November 13, 2013 Reports
The Vivendi empire is shrinking in revenues, cash flow and also in debt: Activision Blizzard and Maroc Télécom were sold in 2013, SFR will be spun off. We expect SFR's topline revenue decline to halt in H1 2014, ending the pain from the disruptive launch of Free Mobile in 2012. With SFR and Bouygues Telecom intending to conclude a network-sharing agreement outside urban areas by the end of 2013, SFR should have a more positive story to tell investors when it comes to the Paris stock market in late 2014. With SFR spun off, Vivendi 3.0 will own just Canal+, Universal Music Group (UMG) and GVT (telecoms operator in Brazil), three companies without visible synergies. The end point appears to be the full dissolution of the Vivendi conglomerate.
The Vivendi empire is shrinking in revenues, cash flow and also in debt: Activision Blizzard and Maro [...]
October 21, 2013 Reports
For the BBC's DG Tony Hall, Where next? primarily means more digital, expanding its iPlayer internet TV and radio application and offering greater personalisation. These moves form part of a wider strategy to ensure BBC services and programming can be delivered seamlessly across devices in the most relevant form, whilst maintaining access and appeal to all age groups. Reaction from commercial rivals and commentators has been muted, likely saving powder for the soon-to-begin battle over the BBC's scope and funding from 2017, when the current Royal Charter expires
For the BBC's DG Tony Hall, Where next? primarily means more digital, expanding its iPlayer inter [...]
October 20, 2013 Reports
Apple's two new iPhones both secure its grip on the high end (for now) and extend a cautious toe into (slightly) cheaper waters. They will not deliver a step change in global sales growth, but should deliver solid performance. 9m unit sales at launch are impressive, but 200m updates to iOS 7 (double last year's figure) point to the continuing strength of Apple's ecosystem and its ability to deploy innovative new features. We continue to believe there is room in Apple's portfolio for a $350-$450 phone without weakening Apple's quality of experience or brand positioning, but this is clearly now off the agenda for another year.
Apple's two new iPhones both secure its grip on the high end (for now) and extend a cautious toe into [...]
September 12, 2013 Reports
Microsoft dominated PCs and Nokia mobile phones, but both are irrelevant in the dominant model for tech in the next decade, smartphones and tablets. An acquisition may have been necessary, but by itself it solves nothing. Smartphones are now half of all mobile phone sales, and the 255m smartphones and tablets sold in Q2 2013 dwarf the 76m PCs sold. Microsoft now powers less than a quarter of all the personal computing devices being sold. Microsoft retains a leading position in enterprise and in console gaming. But if it cannot return to relevance in consumer, the strength of the whole business will suffer.
Microsoft dominated PCs and Nokia mobile phones, but both are irrelevant in the dominant model for te [...]
September 12, 2013 Reports
Global consumer expenditure on recorded music fell 4% in 2012 to $20.7 billion on the continued decline of sales of the CD and other physical formats to $12.3 billion in 2012, while retail spending on digital formats rose 8% to $7.1 billion. We predict the global market will turn the corner in 2014 and reach $22.4 billion in 2017. For 2012, we estimate the share of digital at 35% of retail sales in the top five markets of the US, Japan, Germany, the UK and France. In Japan, the rebound in CD sales and difficult mobile-to-internet transition reduced the share of digital in 2012 to just 15% of retail. For the other markets, sliding CD sales and digital growth continue to increase the share of digital in retail sales, with the US in the lead with 55% digital share. A key theme in 2013 and in our forecasts is the take-off in revenues from subscriptions to access services, both stand-alone and bundles from mobile carriers. Bundling leverages the personal, mobile and connected nature of smartphone music activity, reduces decision-making and price barriers, and is a more powerful driver of adoption than stand-alone offerings. At this point, we still expect ownership to remain more important than access in the market for digital music by 2017
Global consumer expenditure on recorded music fell 4% in 2012 to $20.7 billion on the continued decli [...]
September 10, 2013 Reports
Virgin Media and Netflix have agreed on a ground breaking trial that blurs the traditional distinction between pay-TV platforms and OTT services by permitting TiVo customers direct access to Netflix via their set-top boxes The deal promises to benefit both parties as Netflix enhances the Virgin Media content offer to its TiVo customers with minimal risks of cord-shaving, while availability on Virgin Media TiVo offers Netflix the prospect of incremental subscription growth The question is whether other pay-TV platforms will follow suit, including Sky with its competitive interests in film rights acquisition, but where the Netflix value to UK viewers is increasingly seen to lie in its TV content
Virgin Media and Netflix have agreed on a ground breaking trial that blurs the traditional distinctio [...]
August 20, 2013 Reports
Netflix H2 2013 results show continuing steady expansion in its domestic US and international streaming businesses, mostly towards the upper end of company guidance Netflix has always posed as a disruptor, yet there is nothing revolutionary in its business model or content origination strategy, while confidence in the future owes much to growing acceptance of Netflix as another channel outlet by incumbent content owners Although Netflix releases no international streaming data by country, there is some evidence to suggest it is edging towards two million in the UK; but is still on a tightrope as it races to add subscribers and revenues to cover its fast growing and somewhat shrouded content obligations
Netflix H2 2013 results show continuing steady expansion in its domestic US and international streami [...]
August 6, 2013 Reports
Reports of the death of the PC have been greatly exaggerated, but rapid adoption of mobile devices is changing how, when, where and why consumers access the internet. Over the next few years, we forecast that PC user growth will be limited to population growth, smartphone penetration will rise from two thirds currently to over 80% by 2020, and tablet users will converge to the same level as the PC audience. In addition, we project that overall internet consumption will nearly double by 2020, with PC-based usage declining before levelling out, and smartphone and tablet use increasing threefold. Of the traditional media sectors, we expect print media to be the most negatively affected by the rise of the mobile internet, with less impact on radio and TV viewing and advertising likely to be relatively resilient.
Reports of the death of the PC have been greatly exaggerated, but rapid adoption of mobile devices is [...]
August 5, 2013 Reports
A cheaper iPhone has been discussed almost since the original launch in 2007, but we believe costs have fallen and the market developed to the point that it now makes sense for Apple to offer a $200-$300 (unsubsidised) model. We see a positive but fairly small financial impact on Apple. The key benefit would be defensive: by extending the ecosystem and preserving iOS as developers' first choice, Apple would secure the whole portfolio. We believe a well-executed and distributed $200-$300 iPhone would sell double-digit millions of units a significant challenge to Android OEMs and Google. However, the US market's pricing structure might limit the impact there.
A cheaper iPhone has been discussed almost since the original launch in 2007, but we believe costs ha [...]
July 18, 2013 Reports
Recorded music retail sales in Japan were flat in 2012 at $5.8 billion on the unexpected bounceback of CD sales, amidst the ongoing collapse of mobile music sales
Smartphone adoption is driving up internet track sales, which topped mobile track sales in 2012, but the internet's price discount to mobile is squeezing track revenues
Japan will be dynamic in 2013 and beyond for access' subscription services, newly launched by Sony, J-pop label-backed RecoChoku, and carriers
Recorded music retail sales in Japan were flat in 2012 at $5.8 billion on the unexpected bounceback o [...]
July 8, 2013 Reports
By the end of 2013 there will be more iOS and Android devices in use than PCs. Google is using Plus and Android to reposition itself to take advantage of this, extending its reach and capturing far more behavioural data. We believe a helpful way to look at Google is as a vast machine learning project: mobile will feed the machine with far more data, making the barriers to entry in search and adjacent fields even higher. For Google, Apple's iOS is primarily another place to get reach: we see limited existential conflict between the two. However, mobile use models remain in flux, with apps and mobile social challenging Google's grip on data collection.
By the end of 2013 there will be more iOS and Android devices in use than PCs. Google is using Plus a [...]
March 8, 2012 ReportsApple refreshed the iPad yesterday, delivering few surprises, a market leading product and a set of features that we expect to ensure continued dominance into 2013.Apple refreshed the iPad yesterday, delivering few surprises, a market leading product and a set of features that we expect to ensure continued dominance into 2 [...]
February 12, 2012 ReportsEnders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 19 January 2012. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. An edited transcript of notes taken during the speaker presentations follows.Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 19 January 2012. The event featured talks by 13 of t [...]
February 9, 2012 ReportsAround 125m smartphones and over 20m tablets were sold in Q4 2011. If tablets are included, Apple is now the largest PC manufacturer, while smartphones are now outselling PCs. These devices are the battleground for a war of ecosystems in which Apple's iOS and Google's Android platforms are dominant and others are hoping for third place at best. iOS and Android sold around 92m units in Q4 and now have an active base between them of around 515m devices. Samsung now accounts for at least half of Android sales and is in some senses more of a rival to Apple than Android itself.Around 125m smartphones and over 20m tablets were sold in Q4 2011. If tablets are included, Apple is now the largest PC manufactur [...]
January 30, 2012 Reports
Apple has begun selling interactive textbooks via its iBookstore, a move which is likely to accelerate the digital transition in education. However, the pace of change will be slowed by the cost of devices and the limited number of textbooks that have been designed for tablet computers. By developing educational software and course materials, Apple is trying to position the iPad at the centre of students' educational lives a niche that could significantly boost its hardware sales.
Apple has begun selling interactive textbooks via its iBookstore, a move which is likely to accelerat [...]
January 13, 2012 Reports
The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT. Unlike in the US, Netflix's UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free. The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US.
The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top vi [...]
December 9, 2011 Reports
Apple has now sold 40m iPads we estimate 4 to 5m in the UK and goes into the Christmas season with no credible competitors beyond Amazon's Kindle Fire, which is so far only available in the USA. Android phones are selling in huge numbers at half the price or less of the iPhone, but would-be iPad competitors are the same price or higher. With the continued absence of a meaningful content ecosystem for Android tablets it is hard to see consumers buying them in substantial numbers. Competing Android tablets have sold around a tenth as many units as the iPad, but others have sold far less: RIM's PlayBook has been a major disappointment, forcing RIM to write off $485m of inventory.
Apple has now sold 40m iPads we estimate 4 to 5m in the UK and goes into the Christmas season w [...]
November 7, 2011 Reports
Nokia has launched its comeback with two very solid Windows Phone devices at 420 and 270. Next year Nokia, like Apple, will have handsets with uniquely appealing industrial design. However, Nokia will not launch in the USA until 2012 and needs to add cheaper smartphones to the portfolio. Nokia and Microsoft face a hard struggle in establishing a third mobile app ecosystem. However, it is not impossible (Google has managed it in 18 months) and given more devices and the right execution they could manage it. 2012 will be the critical year. We believe that the flaws in the Android proposition mean there remains a real window of opportunity. However, if Apple launches a cut-price iPhone then the market will be turned upside-down, again.
Nokia has launched its comeback with two very solid Windows Phone devices at 420 and 270. Next ye [...]
October 19, 2011 Reports
Apple is now a $108bn company, with annual revenue up 66% from a year ago and 40% gross margins. September quarter iPhone sales dipped to 17m ahead of a new product launch, but Apple still sold 72m in the last 12m, compared to 40m in the 12m to September 2010. Apple has now sold 40m iPads for $20.3bn revenue, and 11m in the last quarter. All other competing devices have sold perhaps 4m. We expect Apple's dominance to continue through 2012 and potentially beyond. Google's Android sold even more smartphones than Apple, activating 150m in the last 12m and 55m in the September quarter. Yet in October Apple sold 4m of the new iPhone 4S in just three days, bringing in around $2.6bn: Google's annual run-rate mobile revenue is now $2.5bn.
Apple is now a $108bn company, with annual revenue up 66% from a year ago and 40% gross margins. Sept [...]
October 5, 2011 Reports
Amazon has taken the ereader to $79 and the tablet to $200. The Amazon Fire is everything that Android tablets are not: a coherent high-quality user experience rather than a box of components. It will sell well, while new sub-$100 Kindles will reinforce Amazon's dominance of ebooks. Amazon began as a bookshop, but just 30% of Q2 North American sales were physical media of any kind. The Fire is part of a broader strategy to embed Amazon in online buying of everything from shoes to nappies to iPads and TVs. The Kindle Fire is a shop window on every coffee table. Media companies should not expect Amazon to be a more congenial partner than Apple. Amazon's long-term stake in the health of the books or magazine industries is limited: the Kindle is a new way to reach readers and viewers, but not a saviour.
Amazon has taken the ereader to $79 and the tablet to $200. The Amazon Fire is everything that Androi [...]
October 4, 2011 Reports
Apple will release the iPhone 4S later this month, with substantially upgraded internals but the same design. Despite disappointment at the lack of something with a 5' on the box, this is a solid update that maintains Apple's competitive positioning. The most significant omission was a lower-priced iPhone. Apple sells the 3GS and now the 4 at lower prices, but lacks a dedicated device to address the sub $300 (SIM-free) market where most future growth will come from. We think this is only a matter of time. Apple's new Siri' voice assistant looks very impressive as a USP. If it works, and spreads, it will join apps as a structural problem for Google, drawing people away from web search.
Apple will release the iPhone 4S later this month, with substantially upgraded internals but the same [...]
August 18, 2011 Reports
In this report we outline the current state and likely development of the war between mobile platforms. We discuss installed bases and activity levels, the key issues facing Apple and Android, including Android fragmentation and Google's acquisition of Motorola, and go on to look at the tablet market and the outlook for RIM, Nokia and Windows Phone.
In this report we outline the current state and likely development of the war between mobile platform [...]
July 27, 2011 Reports
CPW Europe had a weak first quarter, with like-for-like revenue growth of -3.3%, with all of the drop coming from the 18 to 24 month contract length shift in the UK. We expect its performance to improve through the rest of its fiscal year, but it will need to in order to hit even the bottom end of its full year guidance. The US mobile retailing operation is doing much better, with very strong revenue growth, and is likely again to exceed full year guidance.
CPW Europe had a weak first quarter, with like-for-like revenue growth of -3.3%, with all of the drop [...]
July 13, 2011 Reports
Apple has now sold 25m iPads since launch, worth $15bn, and will probably sell 40-50m in 2011. Competing tablets have sold perhaps 2-3m in total so far and will not be competitive with the iPad until 2012 at the earliest. Android phones are now far outselling iPhones, but benefit from a narrower user experience gap and from selling at a half of the price. Android tablets must compete with the iPad at the same or higher price points, a far harder task. We believe it is possible the iPad will retain a 50%+ share. Media companies have veered from euphoria to outrage when contemplating the iPad and its autocratic creator. Android offers them little chance of either in the near future.
Apple has now sold 25m iPads since launch, worth $15bn, and will probably sell 40-50m in 2011. Compet [...]