Contact: Jo Ouvry
Deloitte
Public Relations
+44 (0) 20 7303 0587
The Technology, Media and Telecommunications (TMT) practice at Deloitte today announced its predictions for the technology industry in 2006, forecasting that the year ahead will be driven by rapid changes across all aspects of the sector, particularly the Internet.
David Tansley, technology partner at Deloitte comments: “The ever expanding mass of digital information (which will reach 20 exabytes in 2006) will see consumers’ use of the Internet change to a greater reliance on search. In parallel, governments will try to iron out some of the legal and regulatory disparities between what has previously been allowed in business conducted over the Internet and its 'real world’ equivalent.”
“There will increasing collaboration in R&D, as businesses, research institutes, government laboratories and academic institutions work more closely together in order to spread the costs of ever rising investments. Global R&D spending is expected to reach $1 trillion in 2006, and companies will want to share the burden with others.
“Alongside this there will be a growing reliance on offshoring as a means of minimising costs and increasing efficiency. In some cases this will be a pre-requisite for survival. However offshoring will not only be considered because of low costs, but also as a ‘talent search’ for the best employees, wherever they may be.
“2006 will see open source ramp up its challenge to the established software business model, impacting both software providers as well as end-users. This is likely to have an impact on traditional charging models for software, as well as potentially lower quality products for users.
“The interface between man and machine should improve this year as a result of advances in processing and storage, with speech recognition likely to be an increasingly used tool. In parallel, 2006 will see a widening range of devices – from cameras to cars – having the ability and connectivity to be upgraded and maintained remotely. However, the divide between those having digital technology and those who do not is likely to widen on several axes in the coming year, having a serious and negative impact of those developing countries unable to afford to compete in the technology race.”
Three key trends identified in the report are:
1. Search challenges email as the leading digital application
Search will displace email as the most used digital application in 2006 owing to rising functionality, the sheer mass of searchable data and higher speed connectivity. 2006 will see the expansion of search to devices other than the PC, such as mobile phones, digital cameras and personal video recorders. The sector is currently dominated by English-speaking companies, but will become more global in 2006, leading to a surge in non-romance language searches. The search sector should concentrate on developing more intuitive search-engine user interfaces to appeal to the many people still daunted by Boolean logic.
2. The digital divide deepens
The gap between those who have digital technology and those who do not is likely to deepen during 2006. The divide will likely continue to be most noticeable between developed and developing countries, as citizens of poorer nations become increasingly disadvantaged by their lack of access to the media, the Internet, electronic communications and to information in general. Inability to afford lower cost services and products will mean that poorer households are likely to lack a computer and connectivity. Those who grow up without a computer and connectivity are likely to lack the technology skills required to compete for the best jobs. These two trends will serve to widen the gap between haves and have nots.
3. The Internet loses its amateur status
In 2006, governments around the world will likely try to lessen some of the disparities between what happens on the Internet and what is allowed elsewhere. This will reflect the fact that the Internet has evolved from being an essentially amateur body into a largely self-interested, commercial infrastructure generating billions of dollars of revenue every year. Some governments may move to tax Voice over Internet Protocol (VoIP) services in the same manner as traditional Public Switched telephone Network (PSTN); others may attempt to enforce restrictions on advertising content and targets for online commercials; many more may move to crack down on counterfeiting and IP theft – as the virtual world finds itself having to deal with the realities and regulations of the real world.
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Notes to editors
Predictions methodology
These predictions have been compiled by Deloitte Research on behalf of Deloitte Touche Tohmatsu’s (DTT) Technology, Media and Telecommunications (TMT) Group. The major inputs used in writing the predictions were: input from the 5000-strong TMT team around the world, discussions with leading industry and financial analysts, interaction and conversations with clients from the telecommunications and related sectors. These predictions do not claim to be fully comprehensive, but rather provide a commentary on major industry trends and developments.
About DTT’s TMT Group
The TMT Group is composed of service professionals who have a wealth of experience serving technology, media and telecommunications companies throughout the world in areas including cable, communications providers, computers and peripherals, entertainment, media and publishing, networking, semiconductors, software, wireless, and related industries. These specialists understand the challenges that these companies face throughout all stages of their business growth cycle and are committed to helping them succeed. DTT is a leader in providing strategic, financial and operational assistance to its TMT clients.
About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services through more than 9,000 people in 21 locations. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and its people excel. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s acts or omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.
