S II smartphone having an edge on iPhone in some respects. Android has already captured the lion’s share of the global smartphone market.

CES 2012 saw an overcrowding in the tablet market with vendor after vendor releasing new products. Amazon’s Kindle Fire and Sony’s Tablet S are both based on Android, and can give iPad a run for its money.

Research in Motion’s Black Berry OS 7, released in August 2011, offers dramatically improved performance, and the OS is expected to make another performance leap with the release of its next version that will be based on QNX. The company has already released a QNX-based tablet.

Microsoft used CES 2011 to showcase Metro, the design-language created for the Windows Phone 7 interface. The company sees extending Metro and Windows 8 across different device-types as its next big opportunity. Its Windows Mobile platform got a boost with Lumia 900, a smartphone released by Nokia at CES 2012. The smartphone, described by ZDNet as the show’s best mobile phone, uses Microsoft Windows Phone 7.5 Mango.

Apple’s Market Positioning

Apple certainly is not resting on its laurels. Its iPhone 4S, released on October 2011, has been a hit as reflected in the significant sales of the device in the last quarter. Its iOS 5 comes with the iCloud service and offers several advanced features.

In fact, Apple has raised market expectations by providing an upbeat guidance for the current quarter and by announcing that it has some amazing new products in the pipeline. Even without such raised expectations, Apple faced a high bar on its performance with even a minor lapse having costly consequences.

Apple’s Acquisition Strategy

What we see as a problem for Apple is the limited line-up of its products. For a company its size, Apple should have a much larger product portfolio addressing a wider range of market segments. A bigger portfolio will allow Apple to diversify its risks, giving greater stability to its stock price.

There have been several potential acquisition targets, but Apple has not so much as made a move. Research in Motion and Yahoo! are examples of companies that it could have easily acquired but Apple chose not to take any chances. In fact, this strategy has worked for Apple so far. But how long Apple can sustain its current business model is an open question.

Not that the company does not have financial resources. For its fiscal year 2011, Apple had cash and marketable securities worth an astounding $82 billion. With this much cash, Apple could go on an acquisition spree. But its biggest acquisition since it bought NeXT in 1997 for $429 million was that of Anobit, an Israeli chip maker, that it recently acquired for less than $500 million.

Conclusion

Although Apple’s acquisitions have not been unwise, the company needs to revisit its long-term strategy. Its disappointing results in the quarter before last should serve as a wake-up call. Apple’s products are still market leaders, but its competitors are upping the ante, and if the company does not change its course, it may be headed for troubled waters.

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This year’s Consumer Electronics Show extravaganza, like others before it, was characterized by glitz and glamor. However, despite prognostications that it was losing its luster, CES lived up to its reputation as the world’s biggest technology event. In fact, with 3,100 companies displaying their wares, this one was bigger than ever before. The 1.86 million square feet of exhibition floor showcased over 20,000 products.

Mobility and Computing

On the mobile side, Nokia had a strong presence at the show. The company, which has embraced Windows Mobile platform, unveiled the Lumia 900 Windows smartphone. Lumia 900, which is Nokia’s first LTE-enabled handset, was described by ZD Net as the show’s best mobile phone. Sony, another major device vendor, launched an Android handset. Designed to run on a LTE network, Xperia Ion comes with a big screen and support for PlayStation games.

Microsoft used the show to emphasize its focus on Metro, the design-language created for the Windows Phone 7 interface. CEO Steve Ballmer believes that extending Metro and Windows 8 across different device-types is the company’s next great opportunity.

Intel, which used the show to reveal its bid to challenge ARM for the market for mobile phone chipsets, announced partnerships with Motorola and Lenovo. Both vendors are planning to develop devices based on Intel’s Medfield mobile chips.

Android tablets launched at the show included the Asus Transformer Prime and the Acer Iconia Tab A700. Both tablets use the quad-core Tegra3 chipset. The Asus Transformer Prime, with a screen resolution for playing 1080p video natively, is priced to aggressively compete against iPad and Kindle Fire.

Ultrabooks also attracted a great deal of attention. The term “ultrabooks” was coined by Intel to describe portable computing devices that are ultra-thin but have faster boot-up times. Introduced only recently, ultrabooks are being manufactured by Toshiba, Samsung, Lenovo, HP, and LG. Toshiba’s Portege Z series are 0.62 inches thick, and can boot up within 13 seconds.

Television Sets

While mobility and computing garnered a lot of attention, it was television sets that stole the show. Not only do the new TV sets offer better resolution, they come in a range of sizes.

LG Electronics showcased an 84-inch TV that comes with 4K display. With a resolution of 4,096 x 2,160 pixels, 4K represents a new standard in television viewing. The advent of 4K digital cameras is allowing production studios to develop programs based on the new standard. Pushing the envelope further, Sharp has introduced a prototype 8K TV that offers double the resolution of a 4K TV set.

Sharp’s Aquos Freestyle TV sets have cut the cord. These wirelessly-connected TV sets are both thin and light with screen sizes ranging from 20 inches to 60 inches. Other TV-related announcements at CES ran the gamut – from Google TV to LG’s Magic Remote.

Cameras, Camcorders, and Audio Products

The show saw camera makers come up with products that blend imaging with mobile communications. Polaroid SC1630 Smart Camera comes with a range of advanced features, in addition to supporting Android, Wi-Fi, and Bluetooth. Samsung rolled out 5 Wi-Fi enabled cameras and camcorders that allow users to share images across mobile platforms, and come with the “Mobile Link” feature that allows the cameras to connect to other devices.

Audio products displayed at the show included an impressive line-up of headphones, codecs, and speaker systems. Monster’s Monster Micro, for instance, is a high definition portable speaker and speakerphone that comes with the Bluetooth streaming capability.

Emerging Technology Developments

While Facebook did not have physical products at the show, several applications were on hand that exploit the potential of the platform for richer user experience. For example, DIRECTV introduced a Facebook application that enables social discovery of programs and movies on the television set, allowing users not only to see what their friends are watching, but to tune in to those shows, or record them for later viewing.

Other emerging technology developments highlighted at the show included:

• Advanced navigation systems for cars
• Glasses-free 3D TV sets
• Contact lenses that display images, text, and augmented reality
• Lenses that make watching 3-D movies or playing video games a more immersive experience
• The use of body-heat to power devices such as a wristwatch or a health monitoring sensor

Future of CES

Apple, one of the world’s leading device maker, has shied away from CES, but the show went on. Now another heavyweight, Microsoft, has chosen to abandon this annual gadget-fest after staying with it for 15 years. This might actually be all for the better.

CES is becoming too unwieldy with bigger vendors dominating the ceremonies. The booths of the smaller vendors, on the other hand, are just side-shows that are jostling for attention. By organizing their own events, the bigger vendors get an opportunity to distance themselves from the crowd, allowing CES to better focus on other companies that matter.

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Founded by Mike Lazaridis in 1984, Research in Motion has been a pioneer of secure mobile devices. In 1999, the company’s growth took off when it introduced BlackBerry devices. Using push technology, these devices allow emails and other user data to be pushed to the mobile user.

Challenges

Although BlackBerry continues to have an extremely robust and feature-rich platform, the sales of these devices have been hampered by the onslaught of iOS and Android devices. This has impacted the stock price of the company, resulting in a push by the company’s Board to oust two of the company’s pillars – Mike Lazaridis and Jim Balsillie.

To do so will be a mistake because Mike and Jim are the visionaries that have guided the company through thick and thin, and now more than ever, the company needs their leadership to stem the tide. Getting rid of the two will compound the company’s problems, since no leadership change at this stage will alter the company’s fortunes.

Research in Motion has weathered many storms. One of them was the patent litigation that at one point threatened to bring the company’s operations to a halt. The other, and even more serious, has been competition from Android and iOS devices that have seen rapid uptake at the expense of Blackberry sales.

Prowess to Innovate

But it appears that Research in Motion is up to the challenges it faces. There is no let up in the company’s innovative prowess, and each version of its operating system represents a leap in technical capabilities over its previous version.

Unlike previous BlackBerry operating systems that offered legacy support, Research in Motion’s BlackBerry OS 7 – released in August 2011 – makes a clean break with the past, but offers dramatically improved performance. According to Research in Motion, BlackBerry OS 7 smartphones deliver browsing results that are up to 40% faster than BlackBerry OS 6 smartphones and up to 100% faster than BlackBerry OS 5 smartphones. The browser offers optimized zooming and panning for smoother web navigation and optimized HTML5 performance for better gaming and video experiences.

With the release of BlackBerry PlayBook in April 2011, Research in Motion entered the tablet market. The first version of the device only supported Wi-Fi, but later versions are incorporating mobile connectivity. BlackBerry PlayBook uses QNX Neutrino, an operating system that scales down to meet the constrained resource requirements of realtime embedded systems. The next BlackBerry operating system for smartphones will also be based on QNX.

Future

Despite setbacks, Research in Motion is not backing down. While falling stock price is a matter of concern to its shareholders, the possibility that the company will bounce back is very much in the cards. At the same time, its low stock price makes it an attractive target for acquisition. Apple, which needs to diversify its product portfolio, should seriously consider acquiring Research in Motion. And so should Google which can use Research in Motion technology to became a manufacturer of enterprise-class smartphones.

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It is almost impossible to understand, let alone describe, the creative genius  of Steve Jobs. With little college education, he was neither an engineer nor a computer scientist. But he was a legend with an intellectual curiosity that no one in the contemporary world could match. 

Jobs was not an inventor in the conventional sense of the term, but he was the force behind the invention of several revolutionary devices that have changed the world. He had the vision and the drive that is unparalleled.

In mid-seventies, Jobs nudged Steve Wozniak, six years his senior, to work with him to build a computer, and the two successfully built Apple I, a bare bones computer consisting of little more than a circuit board.

However, the next computer, Apple II, was much more than that. It was, as Jonathan Zittrain puts it, the first “generative” computer. Apple II became the first mass-produced computer, and represented the dawn of an age where computers could be programmed, and could use third-party software.

In developing these computers, Wozniak came with technical skills, but Jobs brought ideas and vision. The partnership between the two, unfortunately, could not last very long. In 1981, Wozniak was injured in an air crash and developed amnesia. (He eventually recovered but has had little involvement in Apple.) 

Jobs went on to develop the Macintosh line of computers that represented a leap in terms of technical capabilities, and were a far cry from text-based machines such as IBM PCs. The Macintosh computers employed highly complex software, but reduced complexity for the end-user. 

Apple went public in December 1980, and two years later it became the first PC company to reach $1 billion in annual sales. Jobs was forced to leave Apple in 1985 after an internal power struggle with CEO John Sculley who was enticed into the company by Jobs himself. 

During his absence from Apple, Jobs not only formed NeXT (the developer of the NeXTSTEP object-oriented, multitasking operating system), but bought the computer-graphics division of Lucasfilm, and renamed it Pixar. In 1995, Pixar released its first feature film, Toy Story, which was a box-office hit. (Other hits, such as Finding Nemo, followed in the years to come.) 

Microsoft, a smaller and younger company than Apple, went public in 1986. On December 19, 1989, Microsoft decisively overtook Apple in terms of market capitalization. This was the beginning of a slide for Apple that would take the company to the brink of bankruptcy. 

In February 1997, in a dramatic development, Apple purchased NeXT for $400 million, and with it – after a lapse of almost 12 years – Jobs returned to the company he had founded. In August 1997, Microsoft gave Apple $150 million to keep it afloat, and pledged to develop the Office software suite for the Macintosh platform. 

Formally appointed CEO of Apple in 2000, Jobs went on a roll, producing one incredible product after another. 

In October 2001, Apple introduced iPod, a digital media player with a 1.8-inch hard drive that initially stored 1,000 songs. (Its capacity has continued to multiply, and enhanced versions of the product have followed – Mini, Nano, Shuffle, and Touch).

In April 2003, Apple introduced the iTunes store with the capacity to store 200,000 songs. Becoming the biggest music store, iTunes has revolutionized how music is accessed. Over 16 billion songs have been downloaded from the iTunes store. 

At a time when no one thought that mobile devices could be made any better, Apple made a dent in the smartphone market by rolling out iPhone. The device, introduced in January 2007, has become the standard by which smartphone capabilities are judged. (Since then, the smartphone market has exploded.)

Apple’s introduction of iPad in January 2010 was another epoch-making event. This device has changed the way computing will be done in the future. 

Apple’s string of successful product launches has had an impact on its market value. On May 26, 2010, Apple overtook Microsoft in market capitalization, becoming the biggest technology company in the U.S. 

In October 2001, when Apple introduced iPod, the company’s stock hovered around $10. Less than 10 years later – in July 2011 – the stock price had climbed over $400. By his own admission, Steve Jobs was not motivated by money, but by a desire to excel. In the process, however, he made himself and those working for him more wealthy than they could have ever imagined.

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