Wednesday, April 25, 2007

TI Names President of Asia Operations

Larry Tan has been named President of Texas Instruments' operations in Asia. He assumes the top management position in Asia in addition to his current responsibilities for sales and marketing in the region. In this role, Tan will oversee three manufacturing facilities, one R&D center, two wireless support centers, six field applications engineering centers, and 19 sales and marketing offices

NYT: Vudu Casts Its Spell on Hollywood

The New York Times profiled Vudu, a Silicon Valley start-up preparing to launch a VOD set-box player this summer with the support of major Hollywood studios. According to the article, Vudu will leverage peer-to-peer technology to speed downloads. Anticipating the owner's likely content choices, Vudu will also pre-cache the openings to many movies in order to enable instant play. Vudu's content library is said to exceed 5,000 titles. The company is still in stealth-mode and has yet to announce its product.

Concurrent Launches MediaHawk Back Office Software for VOD

Concurrent introduced its next-generation Business Management System -- the "MediaHawk" On-Demand Back Office Software Suite (MHBOSS) for VOD.

MHBOSS is built on Oracle's 10g database and Real Application Clusters (RAC) and is designed for on-demand applications such as time-shifted TV and nDVR. As more subscribers are added and on-demand utilization rises, the capacity of MHBOSS can be increased by adding additional computing and storage modules. The system supports automatic data replication and load balancing capabilities. Content libraries can be expanded and user generated content can be added without limit. The open architecture allows interoperability with multiple VOD server vendors and numerous software applications through industry standard interfaces like XML and SOAP, and provides web services for reporting, subscription management, billing and any other applications that require information from the back office.

"MHBOSS was designed to address the latest trends in relational database and Internet technologies while anticipating the future," said Michael Pasquinilli, director of advanced engineering, Concurrent.

Spirent Announces Restructuring

Spirent Communications announced a restructuring that will see the company focus on its Performance Analysis business. The company said its restructuring will eliminate duplicated activities and processes, consolidate manufacturing and reduce general overheads. In addition, corporate overheads will be reduced significantly, with a number of activities being integrated into business units.

The total annualized cost reductions resulting from the restructuring are £21.5 million (US$43.0 million) representing an approximate 12 percent reduction in costs for Performance Analysis, shared services and corporate overheads combined. Approximately 70 percent of the cost reductions will occur in manufacturing and overhead areas.

Spirent said it believes that that there are significant opportunities for growth in broadband revenues, Wireless products and in Spirent TestCenter sales. In order to best exploit those opportunities, the allocation of development resources has been adjusted to achieve net sales growth and reduce risk by concentrating on the development and adoption of Spirent TestCenter and investing in the growth of Wireless and positioning products. The resulting reduction in product development spending for Performance Analysis will be achieved in significant part by consolidating projects into a smaller number of locations.

Telefónica Leads Investors to Gain Control of Telecom Italia

Telefónica will lead a consortium of investors to acquire Pirelli's stakes in Olimpia, which is the principal shareholder in Telecom Italia.

The new consortium, in which Telefónica holds 42.3% of the shares, will account for 23.6% of Telecom Italia's capital, thus becoming the largest shareholder of the Italian operator. The other members of the consortium include Generali (28.1%), Mediobanca (10.7%), Intensa SanPaolo (10.7%), and Benetton (8.2%).

Telefónica said it looks further to deepening its cooperation with Telecom Italia. Nevertheless, the two companies will be operated separately.

Nokia Siemens Networks Selected for IPTV in Poland

Dialog telecom, one of the largest independent fixed-line telephony operators in Poland, has chosen Nokia Siemens Networks to deliver and integrate an IPTV-platform into Dialog's network for interactive television and video-on-demand services. Nokia Siemens Networks will also supply the set-top boxes for the consumer homes to allow the new multimedia services to be used. The test installation will be rolled out this June and the commercial roll out is expected for end of this year. Financial terms were not disclosed.

Ericsson Sees Sales Grow 8% YoY in Q1 2007

Ericsson reported Q1 net sales of SEK 42.2 (39.1) b., up 8% year-over-year, excluding divested operations. Earnings per share rose to SEK 0.37 (0.29), up 28% year-over-year.

"We have concluded another quarter with solid performance and market share gains in a stable growth environment," said Carl-Henric Svanberg, President and CEO of Ericsson. "Sales growth in the quarter was primarily driven by Western Europe, and large turnkey projects in Central and Eastern Europe, Middle East, Africa and Asia Pacific. Our capability in managing such projects around the world is a competitive advantage. Margins remain stable, due to the benefits of scale and technology leadership. Our commitment to operational excellence continues and operating expenses grew less than 3 percent versus a sales growth of 8 percent."

Some highlights:

  • Networks: Ericsson said a 5% year-over-year sales increase in Networks was driven by growth in both fixed and mobile networks. The sales decline in North America due to the Cingular rollout peak in first quarter of 2006 is overshadowing the underlying growth in other parts of the world. Outside North America, growth amounted to 14% year-over-year. Operating margin was stable year-over-year.

    The good demand for GSM continues. Growth is primarily driven by new network deployments and capacity expansions in high-growth markets. New features are still being added, for example super EDGE with 1 Mbps downlink. 3G/HSPA rollouts continue and new licenses have been or will be issued in several regions, also in developing countries. Sales of fixed networks grew slightly, excluding acquired sales, with increased sales of transmission products more than offsetting a decline of traditional circuit-switching equipment.

    Ericsson also noted strong demand for Redback's intelligent router and said demand for transmission equipment is growing.

  • Professional Services -- The Professional Services business continued to make advancements throughout all areas and sales grew by 15% year-over-year. Growth in local currencies, which better reflects the actual activity level as services business is local, amounted to 20%. Recurring services revenues amount to more than 60%.

  • Multimedia -- The Multimedia group, which includes service layer products, revenue management systems, enterprise solutions and mobile platforms as well as the two companies Tandberg Television and Mobeon (presently being acquired) recorded strong growth during the quarter with especially encouraging development in revenue management, primarily prepaid and mediation solutions, and mobile platforms. Operating margin increased year-over-year as a result of the good growth and the effects of restructuring of enterprise solutions operations. As a fairly new business activity, growth and margins may fluctuate over the coming quarters.

Comcast Cites Strong Growth for Triple Play Bundles

Comcast's cable revenue increased 12% to $7.0 billion for the first quarter of 2007 reflecting increasing consumer demand for its Comcast Triple Play package. Revenue generating unit (RGU) additions increased 63% to a record 1.8 million in the first quarter of 2007 compared to 1.1 million additions in the same quarter of 2006. Comcast ended the first quarter of 2007 with 52.6 million RGUs.

Some highlights for the quarter:

  • Added 644,000 new digital cable subscribers in the first quarter of 2007 - highest level of quarterly additions in Company history and the 3rd consecutive quarter of accelerating digital subscriber growth

  • Video revenue increased 8% to $4.4 billion in the first quarter of 2007, reflecting growth in digital cable customers and increased demand for new digital features including ON DEMAND, digital video recorders (DVR) and HDTV programming (HDTV), as well as higher basic cable pricing.

  • Basic cable subscribers increased by 75,000 to 24.2 million during the first quarter of 2007 with 13.3 million or 55% of video customers taking digital cable services.

  • Comcast added 644,000 digital cable customers in the first quarter of 2007, an increase of 82% from the 355,000 digital cable customers added in the same period one year ago. The digital cable customer additions in the first quarter of 2007 include 337,000 digital cable and 307,000 digital starter subscribers.

  • During the quarter, 535,000 digital cable customers added advanced services, like DVR and HDTV, to their digital service either by upgrading or as new customers. This compares to 310,000 additions in the same quarter one year ago.

  • Pay-per-view revenue increased 26% to $181 million in the first quarter of 2007 driven by increasing ON DEMAND movie purchases. Pay-per-view revenue has increased more than 20% on average over each of the past nine quarters.

  • Added 563,000 high-speed Internet subscribers during the first quarter -- highest level of quarterly additions in company history

  • High-speed Internet revenues increased 21% to $1.5 billion in the first quarter of 2007, reflecting a 1.9 million or 19% increase in subscribers from the prior year and stable average monthly revenue per subscriber of approximately $43. Comcast ended the first quarter of 2007 with 12.1 million high-speed Internet subscribers or 26% penetration of available homes.

  • Added 571,000 Comcast Digital Voice (CDV) customers during the quarter - nearly 2.5 times more than the 232,000 customers added in the same period of the prior year

  • CDV service now marketed to 35 million homes representing 73% of Comcast's footprint

  • Phone revenue increased 88% to $353 million in the first quarter of 2007 reflecting a $216 million increase in CDV revenues from the prior year as a result of the significant growth in CDV subscribers. The increase in phone revenue was partially offset by a $50 million or 38% decline in circuit- switched phone revenues as Comcast focuses on marketing CDV in most markets. Comcast ended the first quarter of 2007 with 2.4 million CDV customers or 7% of available homes.

  • Advertising revenue decreased 3% to $313 million in the first quarter of 2007, due primarily to the impact of 12 broadcast weeks in the current quarter compared to 13 weeks in the same period of the prior year.

  • Capital expenditures totaled $1.4 billion in the first quarter of 2007, driven by a 63% increase in RGU additions and include approximately $70 million related to network improvements and integration of the newly acquired cable systems from Adelphia and Time Warner. Consistent with historical trends, approximately 75% of cable capital expenditures in the first quarter of 2007 were variable and directly associated with demand for new products.

Ellacoya Raises $13 Million for Deep Packet Inspection

Ellacoya Networks secured $13 million in new funding for its carrier-class broadband service optimization solutions based on deep packet inspection (DPI) technology.

Ellacoya's e30 platform and new e100 platform (a custom-designed 20 Gbps wire-speed DPI network hardware element) enable service providers to effectively identify and manage network traffic dynamically by subscriber, service type, time-of-day, etc. Ellacoya's platforms provide granular reports on network usage; manage traffic dynamically with precision; ensure VoIP quality; identity and prevent network threats; and provide the basis for quota management, differentiated service plans and quality-assured premium services (IPTV, VoIP, streaming video). The company has products installed at more than 150 service providers worldwide; including tier 1 telco and mobile wireless operators in each major region, and a recently announced deployment at SmarTone-Vodafone in Hong Kong.

The funding was provided by Ellacoya's syndicate of existing investors, including Atlas Venture, BCE (Bell Canada Enterprises) Capital, Canaan Partners, Lightspeed Venture Partners and Presidio Venture Partners.

Joost Signs Thirty-two Blue-chip Advertisers

Joost has signed 32 leading companies as advertisers for its forthcoming, broadcast-quality, Internet television service. These advertising partners include The Coca-Cola Company, HP, Intel, Nike, Electronic Arts, Esurance, Garnier Fructis, Kraft, Lionsgate, Microsoft Corp., Motorola Inc., Nestlé Purina PetCare, Procter & Gamble, Procter & Gamble (Hugo Boss Fragrances), Sony Electronics, Taco Bell Corp., United Airlines, US Army, Visa, and the Wm. Wrigley Jr. Company.

Joost said it has worked with more than 20 media and brand agencies to develop meaningful advertising campaigns for their clients. In addition, the Interpublic Group, through its Emerging Media Lab, has entered into a year-long strategic partnership with Joost.

Additionally, through a partnership with Frank N. Magid Associates, Joost will measure user consumption habits and advertising efficacy, including ad awareness, receptivity, engagement, brand enhancement and intent-to-purchase, for launch partners.

Level 3 Posts Communications Revenue of $1.037 Billion

Level 3's communications revenue for Q1 2007 increased 25 percent to $1.037 billion, versus $830 million for the previous quarter. Communications revenue increased primarily as a result of the inclusion of the results of the Broadwing acquisition and growth in Core Services revenue, offset by declines in other communications services revenues and SBC Contract Services revenue. The company recognized less than $1 million in termination revenue in its Core Communications Services revenue during the first quarter 2007, compared to $8 million in termination revenue during the fourth quarter 2006.

Core Communications Services revenue, which includes transport and infrastructure, IP and Data, Voice and Vyvx services, increased quarter over quarter by 41 percent. The increase was due to the benefit of revenue from Broadwing and the Content Distribution Network (CDN) business and growth in voice, colocation and IP services. Excluding the benefit of revenue from Broadwing and the acquired CDN business in the first quarter and $8 million of termination revenue in the fourth quarter 2006, Core Communications Services revenue increased approximately 3 percent in the first quarter.

Some highlights:

In the first quarter 2007, the percent of Core Communications Services revenue by each market group was as follows:

  • Wholesale Markets Group -- 58 percent, with strong customer demand coming primarily from cable and wireless service providers.

  • Business Markets Group -- 26 percent, with a focus on selling on-net core services to enterprise customers with advanced network needs.

  • Content Markets Group -- 10 percent, including the benefit of acquired CDN revenues, as well as continued demand from internet and portal customers, broadcast service providers and satellite companies.

  • European Markets Group -- 6 percent, with continuing demand from content, cable and carrier customer segments.

EarthLink Sees Continued Decline in Consumer Subscribers

During the first quarter of 2007, EarthLink's overall subscribers declined by 42,000 net subscribers compared to the fourth quarter of 2006 primarily due to a decline in consumer access subscribers. This decline in consumer access subscribers was related to a decline in premium narrowband subscribers, partially offset by growth in value, broadband and voice subscribers.

For the quarter, EarthLink's consolidated revenues increased to $324.4 million, or 4.7 percent, compared to the first quarter of 2006. This increase was driven primarily by growth in business services, partially offset by a decline in consumer services.

For the quarter, revenue from the business services segment increased from $18.2 million to $47.8 million primarily due to our acquisition of New Edge Networks in April 2006.

For the quarter, revenue from the consumer services segment decreased to $276.7 million, or 5.1 percent. Contributing to this change was a $21.2 million, or 8.0 percent, decline in our access services driven by declines in mature premium narrowband services, partially offset by growth in our value narrowband and broadband access services.

EarthLink also revised its previously issued guidance for 2007. Based on current results and expectations, EarthLink now expects year ending consolidated subscribers to decline by 200,000 to 250,000, and the company expects to generate approximately $1.3 billion in consolidated revenue. The company is narrowing its previously issued guidance for adjusted EBITDA from core access services of $190.0 million to $200.0 million and $108.0 million to $118.0 million for adjusted EBITDA for the year. EarthLink is also narrowing its consolidated net loss to $(110.0) million to $(140.0) million for the year.

The company is reaffirming its previously issued guidance for Helio. EarthLink expects Helio to end the year with 200,000 to 250,000 subscribers.

Ikanos Posts Q1 Revenue of $24.7 Million

Ikanos Communications reported Q1 revenue of $24.7 million compared with revenue of $21.0 million for the fourth quarter of 2006 and revenue of $35.8 million for the first quarter of 2006. GAAP net loss for the first quarter of 2007 was $9.1 million, or $0.32 per diluted share, on 28.0 million weighted average shares. This compares with a net loss of $15.6 million, or $0.56 per diluted share, on 27.6 million weighted average shares in the fourth quarter of fiscal 2006 and with a net loss of $1.4 million, or $0.06 per diluted share, on 24.5 million weighted average shares in the first quarter of 2006.

"We believe that the first quarter of 2007 was a turning point for Ikanos, marked by improved financial results. Revenues in the first quarter grew 17% sequentially led by demand for our access solutions. Gross margin improvements and declining operating expenses resulted in the reduction of our GAAP net loss by $6.5 million and our non-GAAP net loss by $4.0 million on a sequential basis," said Daniel K. Atler, CEO of Ikanos Communications.

NETGEAR Reports Revenue of $173.6 million, 36% year-over-year Growth

NETGEAR reported net revenue for the first quarter ended April 1, 2007 of $173.6 million, a 36% increase as compared to $127.3 million for the first quarter ended April 2, 2006, and an increase of 6% as compared to $164.0 million in the fourth quarter of 2006. Net income (GAAP) for the first quarter of 2007 was $14.0 million, or $0.40 per diluted share. This net income was an increase of 41% compared to net income of $9.9 million for the first quarter of 2006 and an increase of 4% compared to net income of $13.4 million in the fourth quarter of 2006.

Gross margin on a non-GAAP basis in the first quarter of 2007 was 34.7%, as compared to 35.1% in the year ago comparable quarter, and 32.5% in the fourth quarter of 2006.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "Revenue in the first quarter came in above guidance due to continued momentum across all channels. Product wise, there was good uptake on our RangeMax NEXT draft 11n products and ProSafe Smart Switches.

Broadcom Reports Q1 Revenue of $901.5 million

Broadcom Q1 net revenue of $901.5 million, a decrease of 2.4% from the $923.5 million reported for the fourth quarter of 2006 and an increase of 0.1% from the $900.6 million reported for the first quarter of 2006. Net income (GAAP) was $61.0 million, or $.10 per share (diluted), compared with GAAP net income of $45.1 million, or $.08 per share (diluted), for the fourth quarter of 2006, and GAAP net income of $117.7 million, or $.20 per share (diluted), for the first quarter of 2006.

"Broadcom's first quarter results came in better than we anticipated due to slightly higher than expected revenue combined with increased operating expense efficiencies," said Scott A. McGregor, Broadcom's President and Chief Executive Officer. "Mixed outlooks from a few of our larger customers are causing a lower than normal level of visibility into our near-term results. We believe that these issues are near-term in nature and we remain optimistic regarding our prospects for the second half of the year."

Sun Unveils its Massively-Scalable Video Streaming Server

Sun Microsystems unveiled its massively-scalable server for delivering personalized video-over-IP services to mass audiences at a cost of approximately $50 per stream. Sun expects the scalability of its Streaming System to reshape the economics of personalized video services over IP. Key capabilities include:

  • Up to 160,000 simultaneous 2Mbps streams per switch

  • Up to 640Gbps of total streaming capacity

  • Up to 768 TB of 300,000+ hours of storage

  • Open industry standards-based API for ease of integration

  • Simplified management with single point of control

The Sun Streaming System, which was designed by Sun co-founder Andy Bechtolsheim, offers approximately 10 times the streaming capacity of competitive platforms. Thirty-two integrated 10 Gigabit Ethernet optical networking ports combine multiplexing, switching and routing in a high-density video streaming chassis.

The Sun Streaming System is composed of a distributed software suite running on Sun Fire x64 systems, storage and switching technologies.

Key components of the Sun Streaming System are the new Sun Streaming Software, the new Sun Fire X4950 Streaming Switch, the Sun Fire X4500 data server and the Sun Fire X4100 systems. The software is based on open industry standards and supports more than 20 video streaming features, such as: MPEG-2 and MPEG-4 formats; bit-rate support from 1Mbps to 20 Mbps; standard-definition (SD) and high-definition (HD) streaming; encrypted and clear content streaming; at least six trick-play settings; Network Personal Video Recorder (nPVR) capabilities; and splicing and personalized playlists for permission-based targeted advertising. Open software standards, such as CORBA, XML, HTTP and RTSP, allow operators to integrate third-party components for an end-to-end video headend solution.

Sun Fire X4950 Streaming Switch: A scalable memory cache-based
content switching and streaming engine, the Sun Fire X4950 Streaming Switch provides the highest available streaming density at 320 Gbps and up to 2 terabytes (TB) of memory to enable scalable video streaming with a low cost per stream.

Sun Fire X4500 server: By integrating state of the art server and
storage technologies, the Sun Fire X4500 server powered by Second- Generation AMD Opteron processors delivers the performance of a
four-way x64 server and the highest storage density available, with
24 TB of storage in seven inches of rack space for up to 9,400 hours
of 2 Mbps video content storage.

s aligning with several resellers, partners and Independent Software Vendors (ISVs), including EDS and Nortel, to bring the Sun Streaming System's market-changing economics to customers in the video services industry.

Early access and beta customers such as Acetrax of Europe have already been testing the Sun Streaming System. In addition, a number of ISV and Independent Hardware Vendor (IHV) solutions have been integrated and tested with the system, bringing together an end-to-end deployment architecture for video delivery services. These partners include Advanced Digital Broadcast (ADB), AMD, Amino,, Harmonic, IMAKE Software, Juniper Networks, Minerva Networks, TANDBERG Television, Tellabs, Verimatrix and Widevine.