Meet our expert Analysts at CES

Request a briefing with the Parks Associates Analysts or a meeting with our Parks Associates Business Development Team to discuss your research needs while at CES 2011 on January 6th.

Farhan Abid, Research Analyst

INDUSTRY EXPERTISE
Home Systems, Energy Management and Smart Grid Technologies, Entertainment Systems, Home Systems Integration Channel, Home Builders

Bill Ablondi, Director, Home Systems Research

INDUSTRY EXPERTISE
Home Systems, Home Controls, Energy Management and Smart Grid, Home Security, Entertainment Systems, Home Systems Integration Channel, Home Builders and Multifamily Executives

Pietro Macchiarella, Research Analyst

IINDUSTRY EXPERTISE
Gaming Content and Services, Game Consoles, Connected Consumer Electronics, 3D TV Technologies and Services, Consumer Storage Products and Services

Laura Allen Phillips, Research Analyst

INDUSTRY EXPERTISE
Digital Media, Online Video, Digital Music, Social Networking, Consumer Storage and “Cloud Media” Services & Technologies

Brett Sappington, Senior Analyst

INDUSTRY EXPERTISE
Residential Broadband Services, Digital Television Services, Value-added Services, Interactive Technology and Services, TV Everywhere, User Interfaces, Set-top Boxes

Kurt Scherf, Vice President, Principal Analyst

INDUSTRY EXPERTISE
Home Networks & Residential Gateways, Home Networking Media (Wi-Fi, G.hn, HomePlug, MoCA, etc.), Set-top Boxes, Connected Consumer Electronics, Consumer Storage Products and Services, Media Server Hardware and Software, Value-added Services, Online Video, Consumers and Digital Entertainment, Digital Home Technical Support Services

Harry Wang, Director, Health & Mobile Product Research

INDUSTRY EXPERTISE
Digital Health Products and Services, Portable and Mobile Access Platforms and Applications, Digital Imaging Products and Services

Heather Way, Research Analyst

INDUSTRY EXPERTISE
Digital Media, Emerging Advertising Technologies, Digital Video Advertising

Number of smartphone users to quadruple, exceeding 1 billion worldwide by 2014

The demand for smartphones is creating a demographic shift among users, who will exceed 1 billion worldwide by 2014, stimulating demand for more entry-level models that offer mainstream solutions such as mobile email and social networking applications, according to Parks Associates’ Smartphone: King of Convergence.

This new report includes consumer data from Parks Associates’ primary study Mobile Convergence: Platforms, Applications, and Services. This consumer survey finds only 30% of current smartphone users are the stereotypical young and tech-savvy aficionados.

The other user segments exhibit more mainstream demographic attributes and more divergent usage patterns. One such segment, dubbed “pragmatists,” consists of budget-conscious, middle-aged users who prefer mobile email service over Internet access. Another group is keen on the smartphone’s communication features, ranging from mobile Internet to social network access.

Smartphone: King of Convergence tracks smartphone sales and market shares and analyzes carrier strategies, new mobile applications and services, and mobile technology trends. Mobile Convergence: Platforms, Applications, and Services is a survey of U.S. mobile consumers about ownership and attitudes regarding mobile devices and services.

For more information, visit http://www.parksassociates.com/mobile.

Parks Associates at CES: Connected devices, 3D content, storage, and support services will provide new opportunities for industry growth in 2010

Parks Associates market analysts will present new research and provide insight and commentary about new business strategies, new technologies, and consumer demand for connected CE and services at multiple speaking events during the 2010 International CES (Consumer Electronics Show).

Parks Associates will host the fourth-annual CONNECTIONS™ Summit: Monetizing Connectivity in the Home on January 7, the first day of CES. The analysts will also participate at Digital Media Insider, Digital Health Summit, and Digital Hollywood on January 8 and 9.

CONNECTIONS™ Summit will kick off CES on Thursday, January 7. The Summit will feature interactive panels with over 20 leading technology companies including IBM, Yahoo!, and Sony. Executives will discuss business strategies for service providers, status of energy management deployment and adoption, and the changing CE purchase patterns for consumers.

Parks Associates will also participate in the following CES events:

- Kurt Scherf, VP & Principal Analyst, will speak at an Analyst and Press Roundtable “What’s the Scoop at CES?” at Digital Media Insider @ CES on Friday, January 8, 3:15-3:55 P.M. at The Venetian, Las Vegas, Ballrooms 3204-05/3304-05.

- Harry Wang, Director, Health & Mobile Product Research, will participate on the panel “Consumers Driving Healthcare: Capitalizing on the Opportunities” at Digital Health Summit at CES on Saturday, January 9, 9:00-9:45 A.M. in LVCC, North Hall, Ballroom N253.

- Heather Way, Research Analyst, will moderate the panel “Internet Video, Advertising & Marketing: The Next Generation of Consumer Reach” at Digital Hollywood @ CES on Saturday, January 9, 10:30-11:30 A.M. in the LVCC, North Hall N261.

Interactivity, competitive business models, and value-added services driving expansion of the digital lifestyle

Consumer demand for interactivity in entertainment and control at home is driving adoption in technology products and services, according to Parks Associates analysts at CONNECTIONS. The conference focused on access services, video delivery, online content services, advertising, digital health, digital media, and home systems. Parks Associates forecasts over 400 million households worldwide will have digital television services by 2012.

ADVANCED TELEVISION
Kurt Scherf, Vice President and Principal Analyst, highlighted key developments in advanced television services and discussed future areas of focus, including bandwidth issues and the “interactive experience” enabled by VoD, widgets, and advertising. Currently the lack of easy, high-quality connections between VoD services and the TV is a key inhibitor to the growth of the broadband VoD market. Parks Associates expects to see an increase in products and services aimed at connecting content to platforms in 2008 and beyond.

PORTABLE DEVICES
John Barrett, Director, Research, highlighted recent findings from National Technology Scan 2008, a telephone survey of U.S. households. “In the past year, approximately 45 million households purchased a mobile phone, 29 million purchased a digital camera, and 27 million purchased an MP3 player,” Barrett said. “Portable devices are clearly capturing the consumer's attention right now more so than stationary devices."

BROADBAND
Michael Cai, Director, Broadband and Gaming, spoke about the changes in the broadband market. He predicted the next competitive cycle will center on bundles and value-added services. “Telcos will focus on multiplay bundles and value-added services, forcing a response from cable MSOs,” Cai said. “The increased importance of customer retention will lead to new and more intense rounds of loyalty programs and other customer retention tactics.”

HOME SYSTEMS
Bill Ablondi, Director, Home Systems, highlighted growth in home systems, stressing their expansion into broader markets, including areas such as multiple-dwelling units, which represent new opportunities for digital systems and services. Also, remote home monitoring services offered through telco/MSO service providers will revolutionize the traditional home security business as broadband services disrupt yet another business model. Parks Associates forecasts that self-monitored households will nearly triple to more than 6 million by 2012.

PERSONAL HEALTH
Harry Wang, Director, Research, discussed personal health solutions. Parks Associates predicts this space will achieve $2.5 billion in U.S. device and service revenues by 2012. “There are significant barriers to overcome, but consensus is forming that technology can help empower consumers and health professionals in achieving better care at lower costs,” Wang said. “Now the technology industry must work with the health community to extend adoption to a broader patient population and convince the health ecosystem of the value of personal health technologies.”

Parks Associates analysts present insights on broadband, digital content, advertising, home systems, and digital health at CONNECTIONS™

Parks Associates’ leading analysts will explore the implications of high-speed connections and the exponential growth of digital devices in homes as a kickoff to CONNECTIONS™: The Digital Living Conference and Showcase.

The session Analyst Roundtable: Top Trends to Watch, Tuesday, June 24, will feature analysis of the digital living industry and focus on trends in broadband and access services, video delivery, online content services, advertising, digital health, and home systems.

The session will feature Kurt Scherf, Vice President, Principal Analyst; Bill Ablondi, Director, Home Systems Research; John Barrett, Director, Research; Yuanzhe (Michael) Cai, Director, Broadband & Gaming; and Harry Wang, Senior Analyst.

Consumer habits in entertainment are changing in accordance with this surfeit of new devices and services. As of 2007, 50% of U.S. Internet households were watching short video clips online, and 25% were downloading short video files. DVR household penetration reached over 40% of the U.S. online population in 2007, further increasing the place-shifting aspect of video consumption.

Parks Associates designed Analyst Roundtable: Top Trends to Watch to offer a complete and coherent presentation of these digital markets as well as the perfect primer for CONNECTIONS™.

Behavioral Targeting and Consumer Privacy: New Media's Paradox

by Harry Wang, Research Analyst, Parks Associates

Contextual targeting is widely used in both the offline and online advertising worlds. But the wild-card nature of behavioral targeting could revolutionize how marketers interact with their target audience in an online world. Behavioral targeting is based on a proven assumption that the Web pages people visit and where they go from those pages indicate at least a presumptive interest in products related to the page topics. For example, repeat visits to a Web page featuring reviews for camcorders, coupled with subsequent Web visits to major electronic retailers, clearly indicates at least a curiosity about camcorders. If this type of data is combined with other Web traffic such as visits to baby portrait services, baby travel kits, and vacation packages, the marketer can be quite confident that this particular user plans to buy a camcorder to film a baby, perhaps during an upcoming trip. As a result, advertisers not only have in-depth knowledge of the customer but also can purchase ads along this user’s future “Web trail,” instead of serving ads only to camcorder-related Websites. Some publishers find behavioral-based targeting very useful for selling undervalued ad inventory.

For instance, The Wall Street Journal reported that in the past, NBC Universal Inc.’s iVillage found it difficult to sell ads next to its astrology section because few products and brands correlate directly with astrology. But “by identifying a particular consumer [through behavior targeting] and delivering an ad tied to his or her interests, that same ad spot is worth a lot more,” said Peter Naylor, senior vice president of digital media sales for NBC Universal.

Technology vendors have been trying for years to translate online behaviors and consumption habits into predictable product and service needs so that advertisers can deliver the appropriate marketing messages at the right moment and on the right Web pages. Over the last two years, their work has finally caught the attention of advertisers and publishers. Ultimately, contextual and behavioral targeting should and will be integrated to give advertisers the most reliable information about their audience’s interest and their surfing patterns. This level of granularity is a marketer’s dream but can easily trigger privacy concerns if the issue is poorly handled. Facebook’s original ad-targeting policies caused such a stir that the company eventually had to backtrack to pacify its users. Advocacy groups have already called on the federal and state governments to tighten privacy regulations in light of this and many other events that they say have given them grave concern over online properties’ ability to protect Web users’ privacy. Currently, the debate over privacy protection is centered on how advertisers use personal identifiers and whether behavioral targeting should be “opt-in” versus “opt-out.” (“Opt-in” means that consumers must give explicit permission; otherwise, advertisers/publishers cannot track consumer behaviors online. “Opt-out” is just the opposite: advertisers/publishers can track consumer behaviors online unless consumers explicitly notify advertisers to “opt-out.”) Marketers are leaning toward “opt-out” and argue that this policy is consistent with precedent set by anti-spam policies. Consumer privacy groups, however, are pressing for “opt-in,” and many want the creation of a “Do-Not-Track” list that allows consumers to opt out completely of all behavioral profiling and targeting. Marketers are lobbying hard against such a list for fear of a similar devastating effect that the “Do-Not-Call” list had on the telemarketing industry. They also point out that audience targeting differs from telemarketing because better targeting feeds consumers with the most relevant information that helps them make informed decisions.

This debate will continue until technology vendors and the business community come up with privacy guidelines for behavioral targeting to assure consumers and their privacy right advocacy groups. Technology providers can shore up support if they not only give their promise in writing but also design a data-scrambling mechanism that makes it difficult for anyone to extract personal information from an online behavioral database. Such a mechanism also needs to be independently verified for its intended use. The advertising industry might have to cough up additional funds to cover these extra efforts, but as the old saying goes, “No pain, no gain.” It is the only way for the advertising industry to move beyond this controversy and pursue a growing new media advertising market, which is expected to hit $12.6 billion in 2012.

This article was published for the 2008 CONNECTIONS™ Conference Industry Insights, the official publication of CONNECTIONS™.

Choice of Storage Media for Multimedia Players

by Harry Wang, Sr. Analyst, Parks Associates

Unlike in the digital audio player market, the fight between NAND flash and hard-disk drive (HDD) on the PMP platform is far from over. The 1.8-inch HDD still has a firm grip on the PMP category that requires storage capacity of 20 Gigabyte or higher due to the cost per byte advantage over NAND flash. Our consumer survey indicated that among PMP owners, hard drive-powered devices still account for a slight majority of the ownership. On the other hand, the micro-drive segment (1-inch or the 0.85-inch HDD), which features a capacity ranging between 4-12 GB, has been hit hard by the NAND flash as its cost-per-byte lead—which it enjoyed during 2003-2005—has dissipated, and NAND flash’s merits (durability, low power consumption, and light-weight) earn it the preferred status for the low storage PMP category.

1.8-inch HDD makers, mainly Toshiba, Hitachi, Seagate, and newcomer Samsung, are fully aware of the threat the NAND flash is posing to their HDD business for portable CE market. Therefore, their battle strategies include:

1) Maintain the cost advantage by enhancing capacity at the same cost. In September 2007, Toshiba launched two new 1.8-inch HDD models: one with 80 GB storage using a single platter, and the other doubling the capacity using two platters. Samsung made a similar announcement two weeks earlier.

2) Dress up the HDD with features that make it slimmer, more energy efficient, and more durable. For instance, the 60GB, 1.8-inch HDD from Samsung or Seagate is measured at only 5mm (0.2-inch) thin. The latest Toshiba 160GB model consumes 0.32 watt of power in idle condition, compared with the 1.5-watts industry average. And Seagate has long been touting its G-force technology, an anti-shock feature that protects the drive by moving the heads off the platter when the device is powered off, thus during a drop, no parts make contact with the media inside the drive. All of these features are aimed at keeping HDD as a viable option for portable device manufacturers.

3) Support CE-ATA, a portable CE-friendly storage interface. The new interface standard replaces the Serial ATA, an interface well-suited for mainstream computing applications that emphasize faster data transfer rates but care less about power consumption. CE-ATA, on the other hand, addresses well the key challenges of a PMP design: cost-effective integration and maximum power efficiency. The CE-ATA Specification 1.0 was finalized in March 2005. Since then, Hitachi has been a strong promoter of the new standard; Seagate has also conformed to the standard in its latest 1.8-inch HDD models. But Toshiba and Samsung support both the CE-ATA and the legacy PATA interfaces on their 1.8-inch drives.

On the other side of the aisle, flash memory manufacturers are gearing up their production capacity and re-drawing the roadmap to further challenge the HDD’s role in the market for portable entertainment devices. According to the theory first publicized in 2002 by Dr. Chang Gyu Hwang, president and CEO of Samsung Electronics’ Semiconductor division, flash can double its density growth every 12 months. Like the famous Moore’s Law, the prediction has worked out quite well over the last five years as NAND flash storage capacity grew from 256 MB in 2002 to 16 GB in 2007. Apple has already incorporated the 16GB NAND flash in its latest iPod Nano models. If the theory continues to hold, the next milestone will be 32 GB in early 2008. It will be just a matter of time before the manufacturers to ramp up production and bring the cost down to a market-acceptable level. Samsung debut the world’s first 32GB flash card in September 2006, followed by SanDisk in January 2007. And in early 2008, Apple released its latest iPod Touch with 32GB flash memory—just what we have predicted for this capacity flash memory to go mainstream.. Looking ahead, flash is expected to reach 60GB or higher during the 2009-2010 timeframe, at which point it will begin to take away the medium-storage PMP market share from the 1.8-inch HDD manufacturers. Companies that do not have assets in the flash business have come to grips with such a trend. Seagate, for instance, has not only produced hybrid drives mixing both flash and HDD, but also announced plan in September 2007 to make flash-based, solid-state disks from 2008, a measure to hedge its bets in the consumer electronic market, in our analysis.

This article was published for the 2008 CONNECTIONS™ Conference Industry Insights, the official publication of CONNECTIONS™.

Market Demand for Connected Medical Monitoring Devices

by Harry Wang, Director of Research, Parks Associates

About 90 million people in the U.S. suffer from one or multiple chronic conditions, with diabetes, cardiovascular diseases, and respiratory conditions having the highest prevalence. These conditions are also the most suitable for medical monitoring devices. Glucose meters and test strips are a multi-billion dollar business in the U.S. (industry data pointing to annual revenue of more than $3 billion). Blood pressure monitors are another widely used monitoring tool for patients with cardiovascular risks. Digital weight scales can serve both conditions, and their popularity is on the rise. Over the last few years, manufacturers of these mass-market medical diagnostic tools have begun to add a USB interface and expand internal memory so that users can download measurement data to their home computers. Software accompanying the devices can help users to perform basic charting and trend analysis on the computer, completing a “Do-It-Yourself” kit.

Less understood and lower-volume home diagnostic devices include cholesterol test tools, pulse oximeters, body fat meters, electrocardiograph (ECG) monitors, and spirometers. An emerging category is focused on using motion and environmental sensors to detect accidental falls, night seizures, urinary incontinence, mindless wandering, and disruptive sleep patterns, conditions that are most detrimental to a senior’s life quality. However, these devices are built on the latest technologies, which means that they are less mature and reliable and usually come with a higher price tag.

The benefits of connecting these devices to a network and transferring health data for remote monitoring and diagnosis are multi-fold. First, the data will be put in the hands of a professional who can make a better judgment of the patient’s conditions. Second, patients with multiple chronic conditions will be examined based on a complete set of information coming from multiple device readings. For instance, an irregular reading of ECG data plus an abnormal weight gain can point to a greater need for clinical intervention versus ECG readings alone. Connectivity helps synchronize data collection so that caregivers can have the right information at hand to make a decision. Third, connectivity makes real-time data collection possible. Fourth, continuous data collection can reveal better patterns than episodic measurements, another means for caregivers to make an informed decision. For example, human blood pressure fluctuates throughout the day. Episodic measuring only gives isolated data and may miss the peak and trough points that deserve physicians’ attention for cardiovascular care. Based on continuous data, physicians can make better recommendations to their patients on the timing and dosage of anti-hypertension drugs and the amount of cardio exercises during the time of the day. Finally, connectivity improves patient compliance. Manually saving and forwarding data can be a hassle for the users of multiple measurement devices. Inconvenience can lead to low compliance, which undermines the benefits of home monitoring. Automating the process and making it portable anywhere the patient goes through connectivity solutions will make patients more willing to cooperate with the monitoring regimen.

Connected medical monitoring devices serve three types of patients well.

• Seniors with chronic and aging conditions

• People with one or more chronic conditions

• People with a strong desire to stay fit and well

These three segments have considerable overlapping portions. The Medicare population, for instance, encompasses all three segments. On the other hand, not all people in these segments are qualified users of the technology. Those with a considerable disability are perhaps better off in the hands of home care aides, living in a nursing home, or being treated at the hospital. Patients with severe dementia symptoms are not a good fit due to their lack of cognitive ability to use the devices properly. Therefore, although the potential market is big, the total addressable market for connected medical monitoring devices is smaller. Parks Associates estimates that between 22 and 25 million people were the appropriate target population of this application in 2007. As demographic trends favor this application and consumer awareness is on the rise, we expect the total addressable market to continue expanding over the next five years, reaching between 44 and 48 million people in 2012.

Medical device makers are thus put in charge of arduous but potentially very rewarding tasks: incorporating the latest technology into traditional medical devices for diagnostic and monitoring purposes, designing the new devices with the ultimate simplicity and utility for consumers, identifying the target population, and effectively marketing the solution. This is a brand new market opportunity with no old trails to follow, and the path to a viable business model is even harder to find. Very likely, device makers will need collaborations from various partners and blessings from key influencers of the healthcare industry, including consumers, to work out the right business models.

Note: The term “connected medical devices” describes medical diagnostic and measurement devices with networking support.

This article was published for the 2008 CONNECTIONS™ Conference Industry Insights, the official publication of CONNECTIONS™.