Analog Devices posted $614 million revenue for the quarter which represented a decline of 1.5% q-o-q. Industrial market segment fetched about half of the revenues at 49% of the total. Communications was the second largest contributor with 23% followed by Consumer and Computer markets with 22% and 6% shares respectively.

Communication segment showed the maximum gain of 6% for the quarter. Other segments showed a decline except the industrial which grew marginally by 1%. The increase in communications revenues is attributed to wireless infrastructure applications uptake along with the Analog products used in mobile devices.

TriQuint Semiconductor registered revenues of $128.5 million in Q407 that were sequentially up by 5%. The company saw a strong demand for its handset product which saw 14% increase in revenue, with 59% being contributed by 3G. Besides, Wireless LAN also demonstrated strong growth.

During this period TriQuint introduced 802.11n chip for WLAN applications. For the mobile data market, it launched “Quad Band/Tri Band” 3G solution product. The company also announced availability of a high-voltage gallium arsenide (GaAs) power amplifier transistors designed to increase the efficiency of 3G cellular base stations leading to energy savings.

• Carrier VoIP equipment revenues $147m. Best ever VoIP quarter
• Circuit voice equipment revenues in carrier segment: $69m
• Recent VoIP wins: Clearwire
• Enterprise voice equipment revenues $529m (includes both circuit and VoIP products)

Transcribed voicemails can be the easiest form of telephony-related user generated content (UGC) if you share such content with your connections. You could specify which group can have access to the transcribed voicemail contents.

But moving a step further, why not transcribe live calls and share the content? You could make it available to business colleagues if these are business calls. Transcriptions of personal calls can be made available to personal contacts. I have certainly been in situations where I have been asked to repeat the contents of the phone conversation to other parties. In fact it probably happens almost everyday. So rather than add some masala when narrating the anecdote, it might be better to share the original stuff.

We have a genuine problem with our video interviews feature. We cannot travel too much to get hold of people live in person. So there are two broad options to carry our video interviews remotely (given the bandwidth constraints on the Internet): either do a phone interview and ask questions on phone while the other person speaks into a webcam and later sends you link to download the video, OR do a video call over clients like ooVoo, record it and then do the necessary edits. I have been testing ooVoo and it does a good job.

The first option is understandably clumsy. The second option produces sub-standard video quality because of the limited bandwidth on the Internet. You get great video quality of your own side but the other person’s recording is grainy as usual. This is a genuine problem for which I have yet to find an answer. The only possible solution I can think of is an added feature on clients like ooVoo.

• 1.6 million VoIP subscribers as of end 2007.
• Added 102k during 4Q07 and 383k new subscribers during 2007
• VoIP represents 34% penetration in homes passed
• VoIP represented 8% of overall 2007 revenues. Overall 2007 revenues $6.5 billion
• Possible VoIP patent suits: “Potential liability would be the responsibility of our equipment vendors”

Other than the integration issues that IPTV operators often stumble upon, being able to differentiate their service is a major challenge. IPTV is in its infancy and it has to work much harder to shake the equilibrium in the pay-TV services market dominated by the traditional broadcast mechanisms, the cable and satellite. So far IPTV has not been able to offer anything new to the end users who are essentially technology agnostic. They want a TV service. And wherefrom that comes, hardly matters.

All the IPTV deployments are in early stages and the operators are keeping the services simple. Another issue is, though we can potentially have very innovative and differentiated services over IPTV, the operators are only willing to offer such services once they reach a certain scale. This critical scale is supposed to be around 5 million subscribers market. Even France Telecom, the largest IPTV provider is far behind this number at the moment.

Skype users have generated a call volume of 100 billion minutes since inception. Skype has 276 million registered users. The company started operations around August/September 2003. I worked the subscriber base backwards and got an average monthly growth rate of around 9% in registered users. That also gives an average minutes of use (MOU) at around 33 per month per registered user. Obviously if you consider just the active subscriber base, that average monthly MOU will go up substantially. So how to interpret the 33 minutes/month figure?

Interpretation 1: Skype is not just a pretty face. It is actually being used. The MOU may not be as close as in VoBB services from telcos, but the 33 minutes per month is not bad for a soft client. Keeping in view the fact that most Skype traffic is long distance, I think the usage matches that on PSTN.

COTS hardware has been around for more than a decade. What is keeping equipment makers from deploying these solutions?

A suitable COTS architecture has only been available for two years. Other COTS architectures like Compact PCI were basically enterprise technology. So COTS suitable for core telecom applications that can support five nines did not exist until ATCA availability. And ATCA availability goes back a couple of years.

I do see ATCA growing to be a multi-billion dollar business, but, as with all things in telecom, it will take time. The biggest complexity has not been about ATCA itself. It is about porting applications over to ATCA and, in particular, making a move to Linux. So moving to ATCA hardware is quite easy to do, but a lot of legacy applications simultaneously moving to ATCA are also moving from proprietary, 20-year–old, home-grown OSes to Linux.

One of the biggest motivations for using COTS hardware is the time-to-market factor. How far have vendors been able to achieve that in practice?

We have customers, who, using ATCA, have brought applications to market in under 12 months versus classic 24-to-36 month development period. We have a customer in Asia that chose our ATCA platform in Spring 2007 and, before the end of 2007, had live service up and running for a wireless application.

Can you perhaps name some of the application categorises that are being enabled by COTS hardware such as ATCA? How would you generalise the type of applications being ported over to ATCA platform?

ATCA will be the hardware of choice for a wide spectrum of applications. Over the last few years we have seen particular strength in the wireless arena: media gateway, RNC, SBC, and IMS applications like media server. IPTV has also been a very good adopter of using ATCA. From the fixed network side, we are seeing elements like access consolidator and echo cancellation as prime candidates.

RingCentral, the SOHO and micro-enterprise focussed service provider, has raised $24 million through two rounds of funding within the last six months. It announced its second round yesterday. The company serves over 50,000 SOHO/micro-enterprise customers. I have so far covered three other service providers in this category: Toktumi, Phone.com, and Vocalocity.

According to RingCentral, customer acquisition costs and churn are low, which is why top-tier venture capitalists are interested in RingCentral.

Session Border Controller (SBC) revenue during 4Q07 was up 3.3% from the previous quarter 3Q07. A total of 5.9 million ‘sessions’ capacity were shipped during 4Q07 generating $46.6 million in revenue. 307 revenues were in the range of $45.1 million for the segment.

Acme Packet leads 4Q07 SBC segment with market share of 56%, followed by NextPoint. Vendors who are made significant inroads into the SBC market during 4Q07 include Covergence and Huawei.

I will be posting 4Q07 results/estimates for other VoIP segments tomorrow.

Nextgen Class 4 softswitch lines revenue during 4Q07 was up 21% from the previous quarter 3Q07. A total of 7.3 million lines were shipped during 4Q07 generating an estimated $108.8 million in revenue. 3Q07 revenues were in the range of $90 million for the segment.

Sonus leads 4Q07 Class 4 softswitch segment with market share of 26.2%. Sonus also leads the North America region, Italtel led the EMEA market while Huawei leads APAC region.

Service Provider VoIP Media Gateway revenue during 4Q07 touched an estimated $234.3 million. That represents a massive q-o-q growth of 55.6%. A total of 9.5 million ports capacity were shipped during 4Q07.

By the number of ports, Huawei led the market with 28.1% market share worldwide, followed by Cisco and Sonus at number 2 and 3 respectively. Sonus emerged market leader in high density gateways.

In 4Q07, vendors shipped an estimated 9.8 million VoIP Subscriber Feature Server licenses for deployment in service provider networks, generating $177.4 million in revenue. The number of lines is up by 34% Q-o-Q. The growth is due to high VoBB activity in Europe and among Cable MSOs in North America. In Asia-Pacific VoBB growth is still confined to Japan mostly.

Carrier VoIP equipment market has had a great 4Q07 across most equipment categories. Carrier spending, it seems, was pushed back to later part of 2007. That was reflected in Q4 results for the industry as whole.

Here are some of findings from 4Q07 minutes data survey:

• Service providers worldwide recorded an estimated traffic volume of 351.5 billion VoIP minutes during 4Q07. Actual volume (after double and triple counts*) is around 322.8 billion.

• Split: 81.7 billion local, 221.3 billion national long distance (nld), 19.8 billion international long distance (ild) if you disregard the double counts

• Local split: 77.9 bn is retail VoIP, 3.8 is wholesale local VoIP i.e white labelling and termination for small providers. The 77.9 billion also includes iPAS local call volume in China

Providing VoIP service since: 2004

Challenges: Limitations due to being self funded; competition from Skype

Number of subscribers: 200 business customers

Advice for upcoming VoIP providers: Ensure that you gain appropriate funding and form strong partnerships

Areas of innovation: Providing Windows based soft PBX with Outlook integration and also developing private communications on VoIP for social networks

Voice-Web mashup strategy: VoIP for social networks with a degree of privacy to protect the user from abuse calls

Company URL: www.voip-express.net

• VoIP subscribers in Norway 131K
• VoIP subscribers in Sweden 202K
• VoIP subscribers in Denmark 99K

There are over 20 IPTV middleware vendors generating meaningful traction. Keeping in view the growth prospects of overall IPTV equipment market over the next few quarters, this segment is likely to see some consolidation during 2008. Orca acquisition is a start to a wider vendor consolidation across IPTV equipment industry expected this year.

Encoder space is perhaps the most consolidated segment in IPTV market. There are around 6 major players left in that market now. Hardware oriented platforms usually commoditize faster and hence consolidate earlier. IPTV middleware is a software product.

What is the total addressable market for mobile VoIP?

There are about 75 million phones in the market today that can do mobile VoIP. Over a billion can do some sort of bridged mobile VoIP solution.

What has the traction been for you geography wise?

We have customers in 149 countries. So the interest is broad. Our number 1 country in UK, followed by US and Italy.

With fixed VoIP you need ATAs to get going. With mobile VoIP, if you have a smart phone you don’t really need any other adaptors. So in that sense mobile VoIP is going to be even more disruptive than fixed line VoIP.

Yes. It is relatively easier to use. You don’t have to locate any junction boxes and find sockets to plug things in and out. You press a couple of keys on your phone and set it up and use it. So yes, a lot more disruptive than fixed line VoIP.

There seem to be four major mobile VoIP players out there in the market (apart from Skype): Fring, iSkoot, EQO and yourself. What are the ingredients of success in mobile VoIP?

Mobile VoIP is technically quite complex, both on the server side as well as the handset side. There are lots of developers that have announced support for Nokia phones that come with VoIP capability. They give you username and password which you can put into the device. And that is way too hard. So basically very few companies have been successful in doing the integration work and making it work. You need to be smart. Apart from that you need to be well funded. The ones that you mentioned are all well funded. Hopefully we are smart too.

• 379,000 IPTV subscribers, of which 304,000 are in sweden
• Added 103,000 new IPTV subs in 4Q07 (88,000 in Sweden)

• 70K IPTV subscribers
• Added 10K new subs during 4Q07 compared to 20K in 3Q07

• 1.3 million VoIP/Broadband customers
• 740k IPTV subscribers, up 73% y-o-y
• Fastweb’s network has been extended to cover 11.4 million households or 50% of Italian population

• 959k VoIP Subscribers
• Added 155,300 new subs during 4Q07, the most active VoIP quarter so far
• The company added 513k customers during the year 2007
• VoIP represents 10.6% penetration into the overall customer base

• VoIP subscribers: 2.9 million, representing 12% penetration of service-ready homes passed
• Added 285,000 VoIP subscribers during the quarter
• VoIP now available to all customers on systems acquired from Adelphia and Comcast
• On … I guess … the threat of possible patent suit: “Unlike Internet phone providers, such as Vonage, TWC does not utilize the public Internet to transport telephone calls.” TWC outsources call termination to Sprint
• Continued roll out VoIP services to SMEs. Numbers not revealed

• 656k subscriber lines
• Net additions were 65k for the quarter, of which approximately 2,000 were migrations from the circuit-switched platform
• Cable’s Internet subscriber base at the end of the quarter was 1.46m

My motivation for suggesting this is not the Clean Tech thing. You lose VoIP service when there is a power outage. If there is a backup supply of power by way of some solar power panel, you would be able to keep the service running at all times.

There were nearly 10 million VoIP subscriber licenses sold by Voice-over-Broadband server vendors in 4Q07. There are many countries in the world that would require less than that to serve the entire population. While the broadband telephony marches on there are certainly some limitations.

I have, for example, not received a satisfactory answer to a couple of questions. (1) It is still a best efforts service and therefore how do you make sure that you maintain QoS and call priority across multiple backbones and access networks? (2) How do you make sure that you keep the dialtone going during ultra busy hours or at times of emergencies?

You would get MPLS type answers thrown at you for the first question. But to think that all the carriers involved in transporting your international VoIP call will agree upon the packet priorities is truly impractical. But I will mainly discuss the second issue today. In the PSTN world your local exchange was engineered with a 1:10 ratio i.e. 10 outgoing circuits (from local exchange to regional exchange) for every 100 subscribers. So if there are 10 simultaneous active calls going on and you pick up the phone, you will not get the dialtone. In the broadband telephony world, the service provider typically manages similar ratio so that if the number of simultaneous call sessions exceeds 10 percent of the subscriber base, you will get no dialtone (and if you do, it is likely to be a false dialtone).

One of my closer friends, who happens to be a doctor, is filling me in on news about the US economy these days. Doctors here have a poor reputation of knowing anything beyond their profession. But when we parted ways yesterday he asked me whether I was going to keep an eye out for Fed rate cut this week. If my friend is tracking the situation, I guess it must be worrying then. But to cheer our American friends up, my estimates suggest that the US has – as long expected - overtaken Japan in retail VoIP subscriber numbers.

At the end of December 2007, US had an estimated 16.1 million subscribers while Japan had a total of 15.7 million. Another development that has taken place is that NTT has emerged as the largest retail VoIP service provider in the world. With 5.032 million customers, it overtook Softbank BB in 4Q07 who actually slipped back from 4.8 million subscribers as of end 2006 to around 4.3 million VoIP subscribers. After NTT, therefore, Comcast is number 2 VoIP service provider in the world. In total, there were estimated 64.7 million retail VoIP subscribers worldwide as of end December 2007.

Where do you think voice as an application is headed?

If you look at the recent developments you have cellular companies offering unlimited voice for $99 per month. And as we move more towards IP-at-the-core there is no justification for a particular packet to be billed higher than other packets on the network. Just like the wireline operators are moving towards a flat rental of the broadband pipe, the cell operators will be moving towards a flat rental of spectrum. How you utilize your rented asset in terms of the applications mix will be up to you.

What sort of role do you think web will play in transforming voice?

These web based voice startups have not done anything significant so far. Their impact is marginal at best. There is no true innovation yet. Usage has not ramped up either. AT&T probably handles more traffic each minute than what these startups manage for an entire month. The biggest impact on voice comes from IP itself and not necessarily the web in the sense that volumes of traffic keep growing with the increasing use of IP backbones.

But there seems to be a lot of money being pumped into the web based VoIP startups.

Let us not confuse investment with rationality and market reality. VCs believe that this is going to be a huge market but you are up against 120 years of user behaviour with the plain old phone. Even among the younger generation, you don’t see them replacing web for their cell phones.

Communications Chip market generated estimated revenues of $9.8 billion in 4Q07, up by around 5% sequentially on Q-o-Q basis. Total shipments estimated during the period were 854 million chips. Texas Instruments leads the market with estimated 17.1% market share. Other leaders for the quarter are Freescale, STMicrosystems, Broadcom and Qualcomm which – among the four of them - held around 58% of the market during 4Q07.

Broadband segment is the main contributor to the overall communication chip shipments. However during the quarter broadband chips contribution remained flat at around $2.2 billion which is 22.6% of the overall communications chip revenues for the quarter.

Mobile VoIP is in for a rollercoaster ride. If you have been looking to try mobile VoIP but the cost of handset is an issue, you may not need to wait much longer. Infineon has introduced a VoIP-enabled WiFi chip for low cost phones which essentially expands and multiplies the reach of mobile VoIP 20 times over. Right now, only high cost smartphones are VoIP capable. In fact only about 75 million mobile phones can do VoIP. Infineon chip will expand that capability to, potentially, over a billion handsets.

So what sort of impact should we expect from the wonder chip? I would expect the following:

Grandstream Networks, a hot ATA startup few years back, has secured a supply contract with Pakistan’s Wateen Telecom. Wateen is supposed to be world’s largest WiMAX network lit up by the likes of Motorola and Sylantro. The service provider plans to offer the whole bundle: data, voice, and video.

Grandstream will be supplying its ATAs and video phones. Video phones represent a smaller but emerging line of Grandstream business. The vendor saw video phone sales grow 300% last year. Units figure is “tens of thousands of phones”. Wateen is one of the two tier 1 service providers it is counting on to achieve another triple digit growth in video phones this year. The other tier 1 provider is a European carrier.