Two factors during the third quarter were significant enough to be characterized as transformative developments: the rapidly increasing acceptance of e-books and the FCC’s decision to make TV-band white spaces available for unlicensed use. Even the casual consumer recognizes that e-books are an emerging form factor headed for mass-market adoption. Self-publishing allows writers who are unable to secure advances from traditional publishers to put sell their work at places like Amazon.com. Furthermore, established mid-list authors are finding that self-publishing increases their income and gets their books to a larger number of readers. Such trends are likely to gain momentum as e-book reader prices drop.
In late September, meanwhile, a unanimous FCC vote approved 20 MHz of TV-band white spaces for unlicensed use. This is the largest block of spectrum released for open access in 25 years. It is anticipated that TV-band white spaces will initially focus on mobile applications. Since cellular carriers are imposing metered rates on wireless Internet access, consumers will seek bypass alternatives, and white spaces are a promising option.
Apple introduced significant hardware products during the quarter: a new line of iPods and an updated version of its Apple TV. Among connected-consumer developments, iTunes introduced its social-networking component, Ping, and broadband and pay-TV subscriptions are down in numbers.
Cord-cutting is likely to gain traction as services like Netflix increase momentum and products like Roku proliferate. However, the emergence of a new audio-video cable standard could be equally important. The HDBaseT uses ordinary CAT 5e/6 cable, which is also common for Ethernet wiring. But HDBaseT can deliver video in cable lengths exceeding 300 feet, and TVs located anywhere in the home can be connected to a computer and the Internet with HDBaseT.
A number of private companies raised venture money including Jive Software, Varidity Software, Conviva and VSS Monitoring. The biggest merger, meanwhile, was Intel’s nearly $8 billion deal with security software company McAfee. Intel also purchased the wireless chip business from Germany’s Infineon for $2.2 billion. Hewlett-Packard acquired 3Par for $1.2 billion in order to strengthen HP’s cloud strategy.