Week in research: Managed network services face reality check; game consoles rule OTT

Reality check for managed services: The boom may be over for the managed network services market, which will see its compound annual growth rate take on a moderate pace of just 7 percent between 2012 and 2018, an ABI Research report forecasts. "On one level we see a certain maturing of the market, as low-end field operations get commoditized and transactional cost based models give way to customer-centric managed services and strategic business transformation," said Aditya Kaul, ABI Research practice director. However, vendors including Alcatel-Lucent (NYSE: ALU), Ericsson (Nasdaq: ERIC), and Nokia Siemens Networks invested heavily in network operations centers, sacrificing profitability for market share, and are banking on operators relying on their services. "While operators face immense pressure to transform their business and not be relegated to dumb pipes by the OTTs, it remains to be seen if they will trust their managed service partners in helping with this transformation," Kaul said. Release

Not going on the cart yet: The set-top box market isn't on its last legs, a study by Infonetics Research says. Overall STB revenue grew almost 10 percent in 2012, with demand from China, India and Latin America still rising. In the fourth quarter alone, STB sales worldwide totaled $4.6 billion, up 3 percent over Q3 2012. Cisco (Nasdaq: CSCO) retained the lead in sales, followed by Motorola and Pace (LSE: PIC.L), while Samsung's entry into the North American market chipped away at Motorola's numbers. "Video gateways and media players will be the real standouts moving forward, as North American and European cable and satellite providers transition away from digital STBs," said Julien Blin, directing analyst for consumer electronics and mobile broadband at Infonetics. "We expect video gateways to grow from just 1% of total cable and satellite STB shipments in 2012 to 16% by 2017, and to see strong double- and triple-digit annual growth in media player shipments every year at least through then." Release

Infonetics set top box market 2013

Switch on the PlayStation: Viewers looking to get their OTT fix use their game consoles more than any other connected device, an NPD DisplaySearch study says. Sony's PlayStation, Microsoft's (Nasdaq: MSFT) Xbox, and Nintendo's Wii were used by 19 percent of consumers surveyed in seven countries. Roku, Apple TV (Nasdaq: AAPL), PPTLive and other media devices were used by 17 percent of those surveyed. Only 10 percent of consumers use smart TVs to connect directly to the Internet. Riddhi Patel, research director at NPD, said new options are beginning to emerge. "For example, USB-based media center box options, which are replacing physical boxes, are gaining popularity in the UK and other countries, while in China, smart TV adoption is on the rise due to aggressive promotions by manufacturers." Release

NPD DisplaySearch TV to Web connection type

(Source: NPD DisplaySearch Quarterly Smart TV Usage Study)