Three Consumer Market Trends that are Impacting Telecom Industry (2014)

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Three Consumer Market Trends that are Impacting Telecom Industry (2014)

  1. 1. COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Marc Jadoul May 2014 THREE CONSUMER MARKET TRENDS THAT ARE IMPACTING TELECOM INDUSTRY
  2. 2. WHILE HUGELY POPULAR, THE LINEAR TV CHANNEL MODEL IS RIPE FOR REPLACEMENT. THE TREND HAS BEEN THAT MOBILE WAS WINNING. IT'S NOW WON. IN ABOUT TEN YEARS WE MAY FIND OURSELVES WITH MAYBE TEN OF THESE DEVICES ON OUR BODY.
  3. 3. 3 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE TREND HAS BEEN THAT MOBILE WAS WINNING. IT'S NOW WON. Eric Schmidt Executive Chairman, Google Source: http://mashable.com/2013/12/30/eric-schmidt-predictions-2014 3 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED.
  4. 4. 4 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. MASLOW’S HIERARCHY REDEFINED Source: http://www.simplypsychology.org/maslow.html PSYCHOLOGICAL food, water, shelter, warmth, … SAFETY security, stability, safety BELONGINGNESS & LOVE intimate relationships, friends SELF-ESTEEM prestige & feeling of accomplishment SELF- ACTUALIZATION achieving one’s full potential& creativity
  5. 5. 5 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. MOBILE DATA TRAFFIC KEEPS GROWING Browsing Music Video Games & Apps Other 2013 2014 2015 2016 20172012 5,326 PB 21,500 PB Source: Strategy Analytics, Handset Data Traffic (2013)
  6. 6. 6 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. DEMAND FOR (DENSE) WIRELESS ACCESS IN PUBLIC PLACES IS RISING Sports stadium Train/bus station Airport Office Hospital Shopping mall Convention center High street School Hotel Supermarket Retail shop Multi Dweller Units House 0.0 0.1 0.2 0.3 0.4 0.5 0.6 Average Mb/s per 10m2 Source: Ruckus Wireless (2012)
  7. 7. 7 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. EVEN WITHIN THE HOME, MOBILE MULTIMEDIA IS BECOMING PERVASIVE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 2015 2016 2017 Outdoor mobile data usage Indoor mobile data usage 70% 80% 90% 100% iPad iPhone Blackberry % OF USE INDOORS Source: Mobile Experts (2012), GigaOM (2012)
  8. 8. 8 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. SMARTPHONE AND TABLET VERSUS… EVERYTHING ELSE Source: The Nielsen Company, 2012 25% 64% 10% 21% 65% 13% 25% 56% 11% 14% 72% 11% 3% 16% 64% 18% 26% 49% 22% 3% 12% 60% 25% 16% 56% 24% 3% 22% 50% 23% 13% 55% 30% 9% 56% 32% 3% Internet Connected TV Smart Phone Internet to TV Player GPS Gaming Console Portable Gaming Console Portable Media Player eBook NetBook Laptop PC Desktop PC TABLETS ENHANCE THESE DEVICES TABLETS REPLACE THESE DEVICES Use device moreDon’t use device Use device less Same device usage
  9. 9. 9 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. SMARTPHONES AND TABLETS TEND TO PLAY DIFFERENT ROLES 67% 65% 53% 31% 74% 68% 51% 49% 75% 74% 65% 60% 58% 34% 22% 20% Living room Bedroom Kitchen Home office While traveling Car Public trarnsport Daily commute Restaurant Friend’s house Outdoors Work Other Library School In stores Where do you access the internet on your SMARTPHONE ? 72% 63% 40% 26% 48% 18% 15% 9% 30% 28% 26% 20% 14% 12% 10% 8% Living room Bedroom Kitchen Home office While traveling Car Public transport Daily commute Restaurant Friend’s house In stores Where do you access the internet on your TABLET? Outdoors Work Other Library School Source: Forrester Research (2013)
  10. 10. 10 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NEED FOR DIFFERENT ‘MIXES’ OF MOBILITY, CAPACITY AND COVERAGE Macro coverage Small cells & Wi-Fi Mainly low bandwidth services Often high bandwidth services Full mobility Nomadic usage
  11. 11. 11 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. NOMADIC VIDEO IS SOARING WITH A 73% CAGR 200,000 160,000 120,000 80,000 40,000 0 180,000 140,000 100,000 60,000 20,000 2010 2011 2012 2013 2014 2015 Home video users (premium content) Nomadic video users (premium content) Mobile video users (premium content) Source: The NPD Group (US, 2011)
  12. 12. 13 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. DEFINING THE IDEAL NETWORK FOR WIRELESS NOMADS a wireless HetNet mixing 3G/4G macro cells, small cells and Wi-Fi automatic network discovery, selection and authentication, with seamless handover between cellular and Wi-Fi access a high-capacity, fiber-based mobile backhaul and transport network
  13. 13. 14 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED.COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. 14 Source: http://www.dezeen.com/2014/03/10/interview-fitbit-designer-gadi-amit-wearable-technology/ IN ABOUT TEN YEARS WE MAY FIND OURSELVES WITH MAYBE TEN OF THESE DEVICES ON OUR BODY, OR MAYBE WOVEN INTO OUR CLOTHES, MAYBE EVEN UNDER OUR SKIN. Gadi Amit Designer, Fitbit Activity Tracker
  14. 14. 15 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. SENSORS AND ACTUATORS EVERYWHERE (*) Sensors in the Nike+ Fuelband: 3-axis accelerometer, ambient light sensor; (**) Sensors in the Samsung Galaxy S4: accellerometer, barometer, geomagnetic sensor, gesture sensor, Hall sensor, gyroscope, proximity, RGB light, temperature/humidity; (***) Sensors in today’s cars: air–fuel ratio, blind spot monitor, crankshaft position, curb feeler, defect detector, engine coolant temperature, Hall effect sensor, manifold absolute pressure, mass flow, oxygen, parking sensors, radar gun detector, speed, throttle position, tire-pressure, torque, transmission fluid temperature, turbine speed, variable reluctance, water-in-fuel, water-on-windshield, wheel speed, etc. 9 ** FUEL2 * 100+ ***
  15. 15. 16 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE NEXT STEP IN INTERNET EVOLUTION Pre- internet Internet of CONTENT Internet of SERVICES Internet of PEOPLE Internet of THINGS SOCIAL WEB WEB 2.0WWWH2H M2M + + + +
  16. 16. 17 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE “INTERNET OF THINGS” IS COMING AND IT’S GONNA BE BIG (NO… HUGE) $8.9 TRILLION GLOBAL REVENUES BY 2020 212 BILLION “THINGS” IN 2020 Source: IDC 2013, http://enterpriseinnovation.net/article/idc-internet-things-poised-change-everything-1713674431
  17. 17. 18 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WEARABLE TECHNOLOGY ON THE GO Sources: http://www.policymic.com/articles/65371/galaxy-gear-watch-could-be-a-goldmine-for-advertisers http://mashable.com/2013/11/17/taptap-wristband-communication-relationships
  18. 18. 19 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. DIGITAL LIFE IN THE CONNECTED HOME Source: http://www.lgnewsroom.com/ces2012/view.php?product_code=95&product_type=95&post_index=1828
  19. 19. 20 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. CONNECTED CARS SOON AN EVERYDAY REALITY Source: http://reviews.cnet.com/8301-13970_7-57570801-78/at-t-general-motors-to-sell-4g-lte-connected-cars-next-year € 45,000 € 40,000 € 35,000 € 30,000 € 25,000 € 20,000 € 15,000 € 10,000 € 5,000 € 0 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E (millions) IN-VEHICLE SERVICES HARDWARE TELEMATICS SERVICE PROVIDERS TELECOM SERVICE PROVIDERS
  20. 20. 21 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WHY THIS IS HAPPENING RIGHT NOW IoT
  21. 21. 22 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. SOME CHALLENGES RELATED TO THE IOT SCALABILITY PERFORMANCE MANAGEABILITY INTEROPERABILITY SECURITY MONETIZATION HORIZONTALIZATION VERTICALIZATION PARTNERING INNOVATION REGULATION GLOBALIZATION GOVERNANCE IDENTITY PRIVACY TECHNOLOGY BUSINESS SOCIETY
  22. 22. 23 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WHILE HUGELY POPULAR, THE LINEAR TV CHANNEL MODEL IS RIPE FOR REPLACEMENT. Reed Hastings Netflix CEO Source: http://qz.com/203192/the-track-changes-version-of-netflixs-vision-for-the-future-of-tv/ COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED.
  23. 23. 24 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WHICH ONE OF THESE WOULD YOU MISS DOING THE MOST? TOP-5 MENTIONS AMONG ADULTS Source: Business Insider (May 2014) 42% 13% 32% 34% 48% 58% 68% 69% 22% 47% 36% 26% 17% 7% 2% 15% 18% 15% 20% 15% 14% 11% 3% 7% 4% 4% 8% 7% 8% 12% 13% 2% 2% 4% 3% 9% TOTAL Aged 16-24 Aged 25-34 Aged 35-44 Aged 45-54 Aged 55-64 Aged 65-74 Aged 75+ Read newspapers/ magazines Listen to the radio Go online Use a smartphone Watch television
  24. 24. 25 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. TV VIEWERS ARE LOOKING FOR A MORE FLEXIBLE VIDEO EXPERIENCE Device flexibility Location flexibility Interaction flexibility Schedule flexibility Content flexibility Plan flexibility ?
  25. 25. 26 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE VIDEO DELIVERY MODEL IS SHIFTING Sources: Bell Labs, 2012 4.8 HOURS PER DAY 7.0 HOURS PER DAY 2012 2020 PayTV linear PayTV VOD Video comm Cloud video OTT video
  26. 26. 27 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ONLINE VIDEO TRAFFIC WILL HAVE AN ENORMOUS IMPACT ON NETWORKS Source: Bell Labs, 2012 0 20,000 40,000 60,000 80,000 100,000 2012 2013 2014 2015 2016 2017 Linear TV - Multicast Managed VoD - Unicast OTT Video - Unicast Average traffic at Tier 2 CO UNICAST TRAFFIC DOMINATES NETWORK BANDWIDTH MULTICAST TRAFFIC HAS MINIMAL IMPACT Mbps
  27. 27. 28 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE YOUNGER THE VIEWER, THE MORE THEY WATCH ONLINE TV MILLENIALS Source: The New York Times, 2013 GEN X BOOMERS No TVMostly online videoTV + online videoMostly TV
  28. 28. 29 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. HOW MUCH BANDWIDTH DOES AN AVERAGE HOUSEHOLD USE? ~45 Mbps Father watching with friend a soccer match in HD on large flat screen TV Mother watching an HD movie on regular TV screen Daughter watching an HD video on her tablet In the background, two HD videos being recorded Son starting an online streamed multiplayer video game 10Mbps 8Mbps 8Mbps 1-2Mbps 2x8Mbps
  29. 29. 30 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. BUT… 10 YEARS FROM NOW, HALF OF NORTH AMERICAN HOUSEHOLDS MAY ALREADY BE ON 4K TV Source: ABI research, BI Intelligence, March 2014 0% 25% 50% 75% 100% 2012 2017 2022 2027 2030 NETFLIX HAS ANNOUNCED THAT MORE 4K ULTRA HD CONTENT IS COMING TO ITS VIDEO LIBRARY. THE HEVC COMPRESSION FORMAT OFFERS A BITRATE OF JUST OVER 15 MBPS. 20242014
  30. 30. 31 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. DVR FUNCTIONALITY IS SLOWLY MIGRATING FROM THE SET TOP BOX TO THE CLOUD 2013 2017 Source: SNL Financial LC, 2014 STB-based DVR HHs Network DVR HHs Cloud DVR HHs BY END 2017, TRADITIONAL SESTBBASED DVR HOUSEHOLDS STILL DOMINATE, BUT NETWORK AND CLOUD DVR HOUSEHOLDS WILL HAVE GROWN TO 13%
  31. 31. 32 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WITH MORE OTT COMPETITION, PAY TV PROVIDER VOD GETS UNDERUSED HOW MANY VOD PURCHASES DOES YOUR HOUSEHOLD MAKE ON AVERAGE, EACH MONTH, FROM YOUR PAY TV PROVIDER? Source: Digitalsmiths, Q2-2013 Video Discovery Trends Report (US & Canada) ZERO ONE TWO 5.6% 73.8% 11.2%
  32. 32. 33 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. WHY DO CONSUMERS PREFER OTT ALTERNATIVES TO TV PROVIDER VOD? Source: Digitalsmiths, Q2-2013 Video Discovery Trends Report (US & Canada) Ability to watch on smartphone Ability to watch on tablet Easier to find content Don't have VOD Better selection Convenience Cheaper Other
  33. 33. 34 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. THE FUTURE OF TV Personalized; understanding a viewer’s purpose/need in the moment; social, interactive, profile and context-based. Broader choice of content; linear, on-demand and OTT. Multi-screen with a seamless CX; cross device search & discover functions. Cloud-based VOD and DVR; ultra HD and 4K TV are coming.
  34. 34. 35 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Michel Combes CEO Alcatel-Lucent INNOVATION IS HAPPENING EVERYWHERE — IN THE APPLICATIONS, IN THE CLOUD AND CERTAINLY STILL IN THE NETWORK WHETHER IT IS VIRTUALIZED OR NOT — IT IS EXCITING TO BE A PART OF MAKING THAT HAPPEN. 35 COPYRIGHT © 2014 ALCATEL-LUCENT. ALL RIGHTS RESERVED. Source: htttp://broadbandworldforum.com/interview-with-michel-combes-ceo-alcatel-lucent/
  35. 35. marc.jadoul@alcatel-lucent.com www.linkedin.com/in/mjadoul @mjadoul

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