Deloitte Technology, Media and Telecommunications (TMT) Predictions 2011
DELOITTE CONSULTANTA S.R.L. - 19 January 2011
Deloitte's annual Predictions for the Technology, Media & Telecommunications (TMT) sector, now at their 10th edition, present the Firm's view of the major trends over the next 12-18 months that are likely to have significant medium to long-term impact for companies in TMT and other industries.
'The TMT sector and its impact on how we work, live and are entertained have changed significantly over the last ten years – changes that Deloitte has continuously highlighted in its annual reports. Also, these industries have witnessed a convergence trend over the past decade, and today the technology, media and telecommunications sector is now more interconnected and interdependent than ever before. With that in mind, this year's Predictions report is for the first time being published as a single report, rather than three separate ones,' said Ahmed Hassan, Audit Partner-in-Charge Deloitte Balkans, and TMT Industry Leader.
Technology Predictions for 2011
End of an era: more than half of all computers aren't computers anymore
More than 50 percent of computing devices sold globally will not be PCs. While PC sales are likely to reach almost 400 million units, Deloitte's estimate for combined sales of smartphones, tablets and non-PC netbooks is well over 400 million.
Operating system diversity: no standard emerges on the smartphone or tablet
By the end of 2011 no operating system on these devices will have a dominant market share. Some will have more than a 5 percent share, but no single player will have yet become the de facto standard, as has been seen in other computing ecosystems in the past.
Tablet computers in the enterprise: toys no more
More than 25 percent of all tablet computers will be bought by enterprises. Although considered by some commentators as underpowered media-consumption toys, suitable only for consumers, more than ten million tablets shipped are likely to be purchased by enterprises in 2011. The proportion is likely to rise in 2012 and beyond.
eGov: from option to obligation
While mandating use of eGov is mostly about improving productivity of existing technology assets, administrations should not overlook technology's capability to improve a country's attractiveness to foreign investors and also key talent. Efficient digital communication and transaction channels can all position a country positively, much in the same way that leading physical infrastructure can. While many governments, particularly those in industrialized countries are likely to remain focused on cost, the medium-term strategic benefits of digital government should remain on the agenda.
Online regulation ratchets up, but cookies live on
Although changes related to online privacy may not markedly affect revenue in 2011, companies should consider increasing their investments in online privacy infrastructure, leveraging industry tools and initiatives to improve self-regulation and get in front of future legislation.
Squeezing the electrons in: batteries don't follow Moore's Law
Although progress in battery technology may seem slow, even 5 percent annual improvement can lead to significant gains over time. The industry will need to keep innovating, both with lithium and non-lithium technologies. Maintaining realistic expectations and timelines will likely be key.
Hydrogen comes out of hiding: the alternative alternative energy source
Deloitte predicts that hydrogen will enjoy tremendous success in 2011. However, this success will not be seen in the automotive market as expected, but in other applications, such as clean standby power generation in the telecom industry and indoor forklifts, where hydrogen's energy density and environmental benefits outweigh its current limitations of high cost and lack of fueling infrastructure.
Media Predictions for 2011
Television's 'super media' status strengthens
Television will solidify its status as the current super media, defying some commentators' prophecies of imminent obsolescence.
Viewers around the world will watch 140 billion more hours of television, revenues from pay TV in the BRIC countries will rise by 20 percent;Worldwide TV advertising will increase by $10 billion, and 40 million new viewers will be added.
Television's five-year growth in advertising revenue, from $174 billion in 2007 to $191 billion in 2011, contrasts sharply with newspapers' decline in ad revenue from $126 billion to $93 billion over the same period. A forecast 6 percent increase in 2012 would take TV advertising revenue beyond the $200 billion mark: more than 2x newspapers, the #2 ad medium.
DVRs proliferate! The 30 second spot doesn't die!
Deloitte predicts that digital video recorder (DVR) penetration in two large markets will exceed 50 percent of TV households by year end 2011; but also predicts that TV advertising will be almost entirely unaffected despite that level of penetration. While DVRs provide the technological capacity to skip ads, the majority of DVR owners are likely to continue watching the vast majority of their television live.
Push beats pull in the battle for the television viewer
For most people, television continues to be a passive experience. Viewers value the option to choose, but often do not exercise it. Interaction – even among those with multiple ways to control what they watch — has generally been limited to choosing channels on a remote control or, for the most sophisticated users, selecting from a DVR menu of pre-recorded content. Technological progress is unlikely to shift these ingrained habits any time soon. Technology enables. But it cannot oblige.
Social network advertising: modest, not mega
Social networks are likely to surpass the one billion unique members- milestone. Also, they may deliver over 2 trillion advertisements. Yet the advertising revenues directly attributable to social networks will likely remain modest at roughly $4 per member, which adds up to less than $5 billion (a little under 1% of worldwide advertising revenues).
Games go online and on sale: the audience grows, but at what price?
Deloitte predicts that in 2011 the global computer and video games industry will continue growing but from a more diverse set of revenue streams. The industry is forecast to generate $52 billion in software revenues in 2011, 6 percent higher than in 2010, while hardware is predicted to generate only $13 billion, a decline of 19 percent.
Keeping the life in live: A&R diversifies.
The live music sector, with festival organizers at the forefront, will singly or jointly start expanding their talent creation and nurturing roles that until now have been largely left to music labels' Artist and Repertoire (A&R) divisions. The live sector will identify, invest in, develop and commercialize the next generation of stadium-filling artists, using a variety of approaches, from talent contests at festivals to dedicated facilities for nurturing new talent.
Pop goes pop-up: Music retail goes seasonal and temporary
Deloitte predicts that 2011 revenues for digitally distributed music will exceed physical music sales in at least one major market, most likely the United States. This long-anticipated event will probably be driven by a sharp decline in CD sales, rather than a significant increase in digital music subscriptions or downloads.
Telecommunications predictions for 2011
Getting to 4G cheaply: will many carriers opt for 3.5G instead?
The deployment of next generation Long Term Evolution (LTE) wireless networks will fall short of industry expectations. This is due to the continuing viability of the latest third generation (3G) wireless technologies, such as High Speed Packet Access (HSPA+), and the handsets that work with them.
Deloitte expects fewer than 30 LTE carriers in 6 countries will offer commercial service by the end of 2011 (130 carriers were running LTE trials at the end of 2010).
Wi-Fi complements cellular broadband for 'data on the move'
The volume of data uploaded or downloaded from portable devices via public Wi-Fi networks will grow at a much faster rate (25 – 50 percent) than the volume carried over cellular broadband networks.
The bulk of this growth will be video data; Wi-Fi is likely to become the default network for video applications.
What is 'in store' for Wi-Fi: online comparison shopping on aisle 3
Deloitte predicts that in 2011, 25 percent of North American big box and anchor tenant retailers will begin offering free in-store Wi-Fi access to shoppers. In 2012, the proportion should continue to rise in North America and start to spread around the world.
Video calling: the base goes mainstream, but usage remains niche
Deloitte believes that in 2011 video calling will be cheaper, better and more widely available than ever; yet a boom in demand is unlikely. Use of video calling will likely continue to grow steadily. However, we expect the vast majority of calls—both for business and consumer uses, and on fixed and mobile networks—will remain purely voice-based, and that most people who really need to see each other will continue to opt for face-to-face meetings rather than videoconferences.
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