Parks Associates Blog

Tuesday, July 29, 2008

Network-Attached Storage Should Feature File Allocation, Searching, and Media Sharing in addition to Increased Capacity

Sales of NAS devices to reach 13 million by 2012

The rapid growth in digital content libraries will push worldwide sales of network-attached storage devices to nearly 13 million units by 2012, according to Parks Associates’ Home Servers and Consumer Storage: Analysis and Forecasts.

In targeting this broader market, companies should develop storage solutions that emphasize easier file allocation, searching, and media sharing, Shields said. Manufacturers and retailers must carefully select the features to market. Messages that emphasize content sharing have as much resonance with this new audience as do those that stress backup. Intuitive user interfaces and installation processes, allowing easy backup, file sharing, and new device connectivity, will help consumers discover these and other features and grow accustomed to networked storage. In this way, NAS devices will expand their role in the home into media servers.

Home Servers and Consumer Storage: Analysis and Forecasts defines several categories of consumer storage solutions – from online/network-hosted services to network-attached storage and home servers. It provides primary consumer research about recent and planned storage uses and purchases and includes worldwide forecasts for network-attached storage devices.

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Thursday, July 24, 2008

CONNECTIONS™ Summit at CES provides insight into new market strategies, consumer trends, and industry perspectives

Parks Associates and CEA® announced they will again host CONNECTIONS™ Summit at CES, January 8-9, 2009, in Las Vegas, and are currently accepting speaker submissions for the event.

CONNECTIONS™ Summit features nine sessions on key digital-living topics during the first two days of 2009 International CES.CONNECTIONS™ Summit Sessions at CES feature nine sessions held the first two days at CES. Moderated by Parks Associates analysts, these sessions provide an interactive environment for networking and discussion.

Attending the sessions at the CONNECTIONS™ Summit offers the perfect start to CES – attendees receive consumer and industry data, insight from leading executives, and the opportunity to speak with Parks Associates’ analysts.

The sessions, moderated by Parks Associates analysts and featuring executive panelists, will examine growth in new markets like digital photo frames, new business models for service providers, and the ongoing changes in how consumers access content. Parks Associates' research indicates that remote, in-store, and at-home consumer IT support services will generate $1 billion in revenues annually in the next few years, a substantial market opportunity for many new and existing players.

CONNECTIONS™ Summit features commentary, insight, and debate on successful market strategies and deployment for the following areas:

• Customer Support for the Consumer at Home
• Connected CE
• GPS Market
• Digital Photo Frames
• Digital TV and Set-top Boxes
• Connected Gaming
• Home Management

CONNECTIONS™ Summit also features support from CONNECTIONS™ Europe Summit Sponsors, including Cisco Systems, Enure Networks, F-Secure Corporation, the Multimedia over Coax Alliance (MoCA),, Toshiba, WirelessHD, and Zilog, Inc.

Deadline to submit to speak at CONNECTIONS™ Summit is September 5.

Full press release available:

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Don't Count the Mass Retailers out on IT Support Services

Wow - what an active week for support-related articles. Just when you count on Best Buy being able to fend off the Wal-Marts of the world by deploying a battalion of Geeks to customer homes, Wal-Mart is apparently not going to sit idle. TWICE Magazine reports that the retailer will open "Solution Stations" in 15 Dallas-area stores. The support services - which will be managed by Dell - will include HDTV and home theater installation, computer repair, wireless solutions and other support services to help customers “build out their digital lifestyle infrastructure at home.”

That sounds pretty compelling, but I hope that the Solution Station employees at Wal-Mart are easier to find than what yesterday's USA TODAY reported on a recent visit to a Virginia store:

"Three of the TVs are dark in Wal-Mart's electronics department, where the only two clerks in sight stock a shelf and disappear. "

Wednesday, July 23, 2008

And, Support from the Retailer Perspective

Okay, we have an official home networking customer support trifecta for July 23, 2008: a home networking support story (Cisco buys Pure Networks), a service provider support story (Comcast struggles with support), and now the retail angle (Best Buy vs. Circuit City) in today's USA TODAY.

Costco, Sam's Club, and Wal-Mart, etc. are becoming a more important channel for electronics sales, Our own research from The Changing Consumer Electronics Purchase Process indicates that - among flat-panel TV purchases made at retail stores - that these mass-merchants accounted for nearly one-third of sales in 2007. As consumers seek out lower prices, the warehouse clubs and mass-merchants could really threaten the established CE sales businesses of Best Buy and Circuit City.

Today's article emphasizes Best Buy's strategy of promoting superior customer support in effectively competing not only against Circuit City (whose Firedog business is presumably struggling in the light of recent layoffs), but also these mass retailers.

I'd be really interested in seeing a consumer purchase study that breaks out the use of installation, configuration, and training services with a CE purchase. \

Maybe Cisco will Sell Comcast Some Customer Support Solutions

After posting the news about Cisco's acquisition of Pure Networks, The Washington Post's daily update dropped into my e-mail inbox, with the following headline:

Call the Cable Guy. Again.
As Comcast Grows, Service Problems Dog Customers

The article focuses on complaints that Comcast's investments in improving customer service have not come as rapidly as the growth it's enjoyed in deploying broadband, television, and bundled services to its customers.

This was an interesting paragraph from the article:

"Many cable, telephone and Internet service companies have struggled to keep pace with customer service as they have gone through a recent period of rapid growth. Washington area residents last year complained to the Better Business Bureau about their cable, Internet and phone more than about other services, including home contractors, auto repair shops and car dealers."

The article referenced the same customer satisfaction survey that we cited in a May blog, showing the major cable operators struggling compared to DirecTV and DISH Network in making their customers happy.

As much as these service providers are investing in next-generation networking and customer premise equipment, I hope they're putting as much effort into ramping up their support capabilities, or it's going to get ugly. Maybe not a-million-people-trying-to-activate-their-iPhone-through-AT&T-ugly, but not pleasant.

Cisco Aquires Pure Networks

First, Cisco acquired Ashley-Laurent to strengthen its residential gateway management software capabilities. Then, they acquired WebEx, and are using some of its features for remote customer support applications. Today, the company announced that it was acquiring Seattle-based Pure Networks, a company that has developed home networking management and software tools. It looks like Cisco is playing its cards to develop a complete end-to-end digital home support portfolio. I wonder who's next - maybe a remote management systems provider or another company in the OSS/BSS arena?

Pure Networks and Cisco were no strangers to each other. Pure Networks' software was already a key element in the Linksys Easy Link Advisor (LELA) solution aimed at simplifying the setup and management of wireless networks

It's interesting to see the valuations placed on the home IT support/remote management acquisitions that have been made recently. Cisco acquired Pure for $120 million. In Q3 2006, Microsoft purchased Gteko for $60 million. In Last month, Alcatel-Lucent aquired Motive, a provider or remote management systems for telecom operators, and that deal was for $68 million. to put this in perspective, compare these deals to one that got more column inches devoted to it - the Blockbuster acquisition of the online movie rental and download service provider Movielink in August 2007. That deal was for $6.6 million.

This digital home customer support market may largely fly under the radar, but there is some significant activity brewing. I've been having some interesting discussions with a number of the companies providing both software and support services in recent weeks - among them Best Buy's Geek Squad, Circuit City's Firedog, Large Software (they make software called PC Tune-Up), Avanquest (they make the System Suite software for enhancing PC security and performance), iYogi (remote support services), and Clean Machine. And, our recent CONNECTIONS 2008 event in Santa Clara featured sponsors and speakers from Affinegy, BSecure, Enure Networks, HiWired, Peak8 Solutions, PlumChoice, Radialpoint, SingleClick Solutions,, and TeliaSonera.

When you look at home IT support services, including home networking management software, remote support, and PC installation and configuration, we're anticipating about a $1.2 billion market for the U.S. by 2012. This does not include the kind of installation work that Best Buy, Circuit City, and others are doing for consumer electronics products, so that's obviously another significant revenue stream. As we start adding in additional support elements and value-added features, you're looking at a very significant market opportunity.

Tuesday, July 22, 2008

U.S. MMORPG Companies Need To Offer More Free Games – Not Subscription Models – To Grow Market

Parks Associates Study Outlines Strengths and Weaknesses in MMORPG Market...

Massive multiplayer online role-playing game (MMORPG) publishers may have to start giving away playing time to attract more players into online role-playing worlds, according to Parks AssociatesElectronic Gaming in the Digital Home II.

This consumer study of 2,000+ U.S. Internet gamers found only power gamers are interested in subscribing to an MMORPG service, whereas social, dormant, and leisure gamers all show significant interest in a free-to-play, microtransaction-based model. The MMORPG market will be difficult to enter with a subscription model at this stage.

Fourteen percent of gamers not currently playing MMORPGs would be interested in playing if they could play for free. Only 2% of gamers from the same group were interested in adopting an MMORPG with the traditional subscription-based model. The good news for MMORPG companies is they can recoup their investment over time through microtransactions, where game publishers and operators make money through sales of in-game items.

The barriers to entry, in terms of time and money, are simply too high for many potential customers, according to Cai. “Free-to-play models offer flexibility, and players can choose how much they want to invest based on interest level and play patterns. Microtransaction models have the best potential to grow the U.S. MMORPG audience.”

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Wednesday, July 16, 2008

Intel’s Health Guide Won FDA Approval

Intel Health has moved from scientific research to product development in its quest for new personal care models empowered by the digital technology. Its Health Guide PHS6000 home health gateway passed the muster of FDA’s 510(k) review recently, and according to the company, will be ready for market launch in late 2008 or early 2009. I first saw it at this year’s American Telemedicine Association Annual Show. The device appears to have all the major features to enable the remote home health monitoring model and looks sleek with its white finish and curvy edge. But absent of any user test results, I withhold my judgment for now. Frankly, I think a personal health system like Intel’s Health Guide might be the most challenging gadget design ever (even more than the iPhone!). Designers need to take into consideration not only a myriad of technology and medical standards but also the needs of some very tough-to-please user groups. In this case, the users on the consumer side are quite likely the least tech-savvy ones. And it doesn’t stop there. For Health Guide to work, it has to be endorsed by the medical community, which means doctors and nurses who might hold complete different views on how this gadget can fit into their workflow and how specific functions should work. For Intel, a traditional silicon provider who sometimes ventures into product reference designs but seldom directly get involved in product development and marketing, Health Guide represents a giant leap forward. I am glad to learn that Intel’s next step is to test-market the product with its healthcare provider partners. I would expect that feedbacks from patients and clinicians will result in further tweaks to the product design. As to the business model, I am still a bit confused about Intel’s initial target market for Health Guide. The company suggested that the gadget can serve both the chronic care market and the wellness care segment. I hold that the two segments might have complete different expectations regarding the form factor and specific functions. Another important piece of detail left out from Intel’s press release is the targeted price range for this device. Existing products with similar specs are priced between $400 and $800. What is Intel’s pricing strategy? And will Intel price it differently for the two market segments? I am sure that more will be announced as Intel move forward with evidence and confidence.

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Tuesday, July 15, 2008

Sony's PlayStation Network Video Downloads Service is Official

The Los Angeles Times reports that the rumor is true: Sony will be offering movie downloads through the PlayStation3.

The company said it would start selling and renting movies and TV shows through its PlayStation Network tonight. MGM, 20th Century Fox, Lionsgate, Warner Bros., Disney, Paramount, Turner Entertainment and of course Sony Pictures are making titles available.
PlayStation 3 owners will be able to buy TV shows for $1.99 and up.

They can also rent movies for $2.99 to $5.99 and buy them for $9.99 to $14.99. For example, “Cloverfield” can be purchased for $14.99 or rented for $3.99. A high-definition version rents for $5.99.

Videos purchased through the PS3 can be transferred to Sony’s PSP hand-held game console.

All this was announced at the same time that Microsoft announced that content downloads from its Xbox LIVE service - including movie and TV show downloads - have tallied more than $1 billion in revenues.

Mid-level Aftermarket Entertainment Remotes Continue to Gain Market Share

U.S. households are increasingly looking to the remote control as their link to easing the complexity of control and search among the growing number of disparate systems in their homes, according to Aftermarket Entertainment: Universal Remote Controllers (Second Edition).

This new report from Parks Associates confirms and expands upon the trends identified in the 2006 first edition. These include the increasing desire and willingness of U.S. households to replace current remote controls with one that is more capable and can enhance their experiences with new entertainment systems.

The report provides purchase process details for aftermarket remotes, brand shares among U.S. Internet households, unit numbers and revenues for high-end remotes sold by dealers installing entertainment systems, and forecasts by product segment from 2007-2012. In addition, the report offers a segmentation of URC owners and recent buyers along with their ratings about key features important to their ultimate buying decisions.

The report also details continuing inhibitors and explores a few key strategies to increase consumer awareness and the willingness of TV manufacturers to offer different levels of remotes at the point of purchase.

Full Release available:

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Monday, July 14, 2008

Netflix at the Xbox

What we had written about in a March blog has apparently come to fruition. The streaming content from Netflix's Instant Queue online video service will be available to Xbox 360 users this fall, Netflix and Microsoft reported at the E3 show in Los Angeles. The service, expected to launch as a software upgrade for the Xbox 360, will be offered at no additional cost to Netflix subscribers who also hold Xbox 360 Live Gold memberships.

Thursday, July 10, 2008

Get Ready for the Wireless HDMI Hype

Belkin is really leading the charge for cable replacement solutions. They were (I believe) the first company to put out a wireless USB hub for your desktop, intending to eliminate the cumbersome cabling between your PC and peripherals. This product uses the WiMedia ultra-wideband wireless solution.

Belkin has unveiled its FlyWire wireless HDMI accessory. The company says that it will enable multi-room streaming of content from AV receivers, set-top boxes, game consoles, Blu-ray DVD player, and others. These products will connect to the hub and their content can then be accessed by high-definition televisions that are connected with a receiver.

The race for robust wireless solutions for multimedia streaming is in full gear. While Belkin is using a 5 GHz solution from AMIMON (which they call WHDI), there are plenty of other choices, such as the WirelessHD 60 GHz (using SiBEAM's spec), WiMedia UWB, a company called Radiospire indicates that their solution can use either UWB or 60 GHz), Pulse~LINK can use UWB wirelessly or over coax, and then of course there's venerabe 802.11, which is just now emerging as a potential multimedia solution.

It's going to be a busy summer.

Tuesday, July 08, 2008

Consumers listening to music more and more on TVs

Parks Associates says advanced TV applications make the television...

In a new survey by Parks Associates, roughly two-thirds of U.S. and Canadian broadband households reported regular use of a PC to play music while at home, and one-third said they use a television to listen to music. MP3 players ranked equal to TVs, with one-third of households using these platforms for music, in the new report titled Digital Media Habits II.

“iPods are sexy, but not everybody has one,” said John Barrett, Director of Research at Parks Associates. “TVs are ubiquitous and increasingly capable of delivering a range of content, especially with new features like digital music delivery and place-shifting services. This is just the tip of the iceberg for TV applications.”

In the report, Parks Associates analysts recommend that developers and service providers account for these standard platforms when designing new digital entertainment services.

Parks Associates will discuss next-generation video services at the CONNECTIONS™ Europe Summit, taking place August 29, 2008, in Berlin, Germany. The Summit will feature panel discussions on “The Evolution of Video Devices” and “Visual Networking and TV 2.0,” among other topics. Sponsors include Cisco Systems, Enure Networks, F-Secure Corporation, MoCA™,, WirelessHD and Zilog. Visit for more information.

Digital Media Habits II is a study of media trends in the U.S. and Canada.

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Wednesday, July 02, 2008

Will Xbox 360 Price Reduction Spur Sales in the Near Term?

Several publications have published stories speculating a $50 price cut for Xbox 360 in the U.S.(price cut already happened in New Zealand and Austrlia). Will such price cuts lead to a near-term sales boost? Our consumer data suggest there will be some impact.

Microsoft definitely needs to stimulate consumer interest in its console. GTA IV didn't help much and there isn't a killer game, no pun intended, on the horizon. Our consumer data from Electronic Gaming in the Digital Home II, a new study of 2,000 U.S. Internet gamers also show that consumers interested in buying a console are more interested in the Wii and PS3 than an Xbox 360. Among console intenders, 38% ranked Wii as their No. 1 choice, followed by PS3 at 31% and Xbox 360 only got 19% of the votes.

Price reduction may change the equation and help increase consumer interest to a certain degree. A gap analysis between consumer perceived value (or average price willing to pay) for the different consoles and their current market prices reveals interesting findings. Wii's market price matches very well with consumers' psychological threshold. The average price consumers are willing to pay for an Xbox 360, although similar to the price point of an Xbox 360 Arcade, is still lower than the new price point of the 20GB model. However, shaving off $50 definitely narrows the gap significantly.

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