Introduction
In its 13th year, Deloitte's Technology, Media & Telecommunications (TMT) Predictions presents our view on the major trends that will impact UK businesses in 2014. Knowing what will come next in tech, media and telco trends has become a key competitive differentiator and can give your business a leading edge. Deloitte's predictions are based on hundreds of conversations with industry executives, and tens of thousands of online interviews with members of the public around the world. We have pulled out the top 10 predictions that we feel are most pertinent to UK businesses. But they’re not designed to be the last word – have your say #tmtpredictions
Developing the next generation
A key challenge for organisations in the TMT industry is how they should develop the next generation of young people, with the appropriate skills and interest, to work in the sector. We invited sixth form students from three Deloitte Access schools to present their responses to our TMT Predictions. Find out what they had to say.
One became many: the tablet market stratifies
Technology
The compact tablet, with an 8.5 inch or smaller screen, will become the predominant size of tablet. The surge in sales of compact tablets is driving a stratification of the tablet base, similar but more profound than that experienced in the smartphone market over the last two years. Aside from screen size, tablets are also diversifying by weight, processor speed, memory capacity and price.
Wearables: the eyes have it
Technology
Global revenues for smart glasses, fitness bands and watches should exceed £2 billion in 2014. The most successful category, smart glasses, are likely to be priced at about £300 and sell about 4 million units. People are used to wearing watches, but may be less keen to charge them on a daily basis, so we expect demand for smart watches to be two million units. The appeal of fitness bands may diminish if owners’ quantified exercise levels decline.
Massive Open Online Courses (MOOCs): not disruptive yet, but the future looks bright
Technology
Student registrations in Massive Open Online Courses (MOOCs) will be up to over 10 million courses, a 100% increase over 2012. The low completion rates mean that less than 0.2% of all tertiary education courses completed in 2014 will be MOOCs. By 2020, however, over 10% of all courses taken in tertiary and enterprise continuing education may be MOOCs.
Doubling up on pay TV
Media
By year-end 2014 between 50 and 100 million homes around the world will have access to, two or more separate pay TV subscriptions – generating about £3 billion in revenues.
Over the course of the coming years, the number of households with multiple subscriptions should continue to rise, as more content owners and aggregators, including platform owners such as cable and satellite providers, make their content portfolios available via subscription video-on-demand. A further stimulus to the market will be the increasing availability of inexpensive HDMI dongles, which connect TV sets to the Web.
Television measurement: for better and worse
Media
The measurement of television viewing should become more accurate in the UK, following the introduction of hybrid measurement, which integrates TV viewing on PCs, tablets and smartphones into overall viewing numbers. Accurate measurement is fundamental to the largest ad product in the world: TV advertising, worth £3.9 billion per annum in UK. Hybrid measurement is expected to increase viewing figures for younger age groups – which have the greatest tendency to watch online – by 5%.
Broadcast sports rights: premium plus
Media
The value of premium sports broadcast rights worldwide will increase to about £16 billion, a 14% rise, or £1.9 billion increase on 2013. The double digit growth compares to average growth of 5% between 2009 and 2013, and is likely to exceed forecast increases in global pay TV revenues for 2014. About three quarters of all premium broadcast rights fees will be generated by 10 competitions, including the English Premier League.
Performance rights lift recorded music revenues
Media
Revenues from performance rights, a license payable for music played in public, should exceed £600 million for the first time. This may seem insignificant relative to smartphone sales or apps revenues, but for the £10 billion recorded music industry, this is material. The UK public listens to billions of music tracks every year on TV, in the hairdresser, in dance classes and elsewhere: in 2014 the global daily license fee for use of music in public will be about £2 million.
Short messaging services versus instant messaging: value versus volume
Telecommunications
Deloitte predicts that in 2014 Instant Messaging (IM) services on mobile phones will carry more than twice the volume (50 billion versus 21 billion per day) of messages sent via SMS globally. In UK, approximately 300 billion IMs are expected to be sent in 2014, more than double than the volume of SMSs expected to be sent (140 billion). It might be supposed that the growth in IM is at the expense of SMS. However despite the burgeoning volumes of messages carried over IM platforms, we expect SMS to generate more than £60 billion in 2014 globally, approximately 50 times all revenues from mobile IM services.
Rugged devices at £200: reinventing the business case for mobile field force
Telecommunications
The entry price for a ruggedised, connected data device that can be used by field force workers to undertake tasks such as car rental check-in inspections, delivering packages or inspecting motorways, should fall to under £200. The main driver will be a shift in approach, from sourcing data devices that are built to be rugged, to purchasing a standard consumer smartphone or tablet with a sufficiently toughened screen, and further protecting it by adding a rugged case.
The smartphone generation gap: Over 55? There’s no app for that
Telecommunications
The over-55s will experience the fastest year-on-year rises in smartphone penetration. Smartphone ownership should increase to about 50% by year-end, a 25% increase from 2013, but trailing 70% penetration among 18-54s. The difference in smartphone penetration by age will disappear, but differences in usage of smartphones remain substantial. Many over 55s use smartphones like feature phones.