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May 5, 2011Carphone Warehouse Q4 2010/11 results: weathering storms
ReportsCPW Europe had a difficult quarter, with volumes falling 9% and like-for-like revenue 2%, due to continued prepay weakness and the shift to 24 month contracts in the UK. The US business was again very strong, growing volumes at 26%, and this strength is likely to continue due to an acceleration in store roll outs. Keeping the European business flat in 2011/12 will be a challenge, but the US business is likely to more than make up for this at the group level.
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April 17, 2011The ebooks explosion
ReportsMarket data and industry anecdote point to an explosion in ebook sales in the US and UK in 2011. Leading consumer publishers are seeing ebook sales at 10-15% of total sales in January and February, driven by Christmas device sales. So far ebooks had been strongest in niches: romance, business books and frequent travellers. They have now moved into the mass market: few genres will be untouched. This shift brings with it a very different market structure, with Waterstones likely to shrink dramatically, technology companies with little stake in the health of publishing taking major roles and publishers faced with disintermediation and forced to build direct consumer relationships for the first time in their history.
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January 20, 2011
Carphone Warehouse Q3 2010-11 results
ReportsCPW's European volume and revenue growth dropped in the December quarter, but this was largely due to the higher mix of prepay in the Christmas period, with underlying trends (strong contract, weak prepay) unchanged. US volume growth surged to 34% as the company continued to roll out standalone stores in malls and shopping centres, and there appears to be plenty of growth to come. Looking forward, the UK business is likely to suffer from the longer handset contracts that have been rolled out by the UK mobile operators over the last two years, but continued strength in the US is likely to more than make up for this.
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December 17, 2010
UK DTV platform growth: 2005-20150
ReportsWith the completion of digital switchover still on track for mid 2012, stabilisation of the main digital broadcast platforms is expected, with roughly equal numbers of subscription pay-TV and free TV homes, though with marked differences between the platforms in terms of demographic composition and the proportion of pay-TV customers. Further marked differences exist between the satellite, cable and terrestrial platforms with regard to PVR adoption, notably higher in pay-TV households where distribution can benefit from box subsidies and greater product consistency. National PVR penetration of TV homes is expected to grow from slightly below 50% in 2010 to over 70% in 2015. As DSO nears completion, the stage is set for broadband connectivity. Although household penetration of internet-enabled TV devices is expected to exceed 50% by 2015, the emergence of hybrid broadcast and broadband services is expected to proceed much more slowly, limited by a number of factors not least the ability of service providers to monetise their non-linear on demand offerings.
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December 9, 2010Google eBooks: Good news for publishers
ReportsGoogle has launched a dedicated ebooks store in the US, with support from 4,000 publishers, providing an ecommerce platform for independent book retailers. Google's aim is not revenue from ebooks, though the market is attractive: we estimate ebooks will be 5% of the US books market in 2010 ($1bn) and could grow to perhaps half of all book sales within the next five years. Like Amazon and Apple, Google is using ebooks to support its broader strategy, driving search traffic and building an ecommerce platform. Revenue from ebooks is less important than supporting these objectives.
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November 8, 2010
Carphone Warehouse 2010/11 interim results: US driven growth
ReportsCPW's European handset business had a steady quarter, with growth dipping slightly on the previous quarter but still in line with full year guidance. Smartphone sales are surging, and CPW is orientating its business towards them, but their impact is not unambiguously positive in Europe. The US handset business continued to enjoy strong growth, with this side of their business benefitting strongly from smartphone growth, and this outperformance led the company to increase its full year EBIT guidance. The UK big box' roll-out is continuing, but no sales figures or indications have been given, and the full year operating loss guidance has been increased, eating up some (but not all) of the outperformance from the US. There appears to still be much experimentation involved at this stage, and even more uncertainty about the eventual success or failure of this new business. -
October 27, 2010Virgin Media Q3 2010 results: resilience under pressure
ReportsVMed's Q3 results showed continuing strength in the face of heavy marketing by BT Retail and BSkyB, although cable churn increased significantly. There are plenty of further challenges on the horizon, including a downturn in consumer confidence and later, the launch of YouView and wider deployment by BT of next generation access. The broad based nature of the company's growth and its plans for further product development in TV and broadband continue to give us confidence in the potential for further growth in cash flow, albeit at a more modest pace. -
October 21, 2010Windows Phone 7: fast but late
ReportsMicrosoft's new Windows Phone 7 operating system is launching with a big bang: ten handsets, eighteen operators, and a massive marketing campaign. The OS itself is positioned firmly in between iPhone and Android in terms of ease-of-use and customisability; it is as fast as the best-in-class but no faster; and its interface is bold but will not be to everybody's taste. A lack of apps, limited distribution, and expensive handsets will likely limit sales in the short term. Longer term, being late in the game with no truly compelling unique feature will make building a major position very challenging, but not impossible. -
October 20, 2010UK Residential Broadband Market 2010
ReportsThe decline in UK residential broadband market growth has paused due to accelerating adoption by older householders and increased household formation. We expect 970,000 net additions in 2010 and 20.5 million broadband households by 2015. However we expect growth will continue to decline from 2011 as the impact of the government spending review feeds into consumer confidence and the market becomes increasingly saturated. As BT's next generation access network is deployed, there is likely to be accelerated improvement in DSL price/performance, with DSL customers migrating to a 40 Mbit/s headline speed as it becomes available. The impact of this is likely to be compounded by Virgin Media up-rating its broadband portfolio from speeds of 10, 20 and 50 Mbit/s to 20, 50 and 100 Mbit/s. In the absence of further consolidation, in market share terms the industry appears set to remain divided into three strategic segments: the big three', brand extenders, and Sky. We expect residential broadband market revenue (excluding content) to continue to decline gradually, stabilising by 2015 as the impact of market share gain by lower priced ISPs attenuates due to a combination of a maturing market and reduced price differentials caused by NGA. -
June 17, 2004
Global Games Market
ReportsThe unveiling of new handheld gamers at E3, the games industry's annual gathering in Los Angeles, has resuscitated interest in the fast maturing market for handheld gamers. Sony's PlayStation Portable (PSP), Nintendo's dual-screen GameBoy and Nokia's redesigned N-Gage QD are major product plays for companies that must each prove themselves again to be innovative or continue to decline.
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January 31, 2003
SMS TV
ReportsInteractivity via the TV set was one of the most misguided bubbles of the late 1990s. Fancy software and mini keyboards were supposed to provide a replacement for the PC. As matters have turned out, the use of SMS to accompany TV programmes is the means by which new technologies provide a limited form of interactivity to viewers.
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October 25, 2001
Consumer Payment Companies
ReportsIn this short note Chris Goodall looks at consumer payment technologies. He says that the banks and credit card companies are under no immediate threat from new technologies. Do not be confused by the wizard new technologies coming out of Nokia; technical advances are not going to change payment systems much in the next five years. Rather, he suggests, observers should focus on three interesting companies which use low technology solutions to solve particular payments problems. These companies support, rather than undermine, existing players in the consumer payments industry.
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March 15, 2001
Microsoft: Will the Giant Engulf the Mobile Phone Industry?
ReportsThe purpose of this report is to look in more detail at the actual capital expenditures that 3G operators can be expected to make. We show that costs will be very much lower than expected. This is because most operators will be able to offer a good service to large numbers of customers by installing relatively few base stations. This is excellent news for operators, but infrastructure vendors such as Ericsson and Nokia will see much lower volumes of equipment orders than most analysts are projecting. The evidence for our conclusions is derived both from an analysis of actual 3G infrastructure orders and from an analysis of theoretical capacity.
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March 15, 2001
Microsoft .NET – The Oil Tanker Turns
ReportsMicrosoft has never made much impact on the Internet. As a result, we still have a proliferation of standards and competing suppliers of the underlying technology, of which the most obvious is Java. Almost all the new generation of Internet access devices, such as phones, PDAs and TVs, all use underlying software that does not work well with Microsoft technology. Genuine interoperability is not yet available. The key points we make are as follows:
Sector Technology.
