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Friday, 21 January 2005 19:00

News Roundup 21 January 2005


Mobile phone market to soar in '05

The global mobile phone market is set to grow to 2 billion subscribers by the end of 2005, fueled by strong demand from developing economies in Asia and Latin America, according to a report just issued by Deloitte & Touche.

The New York Times/Reuters report that the consulting firm said it expected voice calls to continue to be the primary driver of profits and revenues for mobile phone companies, with volumes continuing to grow steadily on the back of falling prices and rising ease of use.

Mobile penetration would surpass 100 percent in some markets as users take a second connection for data or for personal use. The mobile industry had 1.5 billion users in June last year.

The paper reported that Deloitte & Toucher have predicted that traditional fixed-line operators will continue to face margin pressures because of competition from mobile and voice over internet protocol (VoIP) providers, but the vast majority of voice calls would still originate and end on their networks.

The reports also said that radio tagging could become the sunrise industry this year as sectors ranging from retailing to automobiles drive up adoption of the technology to curtail theft, cut waste and improve productivity.

D&T said that in 2005, Radio Frequency Identification (RFID) will finally make it out of the lab and into the commercial world ... By the end of the year, more than 10 billion RFID tags will have been sold and used.

Retail giants such as Wal-Mart and Britain's Tesco are in the midst of a drive to replace bar codes with RFID chips embedded in plastic product tags that can track goods and signal the need for restocking, boosting supply efficiency and cutting costs, the research freport says, and analysts estimate this technology and subsequent cuts in manpower, with inventory control done automatically, could save Wal-Mart, which posts annual sales of about $US256 billion, more than $1.3 billion a year.

The NYT says Deloitte has said it expected collecting, collating and presenting RFID data will become a very sizeable industry, with technology companies grabbing the lion's share of revenue.

Warning: WiFi boom opens door for hackers

Wireless networks giving computer users internet access from anywhere in the home could expose them to eavesdropping and programmers should make their security software easier to use, according to researchers.

The New York Times/Reuters report (19 Jan.) says that New Scientist magazine has reported that Wi-Fi networks leave home computer users open to unprecedented levels of security breaches. The paper says that most wireless networks come with security features to prevent snoopers reading emails and other documents, but many people do not use them because they are difficult to implement, and other users do not change default passwords set by manufacturers which many hackers may know.

The New Scientist report also said that company wireless networks may also not be safe from hackers,citing a 2002 poll that showed about 70 percent of company networks were not encrypted, while security experts believe the solution would be to make the software safeguarding networks easier for consumers.

Predictions of a DVD format war

So neat, in fact, that it would seem to upstage the efforts of the biggest consumer electronics companies and Hollywood studios, which are choosing sides in a battle between two high-definition DVD formats, Blu-ray and HD DVD. Those formats, expected to reach North America late this year, will require ultra-high-capacity DVD's and a new class of expensive players.

The New York Times reports (20 Jan.) that the advent of Blu-ray and HD DVD may give rise to a DVD format war reminiscent of the Betamax-VHS contest in the early days of videocassette recorders, and the paper says that at stake are potentially billions of dollars in hardware and discs as the demand for high-definition content grows.

The paper says that in the midst of the battle, for which the two sides mounted elaborate floor displays this month at the Consumer Electronics Show in Las Vegas, one man, Jordan Greenhall, sat before a flat-panel television that glowed with remarkably crisp, bright images, offering it as evidence that he could put a full-length movie in high-definition quality on a standard DVD, with room to spare, using his own company's DivX 6 software.

The NYT says the 33-year-old co-founder and chief executive of DivXNetworks announced that the first DivX-capable DVD player is the $US250 Avel LinkPlayer 2 by I-O Data, and the company hopes to see DivX high-definition players for as little as $100 by late fallin the US (Toshiba, in contrast, recently announced an HD DVD player to be brought market late this year for about $1,000.)

The report adds that all the talk of high-definition DVD's, no matter which approach ultimately prevails, may seem premature in a marketplace saturated with standard-definition DVD's. According to industry analysts, most consumers indicate that they are satisfied with the picture and audio quality of standard DVD's, and they are growing accustomed to finding the players an inexpensive commodity, priced as low as $40.

Analysts say that next-generation DVD's must offer much more storage than today's five to nine gigabytes. HD DVD, backed primarily by Toshiba, NEC and a number of studios - including Paramount Home Entertainment, Universal Pictures, Warner Brothers and New Line Cinema - is capable of storing 15 gigabytes of data on a single-layer disc. A Blu-ray DVD can store up to 25 gigabytes on a single layer and 50 gigabytes on a dual-layer disc. Both formats use blue lasers rather than the regular red one.

However, the NYT reports that backers of HD DVD say making discs in their format will be much less difficult and expensive than Blu-ray DVD's, which are supported by Sony, Samsung, Hewlett-Packard, Panasonic, LG Electronics, Sharp, Mitsubishi, Dell, Walt Disney Pictures and Television, 20th Century Fox and others.

For Mr. Greenhall of DivXNetworks, reports the NYT, much of the debate between Blu-ray and HD DVD misses the immediate point- he says the essence is that DivX makes you realise that high definition and blue laser are not linked at the hip. Blue laser means lots of storage; high definition means good quality. With DivX you don't need lots of storage to get quality.

Picture tube TV's try a slimmer strategy

Standard picture-tube TV's are trying to make a comeback as current technology items by offering slimmer designs, reports the New York Times (20 Jan).

The old technology TVs have long been video non grata at the Consumer Electronics Show. Seen as yesterday's technology, they have been relegated to the back room of the show, the industry's biggest gadget festival, where flat-panel liquid-crystal-display and plasma sets take center stage.

But, reports the NYT, at this year's show in Las Vegas, picture tubes made a small comeback in thinner televisions designed to appeal to Americans' penchant for all things slim.

The NYT says that over the next year, new high-definition picture-tube televisions from LG Electronics, RCA and Samsung that are about two-thirds as deep as today's picture-tube sets will go on the market. Those companies expect the new sets to be successful for one reason: price. While many industry observers predict the imminent demise of picture-tube televisions (also known as cathode-ray-tube TV's) in favor of LCD. and plasma models, the higher cost of flat TV's means that there may be years of life left for the venerable tube set.

The report observes that while a 30-inch LCD TV can cost US$3000, a slim-tube model the same size will be $1000. Those who lust after a flat-panel TV may also like the new tube versions because they will mimic the look of plasma and LCD sets, with aluminum or black bezels surrounding the screen.

Many people in the television industry acknowledge that the standard-definition image quality produced by a picture tube remains superior to the newer flat panels, reports the NYT, and says that unlike LCD TVs, tube sets do not suffer from image lag, the smearing of rapidly moving images on the screen. Nor are they prone to image burn-in, as has plagued some plasma screens.

EBay's earnings miss expectations

Online marketplace eBay has just announced its quarterly profit rose 44 percent, helped by growth in its PayPal service, but The New York Times/Reuters report (19 Jan.) that results missed Wall Street expectations.

California-based eBay said fourth-quarter net income increased to $US205.4 million, or 30 cents per diluted share, from $142.5 million, or 21 cents, a year earlier, and net revenue rose to $935.8 million from $648.4 million.

Analysts, on average, had expected eBay to post a profit, excluding items, of 34 cents a share on revenue of $934.4 million, according to Reuters Estimates, the NYT reports. For the current first quarter, eBay forecast revenue of $1.01 billion to $1.03 billion and earnings excluding items of 34 cents to 35 cents a share, below analysts' consensus forecast of 40 cents a share, according to Reuters Estimates.

The paper says EBay has forecast 2005 revenue of $4.25 billion to $4.35 billion and earnings excluding items of $1.48 to $1.52 per share.

Morgan Freeman, Intel showcase digital home

Computer chipmaker Intel this week opened a Hollywood digital house to show film industry players new ways of watching movies and television at home, tapping actor Morgan Freeman to help show off its technology.

Thew New York Times/Reuters report that the house, built at Revelations Entertainment's office in Santa Monica, California, is wired with a personal computer that can download movies, TV shows and songs from the internet and send them to TV sets or other media players in different rooms.

Freeman told Reuters he was a "technological idiot", but that he was smart enough to know that digital delivery was a wave of the future and he must learn how the technology worked.

Intel said one of the company's goals was to help make Hollywood producers comfortable with the content protection devices and software used in the PC and media players set up inside the home.

Makers of films and television shows, led by the Motion Picture Association of America, have been waging a war against copyright piracy which they claim costs the industry as much as $US3.5 billion a year in terms of copying things like videos and DVDs and selling those illegal copies on the street. They are worried about the use of the internet to transfer digital files of films and shows, which they claim has already cost them unknown billions of dollars in lost revenue.


Global digital music market has 2004 boom

The market for digital music on the internet and mobile phones boomed in 2004, according to a report just released by the International Federation of the Phonographic Industry that showed the global recording industry collecting significant revenues from the segment for the first time.

But, the New York Times/AP report says that the IFPI also warned that rampant piracy continued to erode legitimate profits.

The IFPI, which represents more than 1,450 record companies around the world, said music fans in the United States and Europe legally downloaded more than 200 million tracks in 2004, up from about 20 million in 2003. That contributed to estimated digital music revenues of around US$330 million (euro253 million) in 2004, up sixfold from the previous year.

The IFPI said there are now more than 230 online sites where consumers can buy music legally, up from 50 a year ago, an music on mobile phones is also becoming increasingly popular, with Asia leading the way -- the Japanese ringtone market was worth $US100 million in 2004.

The IFPI claims, reports the NYT, that digital piracy, which is also affecting the movie industry, is behind a global slump in music sales that began in 2000. It said worldwide sales of recorded music fell 7.6 percent in 2003 following a similar drop the previous year.

The IFPI's lawsuits have so far largely targeted individual song swappers for breach of copyright rather than the providers, which can claim that they have no knowledge of any piracy occurring on their networks.

Legal downloads jumped 900% in 2004

The online news and information site, The Register in the UK, reports (19 Jan) that the IFPI has said that more than 200 million songs were downloaded from legal online music stores around the world last year - a 900 per cent increase over 2003's total.

And, The Register says that by its estimation, based on Apple's publicly provided figures, Apple accounted for 90-95 per cent of the market.

The online publications says that the IFPI concluded that digital music was proliferating, but plenty more needed to be done to raise awareness of legal download services and to stamp on unauthorised ones.

According to the IFPI, The Register reports, 2004 was a watershed in online sales and the recording companies saw their first significant revenues from the digital market, "running into several hundred million dollars". IFPI cited market watcher Jupiter's estimation of the value of the digital music market in 2004: $330m.

And, market-watchers forecast that 2005's total will be more than double 2004's, as more punters choose to buy downloads rather than CDs or pinch stuff from the likes of Kazaa and Grokster.

The Register says that making punters care will be even harder, and it says that the IFPI reckons 70 per cent of music downloaders are aware that it's illegal to download from unauthorised sites, but there's little sign that downloading this way has lessened. The Register further adds that there may be fewer songs being shared, in part thanks to the Recording Industry Association of America's high-profile legal campaign, as well as more restrained moves made by the RIAA's European counterparts; but anecdotal evidence suggests 'illegal' downloading is taking place more than ever.

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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.





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