Hot Markets for 2007 — Prepare for Growth

Long distance, local wire, fibre optic and cable ($1.5B to print, -64 percent) are consolidating among small, rural providers (e.g., Citizens acquiring Commonwealth Tel) and the Baby Bells. AT&T’s merger with BellSouth will finalize in 2007 and other conventional providers are in marginal or zero growth as consumers migrate to wireless ($2B to print, 0 percent) and VoIP connections.

Telecom equipment ($0.4B to print, 0 percent) is flat except for network providers like Nortel (+10 percent) and among Research in Motion (+40 percent) and other makers of personal digital assistants (PDAs). Cable and satellite ($1.5B to print, -28 percent), post-consolidation, will unplug all but direct mail printing. Directories ($14.3B, -6 percent) will commence their decline into printing history, but still with $3B to print in ’07 and ’08.

At Number 13 is travel/hospitality ($762B, +9 percent; with $7.2B to print, +27 percent). Hotels and resorts ($3.4B to print, +17 percent) are opening new destination properties, and rebuilding and branding existing ones, at record rates. Business travel is back, as at Marriott (+16 percent) and Hilton (+13 percent), and resort timeshares are catching on among the aging baby-boomers.

Less overseas travel is forcing tour operators to up their ad spends, particularly in the Western Hemisphere where passports are now required. Airlines ($1.8B to print, +55 percent) will substantially consolidate with new logos, colors, literature, posters and signage. Cruiselines ($1.4B to print, +27 percent) are floating more collateral and outdoor print as the seas get crowded. Lagging this sector are destination parks ($0.6B to print, 0 percent), which are coasting down as ages rise.

Alarming in decline from Number 13 to Number 14 is security/protection ($528B, +10 percent; with $7.2B in print, -4 percent). Data/document integrity security ($1.6B to print, +14 percent) is the top security product as hackers and cyber-thieves take over tainted Websites and VML-code-flawed e-mail programs and browsers with large-scale spamming. VeriSign iDefense, Semantec, Microsoft and others are on the defensive.