tmt predictions 2014

TMT Predictions 2014 Advance. Intelligence.

1 © Deloitte LLP and affiliated entities.

TMT Predictions was first published in 2001


TMT Predictions methodology

8,000 specialists in

TMT, tax, audit, risk,

corporate finance

and consulting

Deloitte TMT

Research

Projects/discussio

ns with industry

bodies

Macroeconomic

research

Discussions with

clients around the

world

Experts at

industry analysts

and financial

institutions


Special thanks to Ipsos Reid!

Our exclusive partner and sponsor of Canadian public opinion data!

These questions were captured as part

of the Ipsos Reid Online Omnibus

– The method of data collection was

online and the sample source was

the Ipsos iSay panel

– A total of 1,032 interviews were

conducted, 18+

– Data is nationally representative of

the Canadian Population (and the

survey was administered in English

and French)

– The study was in field between

December 5th and 9th, 2013

Steve Levy Mary Beth Barbour


>250 end notes + >400 references + 1000s x conversations + 10,000s survey responses = P 13. Endnotes

TMT Predictions 2013 Report card


2013 Technology Predictions report card

The PC is not dead – It’s about usage not units

Bring your own computer – A tale of two interpretations

P@$$1234 – The end of strong password-only security

Enterprise Social Networks – Another tool, but not yet a panacea

Crowdfunding portals will raise $3 billion in the year ahead

The button stays beautiful

Came true, but less than

we predicted. At least so far

Didn’t come true

as we predicted

Legend

Came true exactly as

much as we predicted


2013 Media Predictions report card

4K kicks off

Dual video screening readies for prime time

Connected TV – Hits and misses

Over-the-top may lift legacy broadcasters and distributors more

than pure plays

The reality of “cord cutting” in North America



Didn’t come true

as we predicted

Legend




2013 Telecom Predictions report card

A strong year for LTE adoption

Smartphones ship a billion but usage becomes simpler

Not all mobile advertising is created equal

All-you-can-app

Wireless spectrum “rush hour” means more traffic jams



Didn’t come true

as we predicted

Legend




Total prediction accuracy

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013

No Theme! No Theme! No Theme! No Theme! No Theme!

Mass market 20% of

total sales

Niche market 80% of

total sales

Number of items

The long tail: Less loved items

and products

The body: Bestsellers

and blockbusters

Sale

s


Une grande niche


http://www.facebook.com/photo.php?pid=3312223&id=573317465


Smartglasses


You know they are transparent, low-resolution, work only with a smartphone, cost ~$500, and may violate various laws, right?

http://www.google.ca/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=D_lou8g1H5Gx5M&tbnid=ZqftqNfDpqj7ZM:&ved=0CAUQjRw&url=http://www.tapscape.com/second-preview-of-google-glass/&ei=PZFHUby0B8qD2QXfkYCoCQ&bvm=bv.43828540,d.b2I&psig=AFQjCNGFPNn2p-MwYO59yVH8swdm45TuSA&ust=1363731113331393


Smartglasses

for

smartworkers


Is it time for smartwatches?


We have had the decade of the device


$0

$100

$200

$300

$400

$500

$600

$700

$800

$90099A

00A

01A

02A

03A

04A

05A

06A

07A

08A

09A

10A

11A

12A

13P

14E

15E

16E

17E

18E

PCs Smartphones Gaming consoles TVs Tablets

The decade of the device B

illi

on

s


Smartphone replacement cycles are getting longer

18

19

20

21

22

23

24

25

2007 2008 2009 2010 2011 2012 2013e 2014e

Handset

repla

cem

ent

cycle

in m

onth

s

Source: US data, Recon Analytics, BI Intelligence


0%

2%

4%

6%

8%

10%

12%

14%

03A 04A 05A 06A 07A 08A 09A 10A 11A 12A 13P 14E 15E 16E 17E 18E

5 year trailing CAGR


Less money for

hardware means

more money for…


U.S. consumer electronic sales as a percent of global sales

of PCs, smartphones, tablets, TVs and game consoles

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013P 2014E


5.0 - 6.9 inches - phablets

<5.0 inches

Phablets will be 25% of the

global smartphone market

of 1.2 billion devices.

At an ASP of $417, that’s

$125 billion in sales.

Global smartphone sales


67%

23% 10%

5.1” to 5.9”

6.0” to 6.9”

Phablet ownership breakdown

5.0” to 5.1”

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%


“only” 25%

http://www.google.ca/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=lT-SG_68KEHQ2M&tbnid=v0YTvgJuwdJuRM:&ved=0CAUQjRw&url=http://venturebeat.com/2013/04/11/samsung-galaxy-mega-stupid-big/&ei=zsE1UqDgFImK2wWPlIDgDw&bvm=bv.52164340,d.b2I&psig=AFQjCNGtkndMT9-G77zrG2lgtNb_1oFFVQ&ust=1379341102955692


0%

10%

20%

30%

40%

50%

60%

Very likely Somewhatlikely

Neither likelynor unlikely

Somewhatunlikely

Very unlikely

After seeing TMT Predictions, how likely are you to

spend more money with Deloitte? (normal distribution)


0%

10%

20%

30%

40%

50%

60%

Very likely Somewhatlikely

Neither likelynor unlikely

Somewhatunlikely

I'd rather beattacked by

weasels(fouines)

Thinking about your next mobile device, how likely

are you to purchase a phablet?

(55+ only, n=351)


0%

10%

20%

30%

40%

50%

60%

70%

18-34 35-54 55+

Likely (T2B)

Very Unlikely (BB)

Phablet intent to purchase as next mobile device

n=184 n=230 n=129

16% Overall (n=1,032)

46%


Phablet intent to purchase as next mobile device (cont’d)

0%

10%

20%

30%

40%

50%

60%

<HS HS Post Sec Univ Grad

Likely (T2B)

Unlikely (BB)

n=72 n=245 n=476 n=239

16% Overall (n=1,032)

46%


$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

99A

00A

01A

02A

03A

04A

05A

06A

07A

08A

09A

10A

11A

12A

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14E

15E

16E

17E

18E

PCs Smartphones Gaming consoles TVs Tablets

Remember the mass-niche? B

illi

on

s


APEJ portable PC, tablet and phablet shipments, 2011 Q4-2013Q2

0 M

3 M

6 M

9 M

12 M

15 M

18 M

21 M

24 M

4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Unit Shipments

Portable PC Tablet Phablet


0% 10% 20% 30% 40% 50% 60% 70% 80%

Germany

France

Netherlands

United States

UK

Japan

Spain

South Korea

Singapore

Proportion of phablet owners having a smaller smartphone too

Source: Deloitte Global Mobile Consumer Survey, Developed countries, May-June 2013

Base: All Smartphone owners: 16, 378, Smartphone owners 12,313, Large smartphone owners 8,269


8% 7% 11%

16%

22%

29%

0%

10%

20%

30%

40%

18-24 25-34 35-44 45-54 55-64 65+

Never downloaded even one app (Developed Countries)

56% 54%

45% 39%

32% 25%

0%

15%

30%

45%

60%

18-24 25-34 35-44 45-54 55-64 65+

IM usage (Developed Countries)

75% 66%

51% 44%

35% 28%

0%

20%

40%

60%

80%

18-24 25-34 35-44 45-54 55-64 65+

Social Networking (Developed Countries) − Smartphone owners


http://www.google.ca/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=gMV8Bv0GX3FftM&tbnid=k-IdhDUKOMSCqM:&ved=0CAUQjRw&url=http://blog.world-mysteries.com/mystic-places/the-most-expensive-photos-in-the-world/&ei=0MM1Ut-QBqnx2wXg5YHYBg&bvm=bv.52164340,d.b2I&psig=AFQjCNF0P6DYdLsjMyAnYGsM0hxdrJ8P4w&ust=1379341590666010


Light space suit, appropriate for +130º C temperatures

http://www.google.ca/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=7DqM8UZ8t9WQYM&tbnid=LjybhKWC6UX4fM:&ved=0CAUQjRw&url=http://www.flickr.com/photos/oewf/4101457596/&ei=SsQ1UrfuFIjx2wX9ooCQBg&bvm=bv.52164340,d.b2I&psig=AFQjCNFUxEN9pUKVCXA4PSGmhuUxCLmTZA&ust=1379341736526150


27,6 26,7 27,3

0

5

10

15

20

25

30

2011/12 2012/13 2013/14

Hours of traditional TV watched per week by all Canadians aged 2+


0–20% Quintile – average hours per week

4,1 3,8

3,6 3,4

3,1

5,8 5,9

4,9 4,6

4,3 3,9

7,5 7,6 7,5 7,6

7,1 6,9

7,1 6,8

6,6

7,1 7,0

0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013A 2014E

Ave

rag

e H

ou

rs p

er

We

ek

Total TV Eng (0-20%) Total TV French (0-20%)

Source: BBM Canada, P2+, Each year defined by 4 November weeks, M-Su 2a-2a

*PPMs introduced for Total TV Eng in 2009

Adjusted to compare to PPM data


80–100% Quintile – average hours per week

58,1

55,9

57,1

54,9

53,9

52,1

54,5

55,9 56,7 57,0

58,0

50,9

55,2 56,1

59,3

60,6 60,3

62,3 62,5

61,1 62,0 62,0

45

47

49

51

53

55

57

59

61

63

65

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013A 2014E

Ave

rag

e H

ou

rs p

er

We

ek

Total TV Eng (80-100%) Total TV French (80-100%)

Source: BBM Canada, P2+, Each year defined by 4 November weeks, M-Su 2a-2a

*PPMs introduced for Total TV Eng in 2009

Adjusted to compare to PPM data


The reality

Number of Canadian homes that subscribe to any of cable, telco or

satellite pay TV service (millions)

11,8 11,8 11,8

0

2

4

6

8

10

12

14

2012 2013 2014

10,873 homes

cut the cord as of

September 30,

2013


Canadians who are currently subscribing to video subscription service (i.e. Netflix) or are in first free month

0%

5%

10%

15%

20%

25%

30%

35%

BC AB SK/MB ONT PQ ATL


Credit: Keytrends Report 2014, @CMF_Trends


Q1 2011

(weekly hours)

Q1 2013

(weekly hours)

Year over year

change

TV 1 69.8 75.1 +8%

TV 2 39.2 38.6 -2%

TV 3 26.0 24.2 -10%

TV 4 17.2 13.8 -19%

TV 5 6.8 4.2 -38%

Total 0%

US TV viewing in homes with internet


The reality

Number of Canadian homes that subscribe to any of cable, telco or

satellite pay TV service (millions)

11,8 11,8 11,8

0

2

4

6

8

10

12

14

2012 2013 2014

10,873 homes

cut the cord as of

September 30,

2013


We’re not cutting TV cords, we’re stacking them

Canadian households with at least one monthly pay TV subscription

service (millions)

0

2

4

6

8

10

12

2011 2014

One sub Two subs Two plus


0%

5%

10%

15%

20%

25%

30%

35%

40%

18-34 35-54 55+ Male Female

n=244 n=437 n=351 n=454 n=578

Canadians who currently subscribe to a video subscription service (i.e. Netflix) or are in the free first month

Overall (n=1,032)

19%


0%

5%

10%

15%

20%

25%

30%

<HS HS Post Sec Univ Grad

Current Subs/First Month

Former Subs

Video subscription services (i.e. Netflix)

n=72 n=245 n=476 n=239

Overall (n=1,032)

19%

7%


Aussi en France!


Only completions count!

Global tertiary courses completed 2014

Traditional Education MOOCs

100 million FTEs

@ ten courses

per year


Deep dive on U.S. student loans, cost of education, and income


Technology and

networks have

changed

Pedagogy has

changed

Skills half life and

retraining have

changed

Government ability

to pay has changed

Student ability to pay has

changed

Push vs. pull has changed

(Learn what you want,

when you want)

Data and analytics has

changed…to real time and

granular

Cross-subsidization will

need to change!

“The perfect storm”

TMT Predictions tailored events

Duncan Stewart can deliver a

presentation for your office/industry.

• Email Duncan: [email protected]

• Follow me on Twitter: @dunstewart

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mailto:[email protected]

tmt predictions 2014

Technology

affiliated entities

e deloitte llp

smartglasses deloitte

world2 deloitte llp

device21 deloitte llp

smartworkers19 deloitte

endnotes4 deloitte llp

money for25 deloitte