What’s on the horizon for tech

Paul Lee, Partner, Deloitte12th October 2017

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TMT Predictions 2017 2

• Smartphones: the first decade

• 5G: a revolution in evolution

• Prints charming: biometric security reaches the billions

• The great indoors: the final frontier for digital navigation

The decade of invisible innovation

TMT Predictions 2017 3

Smartphone adoption

Stable and strengthening

4

The penetration rate for most devices increased between 2016 and 2017

Source: UK edition, Deloitte Global Mobile Consumer Survey, May – Jun 2017Base: All respondents aged 18-75 years, UK, 2017: 4002

Q. Which, if any, of the following devices do you own or have ready access to?

VR

headset

Smartwatch

Fitness band

Standard mobile phone

Portable games player

eReader

Desktop/tower computer

Tablet

Laptop computer

Smartphone

Device penetration 2017 and year-on-year growth (percentage points)

31%

85%

78%

20%

18%

48%

68%

16%

6%

6%

4%

2%

5%

0%

2%

2%

-2%

7%

2%

3%

5

73%

52%

22%

16%

76%

62%

29%

36%

75%

70%

31%

50%

79%

76%

31%

60%

76%

81%

29%

63%

78%

85%

31%

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Laptop Smartphone eReader Tablet

Device penetration 2012-2017

2012 2013 2014 2015 2016 2017

Smartphone and tablet penetration has continued to increase. Laptop and eReaderpenetration has remained flat.

Q. Which, if any, of the following connected devices do you personally own or have ready access to?

Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2012, May - Jun 2013, May - Jun 2014, May - Jun 2015, May - Jun 2016, May - Jun 2017Base: All respondents aged 18-75 years, UK, 2012: 2,060, 2013: 4,020, 2014: 4,000, 2015: 4,000, 2016: 4,003, 2017: 4,002

6

91%

68%62% 61% 61%

57%51%

30%34%

11% 9%

0% 0% 1% 0% 5% 6% 1% 2% 2% 4% 5%

0%

20%

40%

60%

80%

100%

Smartphone Laptopcomputer

Largetablet:over

9 inches

Desktop/tower

computer

Fitnessband

Smartwatch

Smalltablet:

between7-9 inches

eReader Standardmobilephone

Portablegamesplayer

Virtualreality

headset

Frequency of usage by device

Last day Last week Last month Last three months Longer than three months ago Never

Smartphones are the most frequently used devices followed by laptops; some smart watches, fitness bands and VR headsets have never been used

Q. When was the last time you used each device? Was it within the…?

Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2017Base: All respondents aged 16-75 years, UK, 2017: Standard mobile phone: 759, Smartphone: 3,525, Small tablet 7-9 inch: 1,644, Large tablet over 9 inches: 1,581, Laptop computer: 3,264, Desktop/tower computer: 1,949, eReader: 1,249, Smart watch: 256, Fitness band: 638, Portable games player: 853, VR headset: 262

7

52%

75%71%

66%

49%

29%

85%

97%

92% 92%

86%

71%

10%

5%5%

7%

12%

19%

0%

5%

10%

15%

20%

25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

All ages 18-24 25-34 35-44 45-54 55+

Gro

wth

rate

Penetr

ation r

ate

Smartphone penetration (2012-2017) by age group with 5 year CAGR

2012 2017 5 Year CAGR

Smartphone ownership increased from 52% in 2012 to 85% of adults (18-75) in mid 2017

Q. Which, if any, of the following devices do you own or have ready access to?

Source: Deloitte Global Mobile Consumer Survey, UK edition, May - Jun 2014, May - Jun 2015, May - Jun 2016, May - Jun 2017Base: All respondents aged 18-75 years, UK, 2012/2017: 2,060/4,002, 18-24: 247/493, 25-34: 338/758, 35-44: 364/708, 45-54: 378/785, 55+: 733/1,258

8

5%

3%

5%

6%

4%

8%

5%

5%

11%

20%

27%

35%

4%

9%

21%

36%

6%

6%

4%

6%

5%

7%

7%

13%

23%

21%

23%

18%

4%

14%

15%

9%

9%

9%

9%

8%

12%

13%

15%

26%

18%

20%

17%

15%

7%

13%

10%

7%

78%

80%

80%

77%

77%

70%

71%

55%

46%

37%

32%

31%

84%

62%

53%

46%

Place or redeem a bet/gambling

Pay for a taxi

Pay for public transport

Pay for a product/service in-store

Pay for car parking

Interact with businesses via messenger apps

Make an online purchase of a service

Make reservations/bookings

Make an online purchase of a product

Read reviews about a product/service

Research a product/service

Browse shopping websites/apps

Transfer money to someone in different country

Transfer money to someone in your country

Other online banking transactions

Check bank balances

At least once a week At least once a month Less often Never Don't know

Among all shopping related activities, browsing a shopping website/app is the most popular.

Q. Which, if any, you ever use your phone to do, which you use at least once a month, which you use at least once a week and which you use at least once a day?

Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2017Base: All phone owners aged 16-75 years, UK, 2017: 3,931Note: At least once a week include those that use their phones for at least once a day.

Fin

ance

Shoppin

gPaym

ent

Oth

er

TMT Predictions 2017 9

5G: connectivity continues to advance

Significant tangible steps towards the launch of 5G will take place in 2017:

• >200 carriers are likely to be offering LTE-A across some of their network, and >20 should have LTE-A Pro networks by end of 2017

• Continual development of 5G standards will take place

• A few dozen of the 800 operators around the world are likely to be actively involved in trials or commercial deployment of services marketed as 5G

TMT Predictions 2017 10

TMT Predictions 2017 11

The great indoors: the final frontier for digital navigation

As of 2022 at least a quarter of all human and machine uses of precision digital navigation will include an indoor leg or be for an entirely indoor journey.

This compares to less than 5% of all uses in 2017.

TMT Predictions 2017 12

TMT Predictions 2017 13

0 - 10 cm

Up to 0.5m

Up to 1m

Up to 2m

Up to 5m

Up to 50m

(LTE, urban)

Ultrawideband LED lighting Beacons Magnetic

positioningWi-Fi Mobile

networks

Indoor navigation is likely to require a combination of different signals and other inputs, each with its own set of pros and cons

Installed for proximity marketing.

5G requires high density networks.

100 millions x including home

broadband routers

2m accuracy with multiple

inputs

TMT Predictions 2017 14

Prints Charming: Biometric security reaches the billion

The active base of fingerprint reader-equipped devices will top one billion for the first time in early 2017.

Each active sensor will be used an average of 30x per day, implying over 10 trillion aggregate presses globally over the year.

About 40% of all smartphones in developed countries will incorporate a fingerprint reader as of end-2017.

At least 80% of users with a fingerprint reader-equipped smartphone will use this sensor regularly.

TMT Predictions 2017 15

16

63%

21%

2% 2%#N/A 1%

3%

30%

67%

28%

2% 2%1% 0

2%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

PIN or password

authentication

Fingerprint

recognition

Voice

recognition

Facial

recognition

Eye/iris

recognition

Other biometric

recognition

Don't know None of these

Methods of authentications used among 18-75 year olds (2016 – 2017)

2016 2017

Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2017Base: All smartphone owners aged 18-75 years, UK, 2016: 3251, 2017: 3393

Usage of fingerprint recognition has continued to grow in the UK

Q. Which, if any, of the methods listed below have you used to identify yourself when unlocking your phone, authorising mobile payments or other transactions?

17

36%

57%

7%

Access to fingerprint-enabled phones

Yes, my mobile phone has a fingerprint reader

No, my mobile phone does not have a fingerprint reader

I don't know

Source: UK edition, Deloitte Global Mobile Consumer Survey, May - Jun 2017Base: All smartphone owners aged 16-75 years, UK, 2017: 3525

79% of respondents with a fingerprint-enabled phone use this functionality

Q. Does your mobile phone have a fingerprint reader? Which, if any, of the methods listed below have you used to identify yourself when unlocking your phone, authorising mobile payments or other transactions?

79%

21%

Finger print usage for authentication, authorisation of payments

Yes No

18

A third of respondents with a fingerprint sensor use the reader readers to authorise payments/purchases

96%

44%

35%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

To unlock my device To log in apps To authorise payments/purchases To authorise money transfers to

other people / organisations

Fingerprint reader usage

18

Source: UK edition, Deloitte Global Mobile Consumer Survey, May – Jun 2017Base: Respondents aged 16-75 years who use their fingerprint-enabled phone for authentication, UK, 2017: 1008

Q. How do you use your fingerprint reader?

TMT Predictions 2017 19

• Smartphones: the first decade

• 5G: a revolution in evolution

• Prints charming: biometric security reaches the

billions

• The great indoors: the final frontier for digital

navigation

www.Deloitte.co.uk/mobileuk

www.Deloitte.co.uk/tmtpredictions

The decade of invisible innovation

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