IT Facts for March, 2007

Japanese small and medium business IT spending reached $41 bln in 2006

Small and medium businesses (SMBs) that employ 1-999 employees in Japan spent $41 bln on IT-related products and services in 2006, up 7% from $38 bln in 2005. Security and storage were the key areas for IT investments among Japan SMBs, who spent $954 mln and $1.8 bln, up by 17% and 14%, respectively, AMI Partners says.

PMP market to grow to 268.6 mln units in 2011

The Portable Media Player (PMP)/MP3 player market will grow to 268.6 mln units in 2011, rising at a CAGR of 5.5% from 216.9 mln units in 2007, iSuppli predicts.

Separation systems technologies market in 2006-2011

The liquid chromatography market was $944 million in 2004 and will rise to more than $1.1 billion in the year 2006. This market has been showing exceptional growth due to its ability to separate large molecules before major analysis. This market is expected to reach $2.1 billion by 2011, an AAGR of 13.0%. Membrane filtration is $538 million in year 2006 with an AAGR of 10.8% and is predicted to grow to $898 million in year 2011. Though the capital costs involved in membrane filtration are higher than chemical treatments, the system increases energy and utilizes less company space as compared to chemical processes. This enables companies to reduce costs by upwards of 65%.

Separation systems market, 2006-2011
Market 2004 2005 2006 2011 Growth
Centrifugation 248.0 266.0 291 457 9.4
Membrane Filtration 526.0 531/0 538.0 898.0 10.8
Liquid Chromatography 944 1020.0 1145.0 2106.0 13.0
Electrophoresis 382.0 423.0 463.0 695.0 8.5
Niche Separations 174.0 229.0 530.0 858.0 10.1
Total 2274.0 2469.0 2967.0 5014.0 11.1
Source: BCC Research

Universal remote controllers to generate $1.9 bln in 2012

US revenues from aftermarket universal remote controllers (URCs) will increase from approximately $1 bln in 2006 to $1.9 bln in 2012, according to Parks Associates. While a basic universal remote controller is now in most (75%) of US homes, mid- and high-level universal remotes, now in less than 15% of US homes, are causing the current market excitement.

Israeli VCs raised 67% less money in 2006

Israeli venture capital funds raised $473 mln in 2006, a 67% decline from the $1.46 bln achieved in 2005.

Internet ad revenues reached $16.8 bln in 2006

The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) announced that Internet advertising revenues for 2006 are estimated at $16.8 bln, a 34% increase over the previous revenue record of $12.5 bln in 2005. The Q4 2006 revenues totaled just under $4.8 bln, making it the highest quarter reported. Q4 2006 revenues represent a 32% increase over Q4 2005, and a 15% increase over Q3 2006, estimated at slightly under $4.2 bln.

More bottled water sold in the US than fruit beverages, sport drinks and energy drinks combined

More than half of all beverage sales in the US were carbonated beverages. 27.8% of 2006 US beverage sales was bottled water.

US beverage market by segment
  Shipments Growth Share
Segments 2005 2006 YTY 2005 2006
CSDs 15,271.6 15,103.6 -1.1% 52.9% 50.9%
Bottled Water 7,537.1 8,253.1 9.5% 26.1% 27.8%
Fruit Beverages 4,119.0 4,020.1 -2.4% 14.3% 13.5%
Sports Drinks 1,207.5 1,348.8 11.7% 4.2% 4.5%
RTD Tea 555.9 701.5 26.2% 1.9% 2.4%
Energy Drinks 152.5 227.4 49.1% 0.5% 0.8%
RTD Coffee 38.9 43.0 10.4% 0.1% 0.1%
Total 28,882.5 29,697.6 2.8% 100.0% 100.0%
Source: Beverage Marketing Corporation

11.4% of all UK ad money was spent on Internet in 2006

In 2006 2.016 bln UK pounds was spent online by advertisers targeting the 31 mln people connected to the internet. The growth has increased the internet’s share of all advertising revenues to 11.4%, up from 7.8% in 2005, IAB reports. Advertising across all traditional media combined fell by 466.1 mln pounds YTY, a 2.9% decline. However, with the increase in online advertising spend, the entire market grew by 1.1%.

Mobile premium content generated $16.3 bln in 2006

Driven by a seemingly insatiable consumer appetite for personalization and entertainment content on wireless handsets, companies that provide the platforms that deliver premium content to mobile phones reaped a $4.2 bln share of the $16.3 bln mobile premium content market in 2006, according to iSuppli.

 Total Mobile Content Revenue Market Share by Market Participant, 2006-2011
Market Participant 2006 2007 2008 2009 2010 2011
Content Provider and Aggregator 7,714 9,715 11,832 14,422 17,064 19,329
Mobile Operator 4,421 5,294 6,135 7,109 7,971 8,537
Content Enablement Platform Provider 4,193 4,936 5,618 6,397 7,067 7,468
Total 16,328 19,945 23,585 27,928 32,102 35,334
Source: iSuppli

66% of UK non-Internet-users very unlikely to get online

60%+ of UK households have some form of internet access. Point Topic surveyed the 40% that don’t currently have dial-up or broadband? 66% of those without internet access saying they are ‘not at all likely’ to get online, however there is still a suitably juicy 16% who say they are ‘very or fairly likely’ to get access soon. Age is a major factor amongst non-users, 35% of them are over 65.

Top carbonated drinks in the US: Coca-Cola, Pepsi, Mountain Dew, Dr Pepper

The evolving US refreshment beverage market enlarged by 2.8% in 2006, according to Beverage Marketing Corporation. Americans have extended their beverage repertoire, and leading brands in the market now includes carbonated soft drinks, sports beverages, bottled water, ready-to-drink tea and coffee, fruit beverages and energy drinks. Big companies dominate the leading refreshment beverage trademarks; Pepsi-Cola (with five brands), Coca-Cola (with four) and Cadbury Schweppes’ Dr Pepper/Seven-Up (with one) account for all of the top-ten trademarks. The same companies also rank as the top three in US refreshment sales. Pepsi led the list with nearly $9.6 bln in estimated revenues in 2006. Coca-Cola followed with $7 bln. Cadbury Schweppes’ US beverage business generated $4.5 bln. Aquafina, Gatorade and Tropicana (all from Pepsi) and Dasani (from Coke) were the fastest growing leading trademarks, as they had been in the previous year as well. The Coca-Cola trademark (including all brand variations) held the top spot among liquid refreshment beverages. However, its volume, like the standard carbonated soft drink market as a whole, declined.

Top carbonated refreshment brands in the US in 2006
    Gallons Growth Market share
Brand Manufacturer 2005 2006 YTY 2005 2006
Coca-Cola Coca-Cola 4,848.2 4,727.0 -2.5% 16.8% 15.9%
Pepsi PepsiCo 3,125.0 3,028.0 -3.1% 10.8% 10.2%
Mountain Dew PepsiCo 1,309.1 1,324.8 1.2% 4.5% 4.5%
Dr Pepper Dr Pepper/7UP 1,168.2 1,193.6 2.2% 4.0% 4.0%
Gatorade PepsiCo 958.0 1,072.9 12.0% 3.3% 3.6%
Sprite Coca-Cola 993.7 958.6 -3.5% 3.4% 3.2%
Tropicana PepsiCo 706.1 778.8 10.3% 2.4% 2.6%
Minute Maid Coca-Cola 672.0 614.9 -8.5% 2.3% 2.1%
Aquafina PepsiCo 504.4 614.7 21.9% 1.7% 2.1%
Dasani Coca-Cola 448.0 538.0 20.1% 1.6% 1.8%
Source: Beverage Marketing Corporation

75.2 mln LCD TVs to be shipped in 2007

iSuppli predicts 75.2 mln LCD TV panels will be shipped in 2007, up 42.7% from 52.7 mln in 2006. This represents a 3% increase compared to iSuppli’s previous forecast issued in Q4 2006 of 72.9 mln LCD-TV panel shipments in 2007. While such growth is impressive, it still represents a significant slowdown compared to 2006, when shipments rose by a whopping 95.8% to reach 52.7 mln units.

Top industries spending on advertising in 2006

Telecommunications was the top spending category in 2006 at $9.43 bln, finishing at a gain of 10.3%. Nearly half of the sector increase was attributable to AT&T. The intense competition in this arena is reflected in the double-digit growth rates of ad budgets at nearly all the key companies including AT&T, Verizon, Comcast, Deutsche Telekom and Vonage. Foreign Auto claimed the second spot at $8.73 bln, a drop of 1.2% from 2005. Higher levels of factory and dealer ad spend behind the Toyota brand were offset by large reductions at Nissan and Volkswagen. Domestic Auto expenditures tumbled 11.7% to $7.62 bln due to General Motors and DaimlerChrysler cutbacks, pushing the category down to the number six position. Automotive advertising has now declined for six consecutive Qs. The highest growth rate among the top 10 categories was registered by Pharmaceuticals which jumped 13.8% to $5.29 bln. This was due to the strength of Merck?s marketing launch of an HPV vaccine and increased advertising activity at Pfizer and Astrazeneca. Local Services & Amusements continued to expand, up 10.3% to $8.69 bln. This segment is a diversified mix of small advertisers outside the Top 500 rankings whose collective size and multi-media budgets have made it an important contributor to the overall advertising economy.

Top industries spending on advertising in 2006
Category 2006 spending 2005 spending Growth, YTY
TELECOM $9,431.1 $8,550.5 10.3%
AUTO, NON-DOMESTIC $8,726.7 $8,832.8 -1.2%
LOCAL SERVICES $8,687.0 $7,879.2 10.3%
FINANCIAL SERVICES $8,681.8 $8,508.8 2.0%
MISC RETAIL10 $8,322.9 $8,258.0 0.8%
AUTO, DOMESTIC $7,615.2 $8,625.1 -11.7%
DIRECT RESPONSE $6,376.1 $6,087.0 4.7%
PERSONAL CARE PDTS $5,717.2 $5,654.1 1.1%
TRAVEL & TOURISM $5,406.4 $5,486.1 -1.5%
PHARMACEUTICALS $5,285.4 $4,645.8 13.8%
Source: TNS Media Intelligence

$10 bln will be spent on home audio online in 2007

Online consumers are planning to spend $10 bln on home audio products in the coming year, according to the Consumer Electronics Association.

Product placement is a $3.36 bln industry

Global paid product placement grew 37.2% to $3.36 bln in 2006 and is forecast to grow 30.3% to $4.38 bln in 2007, PQ Media says. TV placements remain the dominant choice of brand marketers, accounting for 71.4% of global spending in 2006 at $2.40 bln, with projected growth of 33.9% in 2007. Film placements comprised 26.4%, or $885.1 mln, of global spending in 2006 with forecasted growth of 20.5% in 2007, driven by more cross-promotional packages linking movie placements to ad spots, websites and point-of-purchase displays, as well as virtual embedding for local targeting. While placements in other media account for only 2% of total spending, growth will exceed 30% over the next several years due to increased demand for videogame and online placements aimed at the elusive 18- to 34-year-old demographic. The Americas will remain the largest and fastest-growing region for paid product placement in 2007, with projected spending of $3.79 bln and growth of 31.2%, followed by Asia and Europe. The United States will remain the world?s largest market for product placement in 2007 with spending of $2.90 bln, followed by Brazil, Mexico, Australia, and Japan. China will be the world?s fastest-growing product placement market in 2007 with spending growth of 34.5%, trailed by the US, Italy, India and Canada.

Hard drives up 15.5% in 2006

Global shipments of Hard Disk Drives (HDDs) rose 15.5% in 2006, as suppliers managed to capitalize on growth opportunities while shrugging off challenges including price wars, component shortages and competitive upheavals, according to iSuppli. The HDD industry in 2006 shipped 434.2 mln hard drives, up 15.5% from 375.8 mln in 2005. In Q4 2006, 119.7 mln HDDs were shipped, up 15.8% compared to the same period a year earlier and an 8.3% increase from Q3 2006. Along with strong sales to established markets in computing and consumer-electronics products, the HDD industry benefited from the rise of a new application: external hard drives. In 2006, 2.6 mln external HDDs were shipped, up 37% from 2005.

2006 hard drive sales
Supplier 2005 2006
Seagate 28.7% 33.1%
WDC 17.7% 19.6%
Hitachi GST 15.5% 16.1%
Samsung 7.2% 10.0%
Toshiba 8.7% 9.0%
Fujitsu 6.4% 6.9%
Maxtor 14.1% 3.7%
Excelstor 1.0% 1.4%
Cornice 0.4% 0.2%
GS MagicStore 0.2% 0%
Other 0% 0%
Source: iSuppli

Top advertisers in 2006

The top 10 advertisers of 2006 spent a combined $18.73 bln, a reduction of 2.8% versus the prior year period as robust gains from leading telecommunications companies failed to offset automotive category cutbacks. Across the top 50 companies, which are a more diversified group of marketers, expenditures were down 1.5%. Beyond the top 50, a segment that accounts for approximately two-thirds of the ad market, spending advanced a crisp 6.9% during 2006. Procter & Gamble (P&G) maintained its spot atop the rankings with $3.34 bln in spending, up 3.3% versus 2006. In contrast, Johnson & Johnson reduced its advertising budgets by 19.8% and fell from the fourth position to ninth position in the rankings. General Motors (GM) barely held onto the number two spot and finished the year with $2.29 bln in spending, a reduction of $710 mln or 23.7% decrease versus 2005. To put this in perspective, only 29 advertisers spent more than $710 mln in 2006. A year ago, GM was the second largest advertiser behind P&G by just $220 mln. The gap between the two advertisers is now more than $1 bln. Elsewhere in the auto industry, DaimlerChrysler reduced its advertising by 10.7%, to $1.42 bln while Ford Motor Company, despite flat budgets in the fourth Q, increased its full year outlays by 8.5% to $1.70 bln. Telecommunications companies continued their vigorous spending with AT&T up 30.8% to $2.20 bln and Verizon Communications up 10.4% to $1.94 bln.

Biggest spenders in advertising in 2006
Company 2006 spending 2005 spending Growth, YTY
PROCTER & GAMBLE $3,338.7 $3,230.9 3.3%
GENERAL MOTORS $2,294.8 $3,008.0 -23.7%
AT&T INC $2,203.8 $1,684.7 30.8%
VERIZON $1,944.2 $1,761.6 10.4%
TIME WARNER INC $1,824.6 $2,073.5 -12.0%
FORD MOTOR CO $1,699.5 $1,567.0 8.5%
WALT DISNEY CO $1,430.4 $1,418.3 0.9%
DAIMLERCHRYSLER $1,421.4 $1,591.5 -10.7%
JOHNSON & JOHNSON $1,302.8 $1,623.4 -19.8%
NEWS CORP $1,266.8 $1,298.5 -2.4%
TOTAL $18,727.0 $19,257.2 -2.8%
Source: TNS Media Intelligence

47 mln digital music households in the US in 2006

By the end of 2006, there were 47 mln digital music households in the US (households with a member who downloaded, ripped, burned, played, or uploaded digital music). Among those households, 15 mln actively downloaded at least one music file from a P2P site in 2006 ? an 8% increase over 2005, but still a slower growth rate than was noted in prior years. While P2P user growth rates slowed, the average P2P user downloaded many more files in 2006 (5 bln files) than the previous year, which represents a 47% increase in P2P downloading compared to 2005 (3.4 bln files). While in 2005 NPD noted a two to one difference between the P2P and pay-to-download populations, in 2006 there were nearly 13 mln households using a paid digital music download services ? almost three times more than NPD reported in 2004. Overall, the number of music files purchased in 2006 exceeded 500 mln, which is a 56% increase from the previous year.