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Thursday, December 30, 2010
 2011.. New Consumers, New Markets, New Economy Take Hold
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Message Text: Let's start by saying 2011 is going to be the year we wanted three years ago when the financial institutions "borrowed" our global wellbeing.

It was the first time we entered unfamiliar territory because the financial meltdown didn't affect just one country but all of us.

Economic Outlook

Internationally governments are feeling their way along the precipice because the depth and duration of the recession was beyond what most could clearly recall. They are moving - hesitantly - but still slightly dazed by the headlights of the near miss.

At the same time the U.S. government ground to a near halt because of the partisan politics that could last for two years.

Fortunately as in past recessions companies have finally become sick and tired of being sick and tired and realized that government - any government can't move things forward... it is up to business to get the job done!

Most of the 80+% of the employed U.S. population (10% tracked unemployed, 8% dropped off the grid) are certain that conditions are and will continue to improve. This was apparent over the holiday buying season where PC/CE/communications sales increased more than 7% with a greater percentage being cash sales?resisting mounting additional personal/family debt.

While company management is optimistic about growth they are paying closer attention to market changes, have enhanced their risk management and have much more effective, stringent cost control efforts in place.

That undoubtedly means low to modest workforce expansion and greater attention to product line extensions rather than revolutionary new product introductions at least for the next two years.

Or to put it another way, more workload/more performance pressure placed on the existing workforce until staff expansion is almost impossible to avoid.

Translation? you need someone who will empathize with you.

Content Flood

Audio and video content is driving, affecting almost every segment of the industry - pipelines, production/viewing systems/screens, professional/prosumer/consumer producers, distribution/storage providers.

Household bandwidth demand will more than triple this year.

Wired and wireless provisioning will be expanded as rapidly as possible around the globe but it will be only marginally in place by the end of 2011.

Provisioners are now looking more closely at their previous friends - now competitors.

Eating away at the telco and cable service providers' sales increases will be such firms as Netflix, consumer "rights" entertainment provisioners such as ivi.TV, businesses increasing their use of video in their marketing efforts and the growing spectrum of YouTube/similar video sites.

Since most consumers don't know what level of service they have (iPhone 4ers think the device delivers 4 of "something"), providers in the U.S. are rushing to "enhance" their voice/data/video services with their version of 4G.

Sprint initially announced 4G service but in fairness 4G standards hadn?t been established at the time. With the new standards Hess has phased out the advertising terminology.

This has not slowed T-Mobile and Verizon to promote their versions of "real 4G."

Oh sure they don't come close to the ITU (International Telecommunication Union) recently published 4G standards?that will be "a little more costly!"

Don't worry the FCC (Federal Communications Commission) will monitor it, protect you... yeah right!!!.



Making the iPhone to more than just AT&T customers will folks what they've been missing.

Consumers will be able to experience the same volume of dropped services as AT&T customers endured.

In 2011 because of the growth of data/content service demand U.S. providers will finally do more than just float tiered-service trial balloons. They will implement it across the board.

Home Content Viewing

Connected TVs and the associated peripherals will continue to move very well for the next two years delivering more than 100M units WW by the end of next year.

Internet-based content services will be the fair weather solution for the 15-20% of people who are early adopters and don?t treat their entertainment as a passive activity.

While the majority of the buying public will purchase the connected TVs will use Netflix and Roku time-shifting solutions rather than online search.



Time-shifting and download video services will significantly impact disc rentals/sales.

By 2015 the video/movie industry will be serving only niche market segments with discs.

Mobile TV/content viewing - along with all web service uses -- will be a rapidly expanding millennial user's form of entertainment.

In about two years, manufacturers will switch set production to 3D. The increase in manufacturing cost is minimal. Production switch over won?t take place until 2012 when content volumes/consumer demand will reach the all important tipping point.

While 3D TV sales didn't meet most overly optimistic projections this year the technology is far from withering.

Set sales will double (about 8M units) in 2011 and surpass 80 M units by 2014 in the U.S.

This will be stimulated not just by manufacturers and their educational marketing efforts but also by:

- Double the number of sporting events in 3D
- More than 150 TV specials in 3D
- At least 10 3D series pilots by the end of the year
- VOD, streaming 3D movies to the home will be "standard" fare by Q3
- Significant reduction of the premium pricing of 3D sets, players, peripherals - including low-cost 3D cameras/camcorders which will easily transfer content to 3D PCs, TV sets

Content at Rest

Despite a major increase in malware, cybercrime in the coming year; cloud storage will become a major storage solution for home and business as people increasingly use smartphones, tablets, netbooks as primary communications/entertainment devices.

These devices will primarily rely on minimalistic flash memory and SSD storage (typically 32-64GB capacities).

However the prime storage medium will continue to be hard drives in corporate and cloud storage farms as well as SMB (small to medium business) and home applications.

It is important to note that by the end of 2011 more than 45% of the HDs sold will be hybrid units (flash front-end to mass storage device). By the end of 2012 more than 60% of the units will be hybrid.



By mid-2011 4TB external HDs will be on the market as always very aggressively priced.

Base storage for mobile computers will be 500GB with power user systems using 1TB drives. Home servers will predominantly be 2-4TB units.

Microsoft?s Return

It is necessary to do what Apple Kool-Aid drinkers do so well..blow their horn.

They have been nimble and correct more than anyone in a fickle consumer marketplace.

Executive and middle management iPhone, iPod, iPad users have brought the company's products into the enterprise more successfully than a full-press marketing effort could have ever achieved.

While certainly not taking tips from the Jobs' playbook, 2011 will be the year that Ballmer finally transitions Microsoft from a software company to a versatile, efficient, effective service organization.

Google will continue to progress only in the area they have historically carved out for themselves - click-thru sales.

But the physical and fiscal foundation MS has built-out for organizations of all types coupled with cloud services/support they will have to share with others like IBM, Amazon, EMC and others will return them to the good graces of the world's economic engine and possibly the shareholder community.

Businesses in all of the computer/CE/communications sectors will move forward cautiously.

Consumer - business and individual - optimism/investment will rise slowly, steadily in 2011.

But it will take years before we lift our heads from the proverbial grindstone and see the world through rose colored glasses again.
 
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