TMT predictions 2014 : les tendances de demain dans le numérique.

TMT Predictions 2014
Advance. Intelligence.

Février 2014

TMT Predictions was first published in 2001

1

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TMT Predictions methodology
8,000 specialists in
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and consulting

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and financial
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Deloitte TMT
Research

Macroeconomic
research

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ns with industry
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Discussions with
clients around the
world

2



Special thanks to Ipsos Reid!
Our exclusive partner and sponsor of Canadian public opinion data!

Steve Levy

3

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
Mary Beth Barbour
survey was administered in English
and French)
– The study was in field between
December 5th and 9th, 2013



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

4



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

Legend
Didn’t come true
as we predicted

6

Came true, but less than
we predicted. At least so far


Came true exactly as
much as we predicted


7



8



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

Legend
Didn’t come true
as we predicted

9





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

Legend
Didn’t come true
as we predicted

10





Total prediction accuracy
100%
90%
80%

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

2008
11

2009


2010

2011

2012

2013


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

Sales

Mass market
20% of
total sales

Niche market
80% of
total sales

The long tail:
Less loved items
and products
The body:
Bestsellers
and
blockbusters
Number of items

Une grande niche

14



15



16



Smartglasses
17



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

18



Smartglasses
for
smartworkers

19



Is it time for smartwatches?

20



We have had the decade of the device

21



The decade of the device
$900
$800
$700

Billions

$600
$500
$400
$300
$200
$100

PCs

22


Smartphones

Gaming consoles

TVs

18E

17E

16E

15E

14E

13P

12A

11A

10A

09A

08A

07A

06A

05A

04A

03A

02A

01A

00A

99A

$0

Tablets


Smartphone replacement cycles are getting
longer

Handset replacement cycle in months

25
24
23
22
21
20
19
18
2007

2008

2009

2010

2011

2012

2013e

2014e

Source: US data, Recon Analytics, BI Intelligence

23



5 year trailing CAGR
14%

12%

10%

8%

6%

4%

2%

0%
03A 04A 05A 06A 07A 08A 09A 10A 11A 12A 13P 14E 15E 16E 17E 18E
24



Less money for
hardware means
more money for…

25



U.S. consumer electronic sales as a percent of global sales
of PCs, smartphones, tablets, TVs and game consoles
50%
45%
40%
35%

30%
25%
20%
15%
10%
5%
0%
2004
26

2005

2006


2007

2008

2009

2010

2011

2012 2013P 2014E

Global smartphone sales

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.

5.0 - 6.9 inches - phablets
<5.0 inches

27



Phablet ownership breakdown
6.0” to 6.9”
5.1” to 5.9”

100%

90%

5.0” to 5.1”

100%

80%

90%
70%
80%

100%

60%

90%

70%
50%

80%
70%

60%

67%

40%

50%

60%
50%
40%

30%

30%

20%

20%

30%

40%

23%

20%

10%

10%

10%

10%

28



“only” 25%

29



After seeing TMT Predictions, how likely are you to
spend more money with Deloitte? (normal distribution)
60%
50%

40%
30%
20%
10%
0%

Very likely

30

Somewhat
likely


Neither likely
nor unlikely

Somewhat
unlikely

Very unlikely


Thinking about your next mobile device, how likely
are you to purchase a phablet?
(55+ only, n=351)
60%
50%
40%
30%
20%
10%
0%
Very likely

31

Somewhat
likely


Neither likely
nor unlikely

Somewhat
unlikely

I'd rather be
attacked by
weasels
(fouines)


Phablet intent to purchase as next
mobile device
70%

Likely (T2B)
Very Unlikely (BB)

60%

50%

46%

40%
30%
20%

16%
Overall

10%

(n=1,032)

0%
18-34
n=184
32

35-54
n=230


55+
n=129

Phablet intent to purchase as next
mobile device (cont’d)
60%
Likely (T2B)
Unlikely (BB)

50%

46%
40%
30%
20%

16%
Overall

10%

(n=1,032)

0%

<HS
n=72
33


HS

Post Sec

n=245

n=476

Univ Grad
n=239

Remember the mass-niche?
$900
$800
$700

Billions

$600
$500
$400
$300
$200
$100

PCs

34


Smartphones

Gaming consoles

TVs

Tablets


18E

17E

16E

15E

14E

13P

12A

11A

10A

09A

08A

07A

06A

05A

04A

03A

02A

01A

00A

99A

$0

APEJ portable PC, tablet and phablet shipments,
2011 Q4-2013Q2
Unit Shipments
24 M

21 M

18 M

15 M

12 M

9M

6M

3M

0M
4Q11

1Q12

2Q12

Portable PC

35


3Q12

Tablet

4Q12

1Q13

2Q13

Phablet


36



Proportion of phablet owners having a smaller
smartphone too
Singapore
South Korea
Spain
Japan
UK
United States
Netherlands
France
Germany
0%

10%

20%

30%

40%

50%

60%

70%

80%

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
37



38



39



40



Never downloaded even one app (Developed Countries)
40%
29%

30%

22%
16%

20%
8%

7%

18-24

10%

25-34

11%

0%
35-44

45-54

55-64

65+

IM usage (Developed Countries)
60%

56%

54%
45%

45%

39%
32%
25%

30%
15%
0%
18-24

25-34

35-44

45-54

55-64

65+

Social Networking (Developed Countries) − Smartphone owners
80%

75%
66%

60%

51%

44%
35%

40%

28%

20%
0%
18-24
41

25-34


35-44

45-54

55-64

65+

42



Light space suit, appropriate
for +130º C temperatures

43



44



Hours of traditional TV watched per week by all
Canadians aged 2+
30

27,6

26,7

27,3

2012/13

2013/14

25

20
15
10
5

0
2011/12

45



0–20% Quintile – average hours per week
8

7,5

7,6

7,5

7,6
7,1

Average Hours per Week

7

7,1

6,9

6,8

7,1

7,0

6,6

6
Adjusted to compare to PPM data

5,8

5,9

5
4,9
4

4,1

3,8

3

3,6

4,6

4,3
3,9

3,4

3,1

2
1

0
2004

2005

2006

2007

2008

Total TV Eng (0-20%)

2009

2010

2011

2012

2013A 2014E

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

46



80–100% Quintile – average hours per week
65
63
62,3

Average Hours per Week

61
59

60,6

58,1
57,1

57

54,9

56,7

57,0

54,5

53,9

55,2

62,0

58,0

59,3

52,1

53
Adjusted to compare to PPM data

51
49

60,3
55,9

56,1

62,0
61,1

55,9

55

62,5

50,9

47
45
2004

2005

2006

2007

2008

Total TV Eng (80-100%)

2009

2010

2011

2012

2013A 2014E

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

47



The reality
Number of Canadian homes that subscribe to any of cable, telco or
satellite pay TV service (millions)
14
12

11,8

11,8

11,8

10
10,873 homes
cut the cord as of
September 30,
2013

8
6
4
2
0
2012
48


2013

2014

Canadians who are currently subscribing to
video subscription service (i.e. Netflix) or are in
first free month
35%
30%
25%
20%
15%
10%
5%
0%
BC

49

AB


SK/MB

ONT

PQ

ATL


Credit: Keytrends Report 2014, @CMF_Trends
50



US TV viewing in homes with internet
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

52


0%


53



The reality
Number of Canadian homes that subscribe to any of cable, telco or
satellite pay TV service (millions)
14
12

11,8

11,8

11,8

10
10,873 homes
cut the cord as of
September 30,
2013

8
6
4
2
0
2012
54


2013

2014

We’re not cutting TV cords, we’re stacking them
Canadian households with at least one monthly pay TV subscription
service (millions)
12
10

8
6
4
2
0
2011
One sub
55


2014
Two subs

Two plus

Canadians who currently subscribe to a video
subscription service (i.e. Netflix) or are in the
free first month
40%
35%
30%
25%

19%

20%

Overall

15%

(n=1,032)

10%
5%
0%
18-34
n=244
56


35-54
n=437

55+
n=351

Male
n=454

Female
n=578

57



Video subscription services (i.e. Netflix)
Current Subs/First Month

30%

Former Subs

25%

19%

20%

Overall

15%

(n=1,032)

10%

7%

5%
0%

<HS
n=72
58


HS
n=245

Post Sec
n=476

Univ Grad
n=239

59



60



61



62



63



64



Aussi en France!

65



66



67



Only completions count!
Global tertiary courses completed 2014

100 million FTEs
@ ten courses
per year

Traditional Education
68


MOOCs

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

69



“The perfect storm”
Technology and
networks have
changed

Pedagogy has
changed

Push vs. pull has changed
(Learn what you want,
when you want)

Skills half life and
retraining have
changed

Data and analytics has
changed…to real time and
granular

Government ability
to pay has changed

70

Student ability to pay has
changed

Cross-subsidization will
need to change!



71



TMT Predictions tailored events

Duncan Stewart can deliver a
presentation for your office/industry.
• Email Duncan: dunstewart@deloitte.ca
• Follow me on Twitter: @dunstewart

• Connect on LinkedIn
• Subscribe to me on Facebook

Q&A Session

73



TMT predictions 2014 : les tendances de demain dans le numérique.

TMT predictions 2014 : les tendances de demain dans le numérique.

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