IDC's EMEA Quarterly Network Tracker is said to show a quarter-over-quarter increase of 4% of network equipment spending to reach $3.8 billion in the third quarter of 2008, and a decline of 5% compared to the same period in 2007. However, when excluding residential equipment, the networking market shows a more positive picture, with 8% quarterly growth and a decline of 1% compared to the same period last year.
 
"Although the economic climate has not fully hit the networking market, growth is definitely lower compared to 2007 and we expect 4Q08 and 2009 to be more difficult for networking vendors as customer deals are postponed," said Evelien Wiggers, research manager for European Enterprise Communications Infrastructure at IDC. "We believe, however, that the fundamentals for network growth continue to be strong and that the networking market continues to see growth albeit at a much slower rate than before the economic crisis."
 
Among other key findings are the following:
·         Demand for enterprise WLAN equipment was most stable, with revenue growth of 8% QoQ and the same growth YoY. Ethernet switch revenue grew 10% QoQ but only 1% YoY. Router revenue increased 5% QoQ but declined 4% YoY.
·         The share of revenue coming from the residential market declined from 20% in 2Q08 to 17% in 3Q08. A maturing market primarily caused this decline, and together with declining sales prices this continues to put pressure on the residential networking market.
·         Cisco remains the largest networking vendor with a market share of 55% of the total networking market (total of routers, switches, WLAN) an increase of two percentage points compared to 2Q08. Juniper continues to be the second largest player with a share of 4.7% and Alcatel-Lucent holds third position with 4.5%, followed by HP Procurve, which has a market share of 4.4%.
 
IDC's study, EMEA Network Equipment Update, 3Q08 (IDC #I76Q, November 2008), presents the highlights of IDC's EMEA Quarterly Networks Tracker, 3Q08. The EMEA Networks Tracker provides in-depth information on quarterly shipments and revenues for routers, Ethernet switches, and WLAN for 23 countries in the EMEA region.

The latest report from telecoms industry analyst Ovum, titled 'Global mobile market outlook: 2008-2013', is said to reveal that, despite the economic gloom, emerging market growth and the development of mobile data services will continue to power the sector to ever greater heights.

By 2013 Ovum forecasts 5.63 billion connections, up 43% from 2008. However, Ovum does not feel that these are overly bullish projections given current market conditions. Global penetration in 2008 is estimated at 59% and is predicted to rise to just 80% by 2013. We expect prepaid connections to constitute 73% of connections in 2013 (up from 70% in 2008), so multiple SIM ownership will ensure that real population penetration will be lower.

Emerging markets are key to this continued growth. The China-India region (containing China and India, as well as Pakistan and Bangladesh) will continue to be the main connections growth engine, with a Cumulative Annual Growth Rate (CAGR) of 12% up to 2013. Yet, says Ovum, even here penetration is only forecast to rise from 40% in 2008 to 67% in 2013. Asia-Pacific and Africa are also expected to add to the number of connections.Ovum says it believes the adoption in rural areas will continue, but the penetration growth will naturally slow as fewer areas remain untouched by mobile.

Steven Hartley, senior analyst at Ovum and author of the report, said:
"As a result of the growing importance of emerging markets, a shift in the global balance of operator power is expected. An increasing share of customers in emerging markets will go to the new, rapidly expanding players such as Zain and Orascom. The result will be a raft of new, large scale global players by 2013. Today's European-based giants will face increasingly intense competition from equally large or larger competitors at both global and local levels. Efficiency and maximising synergies from their scale will be the critical success factor for both the old and new heavyweights."

By 2013 the total service revenues to operators globally is forecast to reach $1.1 trillion, up 23% from 2008. However, this is a significantly lower growth rate than the 43% jump in connections.

"The sheer volume of connections in emerging markets will be crucial in enabling operators to breach the $1 trillion service revenues threshold (expected in 2010). However, operators seeking connections growth must ensure that they can survive on very low Average Revenue per User (ARPU)," Hartley explains.

Voice will remain the most crucial revenue generator for operators, due to the increasing emphasis on emerging markets, and contribute 73% of global revenues in 2013. Furthermore, voice will continue to be the greatest cash generator in every region by 2013, including Europe and North America.

"With all the excitement surrounding mobile data it is easy to lose sight of the fact that communication is still the killer app for the telecoms industry. Operators must not kill the cash cow and should focus on offering voice services as cost-effectively as possible, while maintaining quality," Hartley concluded.

Ovum states that, after years of false starts, 2008 has finally seen data services take off. Data (including messaging) revenue is forecast to grow 79% globally over the coming five years.

According to Ovum, developed markets will be key to this growth, accounting for 53% of data revenues in 2013. Also significant is the shift in the make up of the data revenue in these markets. SMS pricing is likely to be eroded in competitive markets, so access to the internet will become increasingly important for operators. As Hartley explains, "We do not believe that many operators will be successful in providing content. Players from the internet domain will be better placed, so demand from the operator will be for access. However, according to Ovum's reports these internet players, such as Google and Apple, will not be able to destroy the mobile operators.

"They may take content revenues from the operators, but access will more than compensate. They also offer operators new service opportunities through partnerships. Operators will have more to fear from rival operators over the next five years than external players," Hartley concluded.

With Nortel's share price recently dipping to around 40 cents, ABI Research senior analyst, Nadine Manjaro, has said that Nortel's low fortunes are symptomatic of several current industry trends.

A recent study from ABI Research, "Mobile Network Vendor SWOT Analysis," is said to have examined the strengths, weaknesses and strategies of the world's major wireless infrastructure providers. It is said to provide insights into why bad economic times affect some companies more than others.

"Nortel is strong when it comes to the enterprise," she says, "but recently they have made a lot of investments aimed at winning business from service providers, efforts that have not really taken off because of an unclear strategy and changes in operators' technology choices. That was an ominous situation, which the global recession has now made more serious."

In contrast, Alcatel-Lucent was doing poorly too, but is now improving its performance and gaining higher ratings from financial analysts after a corporate revamp and a change of top leadership. Motorola's share price is on the rise too due to re-structuring and shifting focus into stronger segments.

Does the recession mean that network operators are cancelling or delaying infrastructure projects? Not necessarily, says ABI. Telecoms are actually faring better than many other industries, and while operators may cut spending, so far the cuts have mostly been operational rather than on infrastructure.

"It's about decisiveness and execution," Manjaro concludes. "Take a company like Ericsson: they're not doing great business, but their share price is still around $8.00. Their strategies are clear, and they benefit greatly from their emphasis on providing managed services as well as hardware. All vendors are struggling, but some more than others, and this market will weed out the weaker players."

GeoLife, a GPS navigation solution provider, has announced Navmii, a new GPS navigation system with integral friend-finder service, for use on Microsoft Windows mobile devices.

Navmii is said to offer convenient preloaded maps of the UK, supplied by TeleAtlas and doesn't require any monthly fees or subscriptions.

Navmii is available either on preloaded microSD card (included with SD adapter card), DVD or Download. Once the SDcard or the software is installed on a compatible Microsoft Windows mobile device with GPS capabilities, the software is ready to be used. Customers are said to get a simple and intuitive map display and user interface, which will allow the user to route to a chosen destination or find what they need from included Points of Interest. Navmii is a full navigation solution, providing clear turn-by-turn; voice-guided directions and a 'graphically rich', detailed moving map display.

Navmii integrates mobile GPS navigation with a new friend-find location-based service, 'GeoFriend'. GeoFriend allows users to securely send and receive locations to and from other Navmii users, answering the age old question, "Where are you? "

Navmii's advanced routing capabilities can then plot the best route to other Navmii user at a touch of a button.

Peter Atalla, CEO of GeoLife said: "Navmii not only offers the user a fantastic, easy to use and affordable navigation solution but also the added benefit of always knowing where the people that matter to you are. We believe connected Social Navigation is the future of this industry.

"With the GeoLife framework, we intend to fully realise the potential that has been shown in early LBS solutions and take them to the next level, where we believe they will become an everyday feature of modern life."

GeoLife intends to offer a full European and US version of Navmii in the New Year, featuring map data from Tele Atlas. Pricing will be announced in due course.

To broaden the reach of Navmii, a Symbian version will be available in Q1 2009. Versions for Android, Microsoft XP/Vista and Linux operating systems will be made available soon after.