GigaOM

In Europe, DSL continues to post gains with an expected annual growth rate of 22% in the consumer/SOHO market through the year 2009, according to a new report from Probe Group. “DSL connectivity has only recently been launched in much of Eastern Europe with limited availability in most countries in that area,” comments Probe Group Research Director Alan Mosher. This clearly would be good news for European DSL equipment vendors such as Alcatel, Nokia and Siemens along with Chinese companies such as ZTE Corp and UTStarcom. The chinese vendors are coming on strong in Eastern Europe, which is more price sensitive than US or other developed parts of the world. It would be rather interesting to see how Europeans’ deal with ADSL2 and future mega-broadband versions of DSL technology!

TiVo should take solace in the fact that it invented a new product category, the personal video recorder. What it should worry about is how quickly it has gone from being a stand alone device to becoming a tack-on feature in other purpose devices. And if you though that was enough, wait for this new chip from ATI to hit the market. ATI’s new Theater 550 Pro does audio and video decoding on the same silicon - a first for the Theater family - which ensures audio and video remain in full synchronisation. The 12-bit video decoder features 3D Comb Filtering for NTSC and PAL, and five-line 2D Comb Filtering. ATI wants to integrate this chip directly into the PC motherboard, especially for the lap-tops. Acer, Compal, Quanta and Wistron have committed themselves to building the 550 Pro into upcoming laptops, The Register says.

I think this is a brilliant move - add PVR right on the motherboard, and then you give those “download services” a chance to thrive. Why? Well lets assume you have a tiny 384 KBPS DSL connection at home, but a big fat pipe at work. You can quickly download all the stuff you want from one of the “video content” providers, bring it home and well play back on your TV. Of course, you could do the traditional PVR stuff as well, since it is after all a PVR on a chip. (So that you can watch last night’s Baseball Tonight at work, fooling your boss that you are hard at work behind the closed doors. Oh… now one needs to worry about storage capacity on the laptops. Sigh!

And the winner of the MGM auction is Sony. Sure it cost them about $5 billion, but then MGM is a must have prize for Sony which is slowly and slowly losing its relevance in many hardware businesses and increasingly depends on software to save its sushi. Time Warner backed out of the auction and that means they must be getting serious about buying Adelphia. Makes sense… long term competitive edge is going to be with the company with maximum number of subs. Despite that Comcast is thrilled about Sony-MGM deal.

The Disney disaster not withstanding, Comcast wants to be a major content player. Lost in the details of the big merger, a tiny detail which might be overlooked. Comcast and the Sony group have agreed on an arrangement that will enable the cable giant to distribute Sony Pictures and MGM content on its VOD platform.  A joint venture will be created and managed by Comcast, with the aim of creating new cable channels that feature Sony and MGM content.  Finally, the deal with Sony reportedly gives Comcast the opportunity to acquire a minority interest in MGM for approximately $300M.  Comcast and Sony say they will move forward on their distribution deal, regardless of whether the MGM acquisition is completed. In real world it is called dipping one’s toes. Comcast has done exactly that.[ Press release @ Yahoo ]

iPod Aftermarket is how Jeff Nolan describes the whole ecosystem that has cropped up around IPod. It is nice to hear that the editors of Business 2.0 were not alone in spotting this after market, “In the consumer hardware world you know you’ve hit it big when an entire aftermarket industry develops around your products,” writes Nolan. We have come to the same conclusions and have a nice big piece titled The IPOD Economy in the next issue of Business 2.0.

Albert Lin of independent American Technology Research sent out a very interesting note this morning to his clients, outlining why Motorola v710 is going to be a massive hit for Motorola and prove a reason for financial upside for both Moto and Qualcomm. Lin estimates that Motorola will sell about $100 million worth of phones through the year, enough of a reason for RadioShack to pre-announce upside and increase full year revenue and earnings targets and mostly because of v710. Verizon could sell 100,000 units of this and at about $450 net this could mean $45 million in sales for the current quarter and $250 million for the fourth quarter.

Motorola v710 will boost sales for Motorola, but should also serve to raise ASPs. As the first major TransFlash enabled phone, SanDisk may gain more attention and sales momentum for this new product category going forward. The V710 is a CDMA 1X phone based on Qualcomm’s ASIC and the high ASP should benefit QCOM from a royalty angle even more than from the chipset sale, as we expect Motorola to experience 15%+ Y/Y ASP gains.

Here are some of his arguments about the phone is so hot:

• Best color screen - he is right on this one, though after three days of use, you have the keys of the phone scratching the screen.
• Best camera: ha ha ha haaaaaaa. dude take some photos and see the quality before you make this statement. Try one of the Sharp, Nokia or Samsung phones and learn what “best camera” means.
• MP3 Player - A non-stereo headphone jack a terrible design oversight. Please! Also cannot send Mp3 files to the phone to set as ring tone.
• Speakerphone: Try using the speakerphone. Sometimes the design flaws in the phone accidentally turn on the speaker phone. What if you are having a one-sided dirty conversation with your better half and hit speakerphone in Starbucks. I rest my case.

What could a hot phone be to Motorola? The V3 RAZR to beat that record shortly. Except I get a feeling it is late by a few months. They sent us a phone which was a phone except it could not make phone calls. Lin makes a very compelling case, however untrue. and misses the crucial point - the recent backlash against Verizon’s decision to “cripple” the phone. I think Lin might be setting expectations too high, and the phone is not going to be a huge hit. From recent conversations with actual users, v710 is going to a thud, especially when customers are disappointed it could lead to a consumer backlash. And that is happening right now as we speak to some extent. And dude when early adopters, also known as “money bags” who pay for the latest phone don’t like the phone and bitch about it on SlashDot, you know it is not a hot phone!

Lots of talk about downloading music over the air to your cell phones, and perhaps time for a little reality check, especially if you live outside of North America. If you download one 4 megabyte MP3 song over the air using a GPRS plan - and i am talking about purely in data size and not in minutes of use - it will cost you about $72 in Western Europe. And this is despite a 13% decline in pay-per-use GPRS prices since May 2003. Strategy Analytics director, Phil Taylor, notes “With over 85 percent of GPRS users on pay-per-use plans, operators need to find ways of making data services more affordable to the mass market.” A Strategy Analytics study points out that carriers are beginning to recognize this pricing problem and trying to come-up with more simple plans. In this aspect, one had to give respect to T-Mobile.

Multimedia networking will drive the home networking semiconductor market over the next five years, as revenues grow 12% per year to reach over $2.3 billion in 2008, according to In-Stat/MDRAs more and more devices are getting connected, it spells opportunity for silicon vendors. In-Stat/MDR believes will be a $700 million market by 2008. 802.11n will begin shipments in 2006, and as the first technology that will enable wireless video networking for the majority of end-users, strong demand will translate to this variant of Wi-Fi. It will account for 55% of the consumer WLAN IC market by the end of the forecast.