Microsoft XP has wider significance than most analysts appreciate. While the operating system is, in itself, not a huge advance on existing products - particularly Windows 2000 - its true significance lies in its value as a Trojan Horse for Microsoft .NET. As we indicated in the spring of this year, we think .NET moves Microsoft into direct competition with businesses as diverse as ISPs, mobile network operators and home electronics companies. Widespread adoption of XP makes the eventual success of .NET more secure

Nokia's recent guidance suggested a modest recovery in handset sales in 2002, followed by a strong resurgence thereafter. We think the position will be different and look for unit sales of about 450m next year, with only 3-7% growth in the years 2003-2005.

In this short note, we look at trends in mobile design and features. We show that the steady decline in size and weight is now over, and manufacturers are focusing on adding new functions, such as digital cameras, and even, in one case, a thermometer.

In this issue, Toby looks at recent evidence on UK multichannel viewing, particularly in the period immediately prior to the start of the new BARB audience panel.

Mobile operators’ marketing strategies are the primary determinant of the size of the market for handsets. The level of handset subsidy dramatically affects retailer sales. In this brief note, we look at the changes in retail subsidies in the UK during the past 6 months. We show how the emphasis on the acquisition of contract customers has meant higher levels of subsidy for the phones taken by these customers. By contrast, pre-pay subsidies have fallen.

This report provides an update on the major trends in the UK digital TV market. We use a variety of consumer market research data, which all offer a consistent picture of trends in the business.

Sky is doing well. But the evidence of the last quarter’s results suggests that it is not out of the wood yet.

The most recent quarterly operating statistics for the UK pay-TV providers point to the continued rapid slow-down in consumer subscriptions. This short note analyses the figures and offers a forecast for subscriber numbers over the next decade.

Business mobile data may be different. Mobile professionals are not major users of SMS, and will be prepared to pay for mobile access to networks. But we still have trouble seeing data accounting for more than 25% of operators’ revenues by the last years of the decade. Much of this revenue will still be derived from plain vanilla SMS, provided the regulators don't sink their teeth into the networks first.

Yesterday's third quarter results were broadly in line with market expectations. Analysts have noted that subscriber numbers are stagnant and that ARPU for domestic subscribers was essentially flat, quarter-on-quarter. The growth in broadband subscribers has been a real achievement - but the revenue benefit of adding even 35,000 new subscribers is less than £10m a year. This does not go very far in paying back debts over a thousand times as large.

To the potential US investors in NTL's equity, such as AOL and Liberty, this number must seem absurdly low. Cable businesses of a roughly comparable size in the States are worth tens of billions. We point to the key difference between the US and the UK. Overall ARPU levels are roughly comparable in the States, and capex levels are similar. The crucial difference is probably the systematically higher gross margins on cable TV in the States. This seems to explain most of the difference in cash generating capacity. Can the cable guys from the US increase gross margins on TV programming to US levels and thus make the equity in NTL worth something? We think it is most unlikely - even Sky makes less than a 50% gross margin, far less than a US cable company.

The issues surrounding ITV Digital are complex and unclear. This report tries to unpick the tangled threads. It looks at the main financial issues and the manoeuvres with the BBC, the Office of Fair Trading and the set-top box manufacturers.

In this short note Chris Goodall looks at consumer payment technologies. He says that the banks and credit card companies are under no immediate threat from new technologies. Do not be confused by the wizard new technologies coming out of Nokia; technical advances are not going to change payment systems much in the next five years. Rather, he suggests, observers should focus on three interesting companies which use low technology solutions to solve particular payments problems. These companies support, rather than undermine, existing players in the consumer payments industry.

This note provides an update on UK Internet trends covering the post-Christmas period. It covers usage, shopping and other online activities of the 17.7 million connected adults. The note highlights the feminisation of the UK online population and its impact on shopping behaviour.

Broadband cable suffers from several technical performance problems, including installation, actual performance and the costs of providing content, in particular to gamers.

In Germany, less than 5% of cable homes have been upgraded to digital, suggesting that Deutsche Telekom’s DSL push has irresistible momentum.