The ebook market has broken out of its niche. Just 3% of the US consumer books market in 2009, ebooks are on track to hit 10% this year, with the UK following close behind. With global consumer books a $120 billion industry, disruption will have dramatic consequences

Amazon has sold perhaps 3-5m Kindles in 33 months – Apple sold 3m iPads in the first three months and 3m of the iPhone 4 in the first three weeks. Amazon might look as though it is on the back foot, but as this week’s £109 Kindle shows, the game isn’t over yet

We expect the ebook market to splinter, with tablets, ereaders and smartphones all playing important parts for different genres and demographics. This makes control of the Kindle platform a key advantage for Amazon

The Apple ‘antennagate scandal’ has received massive press attention, reflecting perhaps more the extent of Apple’s smartphone incumbency than the extent of the reception issues with the iPhone 4

The problem may be greater than Apple publicly admits to, but it is less than it first appeared to be. The resulting consumer confusion will not help unit sales, but we still expect them to grow, supported by a number of feature set advances in the iPhone 4

Android handset sales are growing very rapidly, and are in a sense ‘catching up’ with the iPhone; while Android may end up dominating the mid-range, the iPhone can still enjoy an (enlarged) position at the top end, provided it can maintain a premium price justification

The transaction size means that the OFT was obliged to examine BSkyB’s purchase of the VMtv channels. The transaction will probably be approved because of the small impact on Sky’s share of NAR (Net Advertising Revenue), which will rise from around 14% to 16%

The more pressing competition concern, which has attracted little attention, is Sky’s growing market power in the determination of carriage fee payments. Nevertheless the lack of companies actively prepared to complain to the OFT probably means that the transaction will go through without a murmur

Separately, the likely purchase of Five by Richard Desmond raises regulatory issues to do with the possible reduction of media ‘plurality’. The Sky/VMtv transaction and Channel 4’s taking over UKTV advertising sales also places Five Sales in a significantly weaker position, but any attempts to join with one of the big three sales groups (ITV, Channel 4 or Sky) may well be rejected by the competition regulators

Vodafone Europe’s revenue growth again notched up, increasing by 0.7ppts as reported or 0.3ppts in underlying terms, with minutes volume growth accelerating by 1.8ppts

This is a little disappointing in the context of the rate of reported GDP recovery, but consumer confidence, particularly in Southern Europe, has re-dipped in the last few months, making raw GDP figures less relevant than they once were

Data revenue is forging ahead, but voice pricing is steadily weakening, and with many offers linking voice, text and data into an inseparable bundle the former may be causing the later, implying that data’s contribution to overall revenue is easy to overestimate

UK reported mobile subscriber growth has returned to stronger growth over the past few quarters as the UK economy slowly recovers

O2 is still the leading operator in terms of both its own customer loyalty and share of other operators’ customers who intend to switch, though its lead has narrowed considerably on last year

UK handset sales are likely to continue to rise, with intention to replace in the next 12 months rising from 32% in 2009 to 35% in 2010, which is albeit still some way short of the 40% pre-recession figure

Data usage overall is up –the proportion of consumers regularly browsing news and information increased to 22% from 16% last year. However, this increase was not uniform; 5ppts of this was the direct result of there being more iPhones and BlackBerrys in use, and only 1ppt was due to increased usage on any other handset

UK consumer magazines continue to be squeezed by every consumption, technology and market trend, yet we believe the sector, while rebasing in scale, continues to offer unique attributes as a media experience for consumers and marketers

Circulations are falling, and in the context of digital media usage leading titles in each magazine genre are not just typically gaining market share, but emerging as the only ‘must have’ brand for consumers and advertisers

Publishers with multiple titles in mid-table positions may be able to draw short-term margin from some of them, but long-term investment plays increasingly need to be at the top of the pile

FT has put majority stakes in Orange Sport and Orange Cinéma Séries on the block, and claims to have held discussions with News Corp. We think it unlikely that an investor would be interested in entering the French pay-TV market, dominated by Vivendi’s Canal+

We believe FT could find a buyer for Orange Sport in Disney’s ESPN, which could prove viable if a cross-retailing deal is reached with Canal+. A Eurosport merger is another option. Orange Cinéma Séries could be viable under a new owner, if it widens it distribution to other platforms

Now officially on the way out of the pay-TV production business, a welcome decision in our view, Orange can focus on improving the consumer value of the basic TV offering on the triple play marketplace

Subject to BBC Trust approval, Canvas looks almost certain to launch in spring 2011 after the OFT decided that it did not have the jurisdiction to review Canvas under the merger provisions of the Enterprise Act 2002. The OFT decision does not rule out complaints on other grounds, but the chances of persuading the regulators look very small

The launch of Canvas promises to strengthen significantly the free-to-air digital terrestrial platform, otherwise very limited compared with satellite and cable platforms in terms of bandwidth, but mass adoption poses numerous challenges and it is open to question whether Canvas will ever extend to more than half the DTT base

In the long term, it is hard not to see Canvas as an interim step in the growing convergence between the TV screen and the internet, raising the question of how successfully its PSB TV-centric approach can adapt to the coming challenges of the full blown digital age

This report updates our coverage of the commercial radio sector. In Q1 2010, RAJAR data showed that the average number of hours listened per listener and the total number of hours listened, across both the commercial sector and the BBC, fell by 2.7% and 1.2% respectively compared to Q1 2009. This continues the long term trend of gradual consumption decline we have highlighted in the past. Another consistent trend is the relative robustness of listening to BBC radio, whilst the brunt of the decline is borne by the commercial sector

Whilst BBC radio is funded by the licence fee, the commercial sector relies on advertising, which was severely impacted by the recession in 2008-09, on top of the structural shift of advertising to the internet. Oversupply of radio inventory continues to cause downward pressure on ad rates. As the UK economy exited recession in Q4 2009, commercial revenues rose 6.3% over Q4 2008, after six consecutive quarters of revenue decline. Q1 2010 is expected to come in at approximately 7-8%, with more modest positive growth in Q2

Public sector advertising, which includes procurement by the Central Office of Information (COI), has proved to be a significant source of income for radio (18.9% of revenues in 2009, COI itself accounting for 11.5%). On 24 May George Osborne announced that, with the exception of previously committed and “essential” campaigns, further COI advertising will be put on hold until March 2011. Based on this understanding about COI spend, which will translate to a small negative impact in H2 2010, we expect H2 2010 to be flat. Overall, we forecast small, positive annual growth of commercial segment revenues of 2.5% for 2010

Whilst income is being compressed, the cost of serving dual analogue and digital transmission remains a strain. Ofcom’s ongoing deregulation will have a small positive impact on costs. However, further station closures are entirely possible, especially if COI spend continues to be squeezed

In June, Apple’s new ‘iAd’ unit will begin serving ads within iPhone apps. iAd will compete with Google’s AdMob, paralleling Google Android’s competition with the iPhone, as the two companies contend to shape how people will use the mobile internet

The iPhone’s success is underpinned by apps, which draw in both consumers and publishers in a virtuous circle, but undercut Google’s search model. With iAd, Apple seeks to make sure iPhone apps remain the most profitable place for publishers

Steve Jobs has suggested a multi-billion dollar revenue potential – the true figure could be a tenth of that, but the real value of iAd will be in defending and supporting the iPhone