Growth: Server sales gre by 2% in Q3 2003 YTY. Worldwide server revenue, which includes the costs of server hardware, operating systems and initial storage shipments, reached US$10.8 billion, up from $10.6 billion in the year-ago quarter.

Top vendors: IBM, HP, Sun, Dell and Fujitsu. IBM Corp. retained its lead of the server market, with a 31.1% market share on revenue of $3.4 bil. Hewlett-Packard Co. was second, with 27.7% on $3 bil in revenue, followed by Sun Microsystems Inc. and Dell Inc., with 10.8% and 9.5% of the market, on sales of $1.17 bil and $1.03 bil, respectively.

OS: Sun was the hardest hit by the decline in Unix spending. Its market share dropped by 9.3% from the same quarter in 2002. Strong growth in the Linux market, which grew by 50%, took its toll on Sun. Windows server sales also grew at a respectable pace, increasing by 10% from the previous year and slightly exceeding IDC’s expectations for the quarter. When measured by the number of units shipped, Windows remained far ahead of Linux, with 841,000 Windows servers shipped in the quarter, compared to 210,000 Linux boxes.

Overall, unit shipments grew a surprising 19.5%, reflecting solid demand for small servers priced less than $25,000. Revenues from those systems grew 9.5%, while sales of midrange systems, $25,000 to $499,999, increased by 7%. Revenue from servers priced more than $500,000 declined by 14%.

A report from United Nations Conference on Trade and Development (UNCTAD) claims the United States of America leads the world in both spam production and spam consumption.

Jupiter Research reported that the number of US households banking online will nearly double between 2003 and 2008, totaling 56 million by that time. Jupiter estimates that there will be 29.6 million online banking households in the US this year.

US consumers say they will buy home theater systems (14%), HDTVs (15%) and PCs (26%) over the holiday season compared to one year ago.

What consumers are buying for Christmas in 2003:

Mobile phones 31%
PC 26%
DVD Player 24%
Digital camera 22%
Printer 18%
Game console 15%
HDTV 15%
Camera Phone 14%
Home theater 14%

Market research firms Insight Media and McLauglin Consulting Group report that shipments of rear-projection TVs jumped 67% from 2000 to 2002. They don’t expect that torrid pace to continue, but they predict that annual shipments will reach as much as 8 mil annually in five years.

Gartner estimates that between 60 to 70% of Windows Server users run NT 4, the grandfather of Windows Server 2003. Microsoft’s own estimates are closer to 35%. But 64 case studies released last week suggest the number is much higher. The large number of customers that use NT 4 are in no rush to upgrade to newer software or are in the process of moving to Windows 2000, analysts say, and that could hurt Windows Server 2003 sales for some time.

Gartner estimates that by the end of 2004, as much as one-third of NT 4 users will move to Windows Server 2003. “Two-thirds to 75%” will still be NT 4 customers by the end of next year, said Gartner analyst Tom Bittman. “There’s a lot of NT 4 dark matter out there.”

31% say that their biggest concerns for e-mail delivery stem from blacklists and potential recipients? spam filters, while only 8% cite potential legislation. 22% are afraid of bounces and address changes, the same amount is concerned with inbox clutter and the rate of opened letters declining.

E-shopping is set to become a $100 bil business in the United States in 2003. The holiday season alone is set to log $12.2 bil worth of online sales–an increase of 42% over 2002, Forrester Research said. The market research firm attributed the increase in online sales to higher consumer spending on products such as apparel, home decor and sporting goods, coupled with an overall betterment of the economy.

31% of mobile users surveyed by InsightExpress say they will change operators when their contracts expire. When choosing a new plan, 25% of cellphone users say they consider monthly fees, 24% consider carrier brand names and 16% consider the coverage they will get. Respondents told InsightExpress their preferred service providers include AT&T (35%), Nextel (21%) and T-Mobile (13%). eMarketer ? as of August 2003 — estimates that there will be 155.4 million mobile phone subscribers in the US in 2003.

CyberSource commissioned Mindwave Research to survey 333 merchants in North America in October, reporting that retailers? losses from online fraud have declined over the years as a percent of overall online retail from 3.6% in 2000 to 1.7% this year. For 2002 the fraud level was at 2.9%, for 2001 at 3.2%.

Best practices for avoiding online fraud include Address Verification Service, manual review of orders, internal business rules, CV number, commercial scoring service and Verified by Visa program.

A study released Sunday found that 31% of Americans are “highly tech-savvy” people for whom the Internet, cell phones and handheld organizers are more indispensable than TVs and old-fashioned wired phones.

They spend, on average, a total of $169 a month on broadband Internet service, satellite or cable TV, cell phones and Web content. That is 39% higher than the national average, $122. Some 29% of them have broadband connections, compared with 17% of everyone else. About 7% of technology aficionados have canceled their landline phone and gone all-wireless. Only 2% of nontechies have done that. Despite being plugged in to the Internet and other sources of data more often, only 13% of the tech-savvy crowd feels overwhelmed by information. By contrast, a sense of information overload plagues 25% of the rest of the population.

Information Technology spending is gaining momentum, with investments in software, infrastructure, and other areas of IT growing 4.3% in Q3 2003, according to AMR Research’s quarterly IT spending figures.

IT budgets have shown continued momentum building, with growth rates increasing steadily to 4.3% in Q3 2003 up from 3.4% in Q2 2003. IT budget growth in Q3 2003 also reflects a significant leap from the same quarter in 2002, which saw growth nearly stagnant at 0.2%. Customer Service will be the central focus of 2004, with 38% of respondents claiming that customer-driven issues like loyalty and retention will have the greatest influence on IT investments over the next 12 months. Networking/telecommunications will get the most investment, with 24% of respondents giving the area top priority in the next 12 months. The results show networking and telecommunications are vital to real-time connectivity for customers, suppliers, and employees. Strategic Technology Infrastructure initiatives like security and integration are also a top priority in 2004, with investment plans soaring to 21% in Q3 2003 from 12% in Q1 2003

When 2003 is done and gone, the online advertising industry will have seen a dramatic 14% growth rate, increasing to $6.7 billion in revenues, driven by strength in search. Online advertising revenues would exceed $15 billion by 2008, which would represent a compounded annual growth rate of 18%.

Jupiter predicted 2003 would close with the industry bringing in $6.3 billion. The Jupiter forecast calls for ad spending in 2008 to come in at $15.8 billion, and Jupiter also pegged search as the biggest driver of growth in the short term. Search will grow at a 20% compounded annual rate, with its sister service, contextual advertising, rising at an 84% compounded annual rate to $1.4 billion by 2008. Brand-oriented advertising is expected to grow at the rate of 14%.

The analyst expects online advertising revenue to grow faster than the overall advertising market — partly because the Internet will be stealing market share from traditional media outlets. By 2008, Piper Jaffray expects online advertising to account for nearly 6% of total ad spending, compared to the current rate of approximately 2%.

Industry observers expect Japanese mobile phone TFT LCD prices could drop 5-10% by the Q1 2004, as supply increases significantly and alleviates the current shortage. To meet strong demand for digital still camera (DSC) and mobile phone panels, Sharp recently announced plans to build a second system LCD production line at its Mie 3 factory, with volume production scheduled to begin by March.

The total flash memory market is forecast to grow 42% in 2003 and 36% in 2004, iSuppli says.

A small company might spend a little over US$2,000 a year on SalesLogix, hardware included, Gartner said. For MS CRM, that figure is $2,400, while Onyx and Pivotal — the mid-market providers — come in slightly higher at $3,500. Even taking into account the hundred dollar or so variances, these figures still compare well stacked up against a standard implementation of Siebel, which can cost up to $12,000 per user.

Worldwide digital subscriber line access multiplexer (DSLAM) port shipments reached 12.4 mil units, a 182% increase from the same period a year ago and a 32% rise quarter over quarter. Worldwide customer premise equipment (CPE) shipments increased 135.5% year over year and 25.8% quarter over quarter to 10.2 mil units in the third quarter of 2003.

“The DSLAM market continues to be dominated by Alcatel, with its diverse customer base, and Huawei, riding the Chinese broadband wave. The second tier is more volatile, and most noteworthy this quarter was the strong performance of the Japanese vendors,” said Jouni Forsman, principal analyst for Gartner’s worldwide Telecommunications and Networking group. “In the DSL CPE market, established original equipment manufacturers (OEMs) remain challenged by new Taiwanese entrants, many of whom are shipping directly to service providers under service provider brand names.”

Alcatel was the leader in the worldwide DSLAM market in the third quarter of 2003 with 34.4% of port shipments (see Table 1), followed by Huawei with 17.7% market share. Huawei experienced the strongest shipment increase during the quarter, compared with the same period in 2002. The DSLAM market is already very concentrated, with the top two vendors making up 52.1% of the market.

Preliminary Top Worldwide xDSL CO Vendors' Port Shipments
Estimates for 3Q03
(Thousands of Units)
---------------------------------------------------------------------

                           3Q03      3Q03      3Q02      3Q02
                           Port     Market     Port     Market  Growth
Company                  Shipments  Share(%)  Shipments  Share(%)  (%)
----------------------------------------------------------------------
Alcatel                   4,283.2    34.4     1,531.1    34.7    179.7
Huawei                    2,200.0    17.7       160.0     3.6  1,275.0
NEC                       1,089.0     8.8       440.0    10.0    147.5
Sumitomo                    826.0     6.6       306.5     6.9    169.5
Siemens                     677.1     5.4       132.3     3.0    411.8
Lucent Technologies         677.1     5.4       222.6     5.0    204.2
Others                    2,690.1    21.6     1,619.5    36.7     66.1
Total                    12,442.5   100.0     4,412.0   100.0    182.0
----------------------------------------------------------------------
Source: Gartner Dataquest (November 2003)

Preliminary Top Worldwide xDSL CPE Vendors' Port Shipments
Estimates for 2Q03
(Thousands)
----------------------------------------------------------------------
                           3Q03      3Q03       3Q02     3Q02
                           Port     Market      Port    Market  Growth
Company                 Shipments  Share(%)  Shipments  Share(%)  (%)
----------------------------------------------------------------------
Siemens                   1,310.9    12.8       877.2    20.2     49.4
NEC                         938.0     9.2       243.0     5.6    286.0
Thomson                     874.3     8.6       605.7    14.0     44.3
Westell                     626.0     6.1       356.0     8.2     75.8
ZyXel                       595.5     5.8       362.7     8.4     64.1
Others                    5,857.8    57.4     1,888.0    43.6    210.3
Total                    10,202.5   100.0     4,332.6   100.0    135.5
----------------------------------------------------------------------
Source: Gartner Dataquest (November 2003)

US consumer online content spending will reach $1.4 billion in 2003, growing 10.4% over 2002. By 2005, one-fifth of US Internet users will be content buyers. The growth rate is one-quarter of that seen in 2002 (43.4%). This year marks the first time since eMarketer began tracking such revenues that online advertising spending, with 14.8% year-over-year growth, is outpacing online content spending. Nonetheless, eMarketer forecasts the percentage of online content buyers in the US will continue to rise steadily through 2005, reaching 35.8 million that year.