Sony has introduced what it calls a new device category at CES 2010: the “Personal Internet Viewer”. This takes the form of Dash, a small, 7” touch screen internet access device with WiFi access to the home network. It will launch in April 2010 and retail at $199. Dash is based on Flash technology, so, “for Flash, get Dash”. Dash is based on Chumby’s internet service. It currently features more than 1000 internet services and applications across social networking, news, music and video, and can access video from Sony’s Bravia internet video platform. It can run multiple applications simultaneously. One drawback is that it is only mains-powered, so in-home portability is out of the question. Nevertheless we felt this was a very nice implementation of a simple to use, and relatively inexpensive internet access device. At $199 it could well become a favourite for kitchens and bedrooms. We were also impressed with the progress made by Plastic Logic, a company originating from the well-known hub for advanced display technologies – Cambridge in the UK. PL was showing off its QUE ProReader e-reader. At $649 the product is aimed very much at the professional needing to access multiple documents on the move, such as newspapers, books, newsletters and reports. Barnes and Noble is behind the QUE bookstore, and connectivity is via WiFi and AT&T’s 3G network. The device is extremely thin, light and easy to read, and battery life is supposedly several days in normal use. If volume sales lead to cost efficiencies and price declines this technology could find its way into the mass market. In the meantime the company is looking towards adding colour and eventually video capabilities. Client Reading: Consumer Imperatives for Digital TV Media Browsers

In a press release published today, we predict that AT&T and Verizon will post double digit IPTV subscriber growth for the third quarter. Both have seen an impressive growth clip over the past year, and are likewise experiencing increased consumer take up percentages. Consumer take up, clearly, is key here. In a report we released back in September, we talked about drivers and inhibitors to IPTV growth in the US market. One key driver of IPTV uptake is household broadband penetration, which is currently at 63%, and estimated to grow to 81% by 2013. Likewise, household familiarity and comfort levels with bundling will drive uptake-this has certainly been the case in European markets including France, where IPTV was initially "bundled" with broadband as a giveaway. The "content is king" adage continues to hold true, and operators able to secure exclusive premium content will likewise have the upper hand. Satellite provider DirecTV's exclusive "NFL Sunday Ticket" has proven to be an effective churn mitigator and revenue source. Finally, aggressive marketing, such as the print and television campaigns currently underway by AT&T and Verizon, will continue to raise awareness and generate demand among television households. Several factors stand in the way of consumer takeup, however, and these must be overcome if IPTV is to truly take off in the US market. Among these potential inhibitors are "Over the Top" (OTT) content-programming and content available for free or inexpensively online-which to some households will obviate the need for pay television altogether. Customer unfamiliarity is another key hurdle Telcos must overcome; to date Telcos have done an inadequate job in communicating the benefits of IPTV over cable or Satellite. They must make this a priority. Likewise, strong and aggressive competition from cable players, who currently have pipes into 90% + of US homes, must not be overlooked. Twitter: twitter.com/DavidMercer_SA Client Reading: US IPTV Market Sizing: 15.5 Million Subscribers by 2013

The NXTcomm convention is under way at McCormick Place in Chicago. The exhibition floor is populated by all the right names, but it somehow doesn't seem quite as packed as an industry-leading event ought to be, especially once you get beyond the big name displays. The conference and keynote sessions have at least attracted a high-profile line-up of speakers, headed this morning by AT&T's new Chairman and CEO, Randall Stephenson, and Cisco's John Chambers. Anyone attending CES in January could probably have afforded themselves a coffee break during Chambers' speech, 90% of which was given back in January. Stephenson at least gave the fresh perspective of a man barely two weeks into a new job, although singling the iPhone as the most critical example of a new convergence era was hardly original, if not surprising given the scale of AT&T's bet on its Apple partnership. I couldn't help wondering if Stephenson hadn't actually missed the point regarding news that 40% of registered interest in the iPhone came from non-AT&T customers. He suggested to the audience that this meant people wanted AT&T's service. Surely it means they want Apple, rather than AT&T? Once again, the question of who really has the customer relationship comes to the fore. I predict a honeymoon period for AT&T and Apple, followed by arguments and tears... I am watching out at NXTcomm in particular for discussion of the OTT (Over The Top) threat to telcos' customer relationships, but perhaps I've come to the wrong place as most debates skilfully skirt this awkward question. AT&T's CTO Chris Rice agreed that OTTs have a place, and that content "will come from anywhere". He seemed keen to suggest that they would not be able to offer anywhere near the experience available from managed telco services, but avoided citing any specific examples of why this might be true. Qwest's Pieter Poll was more realistic in accepting that "carriers are going to have to work out how they participate" in the changing competitive environment. While naturally avoiding committing to any vision of a clear OTT threat to telcos, Poll at least accepted that "it will be very interesting to watch how relationships will change over time". Indeed it will, for analysts and other third parties - telcos that continue to convince themselves that OTT players are in a different business may not survive long enough to see just how those relationships evolve.

Much of the turmoil we are seeing today in the media and communications industry can be attributed to the emergence of hypercompetition, where companies that were previously partners, and for technical or other reasons isolated from each other's core business, are now crossing value chain chasms and targeting their partners' customers. Apple, a computer company, moves into online media. AT&T, a network operator, offers television. Sky, a TV company, offers broadband. For the owners of each company these initiatives create growth opportunities, but for the industry as a whole there is a cumulative disruptive effect. My colleague, Martin Olausson, has just published a White Paper on Media Hypercompetition that discusses these issues in more depth. It's available for complimentary download here.