Mobile to Lead Japan Online Ad Growth

Online advertising in the Japanese market is lower than in other markets, but growing at a faster rate.

Japan’s leading advertising agency, Dentsu Group, says search spending accounted for 27 percent of Japan’s online ad marketing in 2007, a figure significantly lower than in the United States (40 percent) and the United Kingdom (60 percent), eMarketer notes. By 2010, Dentsu predicts search will reach just 30 percent of Japanese online ad spending.

Dentsu also estimates that Japan’s mobile ad market grew by 42.5 percent in 2007. Mobile advertising is expected to remain the fastest-growing segment through 2010. Dentsu forecasts double-digit growth for the entire Japanese online ad industry to 2011, when growth is expected to slow to 9.6 percent.

54% of U.S. Cable Operators Face Telco Video Competition

Fifty-four percent of the cable systems surveyed by In-Stat say they face a telephone company that already is offering video service in their cable TV service area, In-Stat says. Oddly enough, though rural areas often are considered to be service backwaters, lagging urban and suburban areas in broadband access, for example, rural areas often are places where telcos have moved early to offer entertainment video services.

Historically, rural telcos have been licensed cable operators as well. But some telcos that aren't wired competitors rely on satellite partnerships to get the job done. And there's a scale effect here. It takes a long time for a large telco to upgrade nearly any part of its infrastructure.

Small operators, simply because they are small, can upgrade much faster. Keep in mind that rural operators often have a few hundred to several thousand customers, not millions. The same sort of process works at the level of a country. A small country can upgrade its facilities much faster than a larger country, simply because of the differences in scale.

Solid State Storage is Coming

It appears that the Asustek Eee PC was among the top-ten notebook PCs sold by Amazon over the Christmas season. That might be interesting for several reasons, including the fact that it is a Linux machine or that it uses solid state storage.

Up to this point, solid state storage has been expensive enough, compared to hard disk alternatives, that its use has been limited. The smallest iPods use solid state, but the larger-capacity devices use hard disks, for example.

But Moore's Law continues to operate. Even if solid state costs an order of magnitude more than hard disk storage, costs are declining fast enough that one can predict a point where solid state storage is cheap enough to be useful in a much-wider range of settings, including many that currently rely on hard disk drive storage. And it isn't simply consumer devices where that trend will be important.

So far, the biggest barriers to adopting solid-state drives (SSD) in the data center have been price and capacity. Hard disk drives (HDD) are much less expensive and hold much more information. For example, a server-based HDD costs just $1 to $2 per gigabyte, while SSD costs from $15 to $90 per gigabyte, according to IDC. So far, the cost disparity has been so high that SSD has not been an option, though some would argue it has other advantages.

Alan Niebel, Web-Feet Research Inc. CEO says the average cost of solid state storage per gigabyte is $10 while and hard disk drive storage costs 30 cents for a gigabyte of storage. Many observers say a price point of $1 per gigabyte is the inflection point at which solid state really takes off. And at an expected 50-percent annual price decline, that might happen by 2011. Of course, hard disk drive storage will cost just three to 10 cents a gigabyte at that point.

And prices are falling fast. Right now, the industry trend is a 40 percent to 50 percent drop in SSD pricing per year, according to Samsung.

At that rate, how long can it be before solid state storage starts to become a bigger factor in both enterprise data center, consumer electronics and computing devices, especially mobile devices?

Assume a gigabyte of hard disk storage now costs about one dollar. Assume the highest price for solid state storage is $90 a gigabyte in 2007, and that prices will drop 50 percent a year. By 2010, one then sees solid state storage at about $5 to $6 a gigabyte, competitive enough with hard disk drive storage to be reasonable in some applications where energy costs, extended battery life or light weight are important considerations. Make that data center storage applications, notebook computers and portable gaming or music devices as primary examples.

By 2011, one is down to about $2.50 a gigabyte of storage for solid state media. Of course, hard disk drive costs will decline as well. If hard disk storage costs drop at the same rate, a gigabyte of hard disk storage will cost three cents per gigabyte by about 2011. That's still an order of magnitude difference, but for many applications the cost of solid state storage will no longer be a barrier to use in many consumer device or data center applications.

iPhone Mobile Browsing Tops Windows Mobile

In December, it appears that the iPhone OS was used by twice as many users as Windows Mobile, according to Net Applications data for that month. Considering the vastly greater number of Windows Mobile devices in use, that's something.

Mac OS Gains in December

Though Windows remains the overwhelming leader in operating systems, December browser data shows a surge by Apple, iPod and Linux, says Net Applications.

The Mac OS was in use by 7.3 percent of users, up from 6.8 percent in November. The iPhone nudged up to 0.12 percent, up from .09 percent in November.

Microsoft’s Windows still dominates, with a 91.8 percent share.

Net Applications’ monthly surveys represent data from visitors to some 40,000 websites operated by the firm’s clients.

The Linux operating system also showed strong growth, up better than 10 percent to hit a .63 percent share.

60% Medium Enterprise IP Comms in Korea, China, India and Hong Kong

More than 60 percent of mid-sized companies with 2,500 to 9,999 employees in China, Hong Kong, South Korea and India currently are using managed IP PBX and hosted IP telephony for their voice communications, according to researchers at The Yankee Group.

Although enterprises experienced or expect savings on domestic long distance and international direct dial charges when using IP telephony, they also experienced or expect increased spending premium on network equipment, telephony equipment and network security by up to more than 25 percent, Yankee Group says.

User training seems to be the biggest challenge for enterprises deploying IP telephony and UC is user training issues. By geography, user training is a more pressing challenge for companies in Hong Kong (56 percent) and India
(58 percent). Inability to understand the link between technology and business process challenges Korean companies the most (52 percent).

48% Increase in Local Online Ad Spending This Year

Borrell Associates expects a 48 percent increase in local online ad spending in 2008, bringing spending to $12.6 billion. Local search and online video advertising will drive much of the activity, Borrell says.

Local search advertising will more than double to $5 billion, while locally placed online video will triple to almost $1.3 billion.

A major component of local video advertising will be long-form pieces for home, automotive and health-related categories, the firm argues.

Most yellow pages publishers, cable companies, newspapers, radio stations and TV stations are still pinning their hopes on their traditional sales reps being able sell online ad packages. But local sales entities might have to create separate online-only sales forces to get the job done.

Most sales entities face the same problem: it is tough to grow sales for new lines of business when those new lines represent a small percentage of the overall sales opportunity and might even cannibalize the existing business.