Broadband Growth Strongest in $20,000 to $40,000 Households

Broadband adoption rates between 2007 and 2008 were highest among households with annual income between $20,000 and $40,000, according to new research by the Pew Internet and American Life Project.

The only income group to experience declining broadband penetration was the less-than-$20,000 income group, which includes college students as well as other lower-income households.

The other notable divergence from growth rates in the 15 percent to 24 percent growth rates were among households with annual income above $100,000, where four percent growth was the norm. It is probably fair to say that wealthier households largely have adopted already.

Microsoft Enters Consumer Software as a Service Business

Microsoft Corp. has unveiled Microsoft Equipt, an all-in-one security and productivity software subscription service for consumers. The new offering is a move by Microsoft into the software as a service business.

Microsoft Equipt is $69.99 (U.S.) estimated retail price for a one-year renewable subscription. Each subscription will be good for three home PCs.

Microsoft Equipt will be sold in nearly 700 Circuit City stores in the U.S. starting mid-July 2008.

Microsoft Equipt includes Microsoft Office Home and Student 2007; Windows Live OneCare, the all-in-one security and PC management service; Windows Live tools, such as Windows Live Mail, Windows Live Messenger, Windows Live Photo Gallery and so they can connect and Office Live Workspace, a new service from Microsoft that makes it easy to save documents to a dedicated online Workspace and share them with friends and classmates.

What's Up with AT&T's Satellite Deal?

You are free to take your pick: AT&T has terminated its current contract with Dish Network simply to negotiate better terms; or AT&T has done so because there is a real chance it might partner with DirecTV. Either thesis has some merit.

AT&T represents about 15 percent of Dish Network’s gross subscriber adds, so losing the deal would likely lead to negative subscriber growth for Dish in 2009. From AT&T's perspective, switching providers would entail some costs, as well, so the most-logical scenario is simply that AT&T will use the new competition to extract better terms from Dish.

It wouldn't be the first time a major supplier has been played as a card against an existing supplier. At the margin, some would argue, DirecTV offers a richer menu of on-demand and HDTV programming.

But a value-price argument can be made for either satellite provider. There are the switching costs to consider, of course. But there could be more going on under the surface than is apparent.

One never should discount what Liberty Media Chairman John Malone (Liberty Media has a controlling interest in DirecTV) might be thinking, strategy-wise. At his best, he is a move or two ahead of everybody else. I don't know whether that is a factor this time around, but anytime he does decide one of his assets has a strategic opportunity, one pays attention. He does.

Nationwide Sprint Femtocell Deployment?

Broadband Reports says Sprint is launching its "Airave" femtocell service nationwide on July 15, 2008. The in-home terminal reportedly will cost $1,000, and allow any Sprint mobile handset to communication over the fixed broadband connection attached to the femtocell box.

A single user can expect to pay $15 a month. Families can expect to pay $30 a month for unlimited domestic calling using the femtocell.

FTTH Milestone Reached

More optical fiber than cable modem high-speed connections turned up globally in the first quarter of 2008, say reserchers at Point Topic. That's the first time this has happened, Point Topic says.

While there were 2.5 million cable broadband subscribers added worldwide in the first three months of 2008, fiber connections grew by over 4.2 million net users.

“It’s a significant milestone for fiber optic broadband, where it is available consumers will take fiber over other broadband technologies,” says Oliver Johnson, Point Topic CEO.

“If you look at the cost per megabit then DSL comes in at around $20 per megabit per month taking global averages," says Johnson. "Cable does better at roughly $12 but they are both completely eclipsed by fiber where costs can get as low as 50 cents per megabit per month."

While there are sizeable variations from country to country, region to region and operator to operator, a rule of thumb is that DSL can cost the consumer more than 15 times as much as fiber to get a megabit of bandwidth and cable is seven times as expensive.

Of course, it's no surprise that the cost per megabit is lower with fiber than with any other access technology. Fiber's big advantage is bandwidth. All other things (overhead, construction, cabling cost, operations, maintenance) being roughly equal, fiber just supplies more bandwidth than a copper, coaxial cable or wireless access connection.

In U.K., 6% Mobile Internet Usage

About six percent of respondents to a recent survey undertaken by Point Topic say they now use mobile Internet services.

About 62 percent say they would. As you would expect, income matters. Mobile Internet usage is highest in the highest income segments; lowest i the lowest income segments.

Truphone Boosts Credit July 1-14, 2008

New customers using Nokia handsets and signing up for the Truphone "VoIP over mobile" service from July 1 to July 14 will get $8 credit in their account, instead of $2. Right now the service is in beta testing, so Truphone only works with Nokia devices.

Truphone allows users of Wi-Fi-enabled mobile phones to make and receive regular telephone calls, and to send and receive SMS text messages, using only a Wi-Fi connection and the Internet. Although still in beta, it has already attracted tens of thousands of users in 149 countries.

This is equivalent to 133 free minutes (2 hours 13 minutes) to a landline in one of the Tru Zone’s countries or 80 free minutes (1hour 20 minutes) to a landline in one of the Outer Zone’s countries.

The credit also is enough to call for 26 free minutes to a mobile in one of the Tru Zone’s countries, or 16 free minutes to a mobile in one of the Outer Zone’s countries.

Dell Discounts for WildBlue Subs

WildBlue customers now can buy Dell computers at discounts available to members of the Dell. The discount program is effective immediately for all WildBlue subscribers, both residential and business, with potential savings of up to 12 percent on all Dell Inspiron desktops and notebooks. There are also discounts available for all electronics and accessories purchased with a new Inspiron desktop, Inspiron notebook, or XPS system.

Intel Predicts Computing Using Hundreds of Cores

Patrick Gelsinger, Intel SVP, expects a sharp acceleration in the number of computing engines packed on a single chip. Forget about dual core, or quad core.

He says products in the future will feature tens to hundreds of processors. Media processing is one application that comes to mind. Try protocol conversion of HDTV into some other protocol suited to Web display. Dual core doesn't cut it.

Now if they can just solve the heat and battery draw issues.

ITV Gap?

You can always count on one thing: whatever the service or application happens to be, the United States always is lagging, getting left behind, behind the curve.

It was said about mobile usage, about text messaging usage, about mobile penetration, broadband penetration, broadband prices, broadband speeds, rural broadband and sometimes VoIP.

Now some observers lament the U.S. lag in interactive TV. That's funny, since the U.S. market is about the most video-involved in the world. A couple of observations. Sometimes people don't use an application or service because they just don't see the value, relative to the price. Interactive TV is one of those sorts of applications.

Ask about digital video recorders and consumers vote with their wallets. Ask about over the top video and people vote with their mouse clicks. If people aren't wild about interactive TV, it probably is because it isn't compelling yet. Give people a compelling application and they'll use it. People like to vote for their favorite amateur singers or dancers.

There is no interactive TV gap. If compelling apps get developed, people will adopt them, rapidly. It's always interesting when pundits criticize consumers for not liking some app they think people should like. Give people something interesting and valuable. You won't find any gaps there.

It's All About the Content

Only three things matter where it comes to video on demand: content, content and content. No matter what anybody thinks today, if popular content is accessible on a VOD basis, and is priced and packaged in ways consumers find fair, VOD takes off.

In some ways, digital video recorders provide something of a precursor. Time shifting is a form of VOD. And there's no question but that prime time and scheduled TV are losing their impact as consumers create their own entertainment lineups.

Why is time shifting more popular than VOD? For the same reason any form of media consumption is popular: people easily can get the content they want. Today, there's a fair amount of free VOD content, such as karaoke, music videos and programs for children.

The reason time-shifted multi-channel video content gets higher viewership is that viewers think "that's the good stuff."

eMarketer estimates that VOD is available in one third of TV households today, and will reach over 60 percent of households by 2012. The issue is how much "good" content will be available that way, as well as over the top on the Internet.

ChoiceStream data from December 2007 shows there would be greater viewership of VOD if there were "more content of interest." And pay little attention to what consumers say they will do. Even if they say they aren't much interested in VOD, that's just because the available content is not what they really want.

Mobile Saturation in China

My how things have changed. In urban China, 98 percent of people already own at least one mobile phone. In urban India, 85 percent own a mobile while in urban Brazil 79 percent own a mobile.

Nortel Touts Telecommuting Benefits

Nortel says 10 percent of its employees work from home on a full-time basis while 80 percent are equipped to work from home. Employees who work from home one day a week save an estimated $500 a year on fuel costs.

And though some enterprises worry about productivity, Nortel estimates it gains a 15 percent increase in productivity among teleworkers, with 94 percent reporting 15 percent to 20 percent greater productivity

Annual real estate savings represent $9,000 for each full-time teleworker, working out to about $22 million annually in energy use and real estate spending.

34% Buy Premium Features and Services

Social networking sometimes looks like a feature rather than a full business model, with the perhaps obvious exception of the leading portals. But affiliate advertising, virtual goods, micropayments, social network site merchandising, and data mining might emerge as viable alternatives to traditional revenue models, say researchers at In-Stat.

But there's some evidence the "give the base service away free, make money on upgrades" strategy does work. In-Stat notes that 66.6 percent of respondents to a recent consumer survey do not pay for premium services or features. But that leaves about 34 percent who do buy upgraded features.

Of course, much the same sort of analysis might be made of email or blogging. There are lots of business models of an indirect nature; some of a direct nature. About 16.7 percent of survey respondents use a mobile phone to participate in online social networking or video content sites. At the very least, that means more use of mobile data and mobile Web services.

In-Stat forecasts 92.2 million social networking users in the United States by 2012.

Verizon Wireless Adds Unlimited Music Downloads

Verizon Wireless has launched a new program that will let customers download as much music as they want from Rhapsody online music service for $15 per month, to seven handsets, with three additional handsets to be added as well.

The service will compete with MP3 downloads provided by other companies such as Apple's iTunes. Verizon has a similar deal with Napster.

Rhapsody is eliminating copy protection on all tracks bought from its online music store, which will enable them to be played on a variety of devices, including iPods.

Downloads do not seem to me to be a functional substitute for satellite radio, but one has to wonder how many other users think so.