Early this month PCCW in HK launched their Media Phone service called “Eye2″

This is a wireless Portable Media Player with content from PCCW’s IPTV service. It can also support voice and video call. Looks like this is a trend for fixed line telcos to use “IP Convergence” devices to generate additional revenue from fixed line subscribers. In USA similar services are already available:

• AT&T Home Manager
• Verizon Hub

Traditional fixed line telcos are facing tough competitions from mobile operators and VoIP service providers. By adding value to existing offerings ( in PCCW case the multimedia content ) they can avoid direct pricing competitions while generating additional revenue from existing subscribers.

In a recent GIPS blog post, John Hermansen correctly pointed out that we should be skeptical of the current crop of market predictions of the latest “hot new consumer device”, the media phone. 

One thing is certain though, the release of new media phone contenders, and the inexorable movement of video to all kinds of consumer electronic devices continues. Internet video is going to be enabled on lots of stuff, including the next generation multimedia-rich mobile phones, mobile computing devices, set-top boxes, Internet-connected TVs, and media phones. 

As evidence of this, consider the following two news releases on June 2^nd: 

1) Sorensen Media announced “a significant expansion of its Spark licensing program as a result of accelerating market demand and proliferation of Internet video.” The announcement goes on to say that “Spark is the Internet’s most widely deployed video codec, powering hundreds of millions of Internet videos, including those on YouTube, the volume leader in online video streaming.”

2) Also on June 2^nd, ARC announced “its latest Sound-to-Silicon solution aimed at the new category of broadband-based multimedia device, the Media Phone”. The ARC solution is designed to provide partners and OEMs with a  reference platform for “quickly entering and gaining share of the fast-growing Media Phone market.”

There are going to be a lot of new Internet video enabled consumer electronics devices in our future. I hope some of them will actually be useful to consumers, and by extension, successful in the market place. Stay tuned.

According to TWICE.com, In-Stat has published a report predicting North American shipments of home “media phones” to surpass 14 million by 2013.  These multimedia devices, such as the Hub from Verizon and HomeManager from AT&T, include Internet access and unified messaging, in addition to basic phone service.

The report claims that media phones will be “complimentary” devices, and will not replace any other consumer electronics.   This seems in line with my colleague Larry’s blog about the Hub back in January, in which he discussed how, by offering advanced services, telcos can maintain home phone subscription revenue. However, it remains to be seen if people actually want another device in their home that essentially offers the same features as equipment they already have (TV, computer, phone). It seems to me that the main advantage of unifying communications and entertainment features is to reduce clutter and end up with a device that offers more than any of the originals. I think it is more likely that people would want to get rid of their home phones, for instance, if their other household appliances (TV or computer) offered calling and messaging capabilities. I know that once the iPhone exceeds 30 GB storage capacity it will become a lot more appealing to me because I can then use it as my portable music player, thereby replacing not only my current cell phone, but also my iPod.

But hold on! There is another reason to be skeptical of the prospect of media phone success. The opening sentence of the article sheds some light on how difficult it is to predict market trends, and the reliability of market research.  It reads, “North American shipments of broadband-connected residential media phones could hit almost 14.3 million units in 2013, up from zero in 2008 and up from a forecast 700,000 to 1.4 million in 2009″. Did you catch that? In-Stat doesn’t even have one year of reliable data upon which to base a prediction! These products didn’t even exist a year ago, and we only have a vague notion of how many will ship this year, yet we are going to go ahead and try to predict how many will ship 4 years from now. I am sure Verizon and AT&T have some complicated models for these things, but I find it hard to believe that a 3^rd party firm like In-Stat could make this kind of forecast with any degree of confidence. Isn’t that like trying to predict how tall your 4 month old child will be when he or she gets to be an adult? Sure, there are methods out there, but I don’t think they are terribly accurate.