In Q3, E-books and White Spaces Ruled

Table of Contents

  1. Summary
  2. Transformative Developments
    1. E-books Vs. Traditional Publishing
    2. TV-Band White Spaces
  3. Hardware
    1. iPods
    2. Apple TV
  4. iTunes Introduces Ping
  5. Slower Broadband Growth
  6. Pay-TV Subscribers Decline
  7. Business
    1. Funding
    2. Mergers
    3. Other
  8. Key Takeaways
  9. Further Reading
  10. About Philip Leigh

1. Summary

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.

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