Qualcomm to Buy Atheros for $3.1 Billion

Qualcomm Inc. agreed to buy Wi-Fi chip maker Atheros Communications Inc. for $3.1 billion in cash as it aims to address growing demand for devices that use Wi-Fi to connect to the Internet.The deal—Qualcomm's largest acquisition to date—fills a hole in the company's communication-chip offerings. The importance of Wi-Fi has been growing as more devices—including smartphones, tablets and notebooks—connect to the Internet.

The deal, which values Atheros at $45 a share, comes during a flurry of acquisitions in the technology sector and puts pressure on Qualcomm's rivals, such as Broadcom Corp. Chip companies, including Intel Corp., have been using their high levels of cash to make purchases to add more features to their chips. Qualcomm has about $10 billion in short-term cash and marketable securities. Adding long-term marketable securities raises the figure to $18.4 billion, with $12.1 billion of that located offshore, the company said.

A takeover of Atheros gives Qualcomm greater exposure to Wi-Fi chips and other markets where it doesn't have a significant presence, including providing components for laptop personal computers, which now come standard with Wi-Fi chips.

The deal is expected to close in the first half of 2011 and modestly add to Qualcomm earnings in fiscal 2012. Atheros will be renamed Qualcomm Networking & Connectivity, and Atheros President and CEO Craig Barratt will join the company as president of the group. Mr. Jacobs said Qualcomm also plans to retain the rest of the Atheros senior management team.

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Smartphone replacing Remote Controls?

The standard TV remote control, lost so many times beneath sofa cushions, may soon be lost to history. Many people are now switching to their smart phones as substitutes to their remote controls.

TV viewing habits are changing as more Internet and on-demand content — YouTube videos, streaming movies, shopping sites, Facebook photos — flows directly onto big screens. Navigating all of that demands more action from the viewer, including a fair amount of typing, which current remotes cannot handle.

There have already been successful attempts to use smartphones as remotes. Sonos, which makes Internet-connected stereos, offers a free iPhone application that replicates every feature of its own $349 touch-screen remote control. Over half of Sonos customers now use the app, which links to the stereo over a Wi-Fi network.

Several television manufacturers, like Mitsubishi and Samsung, are following suit with smartphone remotes, and phone apps are part of both Apple and Google’s TV offerings.

Technology giants like Apple and Google, along with a wave of Silicon Valley start-ups, have a vision for the future that would make channel-surfing seem quaint. Soon, they believe, viewers will choose from vast pools of video without distinguishing between TV broadcasts and content streamed over the Internet.

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Parks Associates supporting Mobile Internet 2009, Austria

Parks Associates is supporting Mobile Internet 2009 from March 23-25, 2009 in NH Danube City, Vienna, Austria.

With the proliferation of flat-rate data tariffs and an explosion of mobile internet centric devices - users can now take advantage of high end devices and clear pricing alongside mobile broadband network speeds and coverage to browse the mobile internet in search of new and innovative content.

Attendees will learn the latest strategies and business models for driving flat-rate data plans which provide a large boost in APRU; how to optimise usability and therefore drive revenues from mobile search, advertising and content; and how Android will impact the mobile internet market and learn how to exploit it to boost revenues.

Key focus sessions will include mobile platforms, open source, fragmentation and standardization.

For more information about this event, click here.

PC-Based 3D Virtual Worlds to Reach 33 Million Users in 2013

New report from Parks Associates defines value chain for 3D Virtual Worlds--

An increasing number of industry players in the value chain will help push 3D virtual worlds into a sustainable industry, reaching 33 million registered users by 2013, according to Virtual Worlds: the Internet of Avatars. This new report from Parks Associates details the evolution of the virtual world value chain, which has added a variety of different companies and providers in its relatively short period of existence.

These entities provide content, activities, and applications that enhance the usability and user experience of virtual worlds. In addition, several new solution providers have emerged to provide enterprise-class virtual world services.

Virtual Worlds: the Internet of Avatars defines the 3D virtual world value chain, profiles leading companies, examines industry and consumer trends and dynamics, forecasts market growth, and offers recommendations to large media companies, technology companies, consumer brands, marketers, and Internet companies.

Click here to view and download a graphical representation of Parks Associates' model of the virtual worlds value chain.

Consumers to spend billions on Internet Video Services by 2013

TV-based Internet video receivers and connected consumer electronics platforms will drive transactional revenues for premium Internet video services past $6 billion --

U.S. consumers will spend over $6 billion for Internet video services by 2013, with direct-to-TV videos accounting for 75% of that revenue, according to Parks Associates’ Internet Video: Direct-to-Consumer Services (Second Edition). This new report finds that greater ownership of connected game consoles, networked TVs, and alternative video-on-demand set-top receivers is generating significant growth in user-paid revenues.

Future areas to watch include ad-supported movie streams, new targeted advertising approaches, and Hollywood’s efforts to offer more electronically distributed content through download-to-burn kiosks and other manufacturing-on-demand outlets.

Internet Video: Direct-to-Consumer Services (Second Edition) examines the business of premium Internet video delivery and includes the latest primary consumer research on Internet video consumption and interest in new Internet video services and products.

Parks Associates will present on Internet video and other digital-lifestyle topics at CONNECTIONS™ Europe Summit, August 29, in Berlin.

Shopping & the Internet

A recent report issued as part of the Pew Internet & American Life Project found the Internet was, "just one among a variety of sources people use and usually not the key factor in final purchasing decisions." This conclusion is generally consistent with research conducted by Parks Associates (including our study The Changing Consumer Electronics Purchase Process, conducted in late 2007), but I wanted to point out a few interesting details our own studies have uncovered.

The importance of the Internet as a source of information varies by product category. For those purchasing a gaming device, for example, online sources are relatively unimportant, presumably because the differences between devices are substantial. (Few gamers would confuse a Wii and an XBox.) Similarly, online sources are relatively unimportant for commoditized products (like cordless phones, DVD players) or products that nearly demand a first hand inspection (flat panel TVs).



At the same time, online sources are an important source when buying other kinds of products. Over 40% of recent digital video camera buyers, for example, said online sources were the number one source of information; over 35% recent DVD recorder buyers said so.

The importance of online information sources also varies by the kind of consumer doing the buying. Those spending more than $2,000 per year of CE products, for example, are more likely to use online shopping comparison sites. (See the recent Parks Associates white paper Super Buyers for more on this.)

Retail stores remain the dominant information source for shoppers but the Internet does play a notable role all the same.

One in Five U.S. Households Has Never Used E-mail

New Survey Finds Substantial Number of Households Not Crossed the Digital Divide

Roughly one-fifth of all U.S. heads-of-household have never used e-mail, according to National Technology Scan, a forthcoming study by Parks Associates. This annual phone survey of U.S. households found 20 million households are without Internet access, approximately 18% of all U.S. households.

Age and education are factors in this divide. One-half of those who have never used e-mail are over 65, and 56 percent had no schooling beyond high school.

National Technology Scan found just seven percent of the 20 million “disconnected” homes plan to subscribe to an Internet service within the next 12 months. Still, the study reports a steady decline in the number of disconnected households when comparing findings with previous years. National Technology Scan reported at year-end 2006 that 29 percent of all U.S. households (31 million homes) did not have Internet access, citing low perceived value of the Internet.

National Technology Scan provides an accurate picture of current adoption levels, demand, and the total available market for technology products and services in the U.S. The study provides comparative analysis with past adoption levels and overall trending patterns for strategic planning and forecasts of sales and revenues for product lines and services.