Deloitte TMT Predictions: 2013, the year of the device, roll out of 4K HDTV and LTE subscribers to triple
Deloitte also predicts PC usage to thrive, the end of strong password-only security, and existing broadcasters and distributorsDOWNLOAD
18 January 2013 — A record one billion smartphones will be shipped in 2013 which along with new TV sets, tablet adoption and 4G rollout will contribute to a looming spectrum and broadband shortage globally. Australia’s investment in the NBN puts it ahead of most other nations in the developed world – but only in broadband - according to Deloitte Australia’s lead Telecommunications Partner Stuart Johnston and lead Media Partner Clare Harding.
Launching the 12th edition of Deloitte’s Technology, Media and Telecommunications (TMT) Predictions 2013 report today, Stuart Johnston said that 2013 is likely to become known as the ‘Year of the Device’.
“Even though we predict global shipments of smartphones to exceed one billion this year, their usage will vary. Out of this growing number of smartphone owners, close to 2 billion by the end of the year, some 400 million will rarely or never connect their devices to data. This is an important consideration for those organisations developing a ‘mobile centric’ customer strategy,” he said.
“In addition, in Australia we anticipate the phablet (the phone/tablet combination) to become the uber cool device of 2013.”
Clare Harding added: “It’s the size of the screen that is driving the phablet appetite. A noticeable trend at the International Consumer Electronics Show 2013 in Las Vegas (CES) was the number of manufacturers releasing supersized smartphones or ‘phablets’. Typically they have 4.5 to 5.5 inch screens and provide a much richer experience than a smaller smartphone, yet without the inconvenience of a tablet.
“However, while the screen size is fine for passive viewing, creating a spreadsheet on a phablet or tablet is almost impossible!”
PC is not Dead
“To that end we predict that the PC is not dead,” said Johnston. “It is screen size and keyboards that are driving the vast majority of connected traffic. So although the share of connected device traffic from mobile devices is rising – so far companies around the world have purchased about 30 million tablets and we predict there will be almost 300 million tablet owners worldwide by the end of 2013 – it is paper they are replacing – not PCs. So even with very strong mobile growth predicted, the mobile device share of internet traffic will be no more that 15% worldwide by the end of 2013.”
Johnston said that in 2013 Deloitte anticipates that 80% of internet traffic measured in bits will come from PCs and that 70% of hours spent on computing devices will be spent on PCs.
Connected TVs and 4K kicks off
Still in the world of devices CES confirmed Deloitte’s prediction that the television industry will begin its roll out of the next generation of high definition (HD) TV sets known as 4K, offering four times higher resolution than current HD sets.
Clare Harding said: “Although we believe it will be another 18-36 months before the sets are commercially and broadcast-ready, the first consumers are already taking delivery of their new sets. Our Deloitte TMT Predictions Partner at CES this year said a good number of orders were being taken for the new 4K sets were sold at $25,000 each in the first couple of days of the show! We expect the early adoptees to be wealthy individuals, particularly gamers, and the big uptake is likely to be for live sports in 2015/2016.”
Harding added that Deloitte predicts that although tens of millions of connected TV sets will sell globally, it will be because of price, size, thinness or bezel width, rather than for their integrated two-way connectivity. “The bottom line is that unless ‘must-see’ content is made exclusive to connected TVs at a competitive price, the need for connectivity in televisions is likely to remain marginal.
“Broadcasters should keep track of the installed base of devices on which their content could be received and consumed when considering which services they should offer,” she said.
Over-the-top (OTT) may lift legacy broadcasters and distributors more than pure plays
Deloitte predicts that in 2013, in the markets where the services are available, two of the top three OTT TV program and movie services are likely to be provided by existing broadcasters and distributors. OTT services use the Internet to distribute TV and movie content to homes. Any company can provide OTT TV and movie services and many do so, including TV broadcasters, device manufacturers and fast food vendors.
“OTT is important, but what we are seeing in other countries is that it is not core to the way people are consuming TV and video content. If OTT services were suspended for a week, people would still watch television. What is core is content, and whichever entity has access to the most popular content is likely to have the most popular OTT site. We expect that legacy broadcasters will in fact get the most out of OTT,” Harding said, “as it is a natural and hopefully seamless extension of the already well-known brands of those broadcasters”
A strong year for LTE adoption
Deloitte predicts that 2013 will be a year of momentum for 4G with more than 200 operators in 75 countries expected to have launched LTE by the end of 2014. Stuart Johnston said: “LTE subscriptions should exceed 200 million – a 17 fold increase in just two years.
“We are likely to see lower prices initially to encourage use, but this won’t be sustainable. Despite LTE spectral efficiency, it will still cost carriers US$5 to US$10 to carry 1GB of data, sufficient for streaming one to two hours of HD video.” He explained the step from 3G to 4G is not the same as experienced from 2G to 3G. “4G is faster than 3G, but carriers will need to strike a balance between underwhelming and overselling when marketing to drive take-up.”
“When it comes to spectrum, Australia is in similar position to the rest of the world”, said Johnston. “We believe that the current spectrum shortage issues that are being experienced now will get worse before they get better.
“The most telling examples are occurring at peak events. At the London Olympics for instance, the mobile phone network cells that covered key locations on the Men’s Road Race course collapsed due to overload from the cell phones of the roadside spectators. The answer? At the Women’s Road Race a few days later, there were marshalls standing on the side of the road with signs asking people not to send images from their phones!”
Another example was at CES in Las Vegas last week where TXT messages were taking anywhere from 15 mins to 45 mins to be sent/received.
“An answer is a more efficient use of a limited spectrum,” said Johnston. “LTE for example is 16x more efficient that 3G when it comes to moving data. But demand is outstripping technology innovation. In the seven years it took to develop and deploy LTE, wireless traffic has increased 30 times.”
P@$$1234: the end of strong password-only security
Deloitte predicts that more than 90% of user-generated passwords will be vulnerable to hacking in a matter of seconds, and Johnston said: “As Smartphone adoption increases, and the value of data continues to grow, the incentive to hack has never been greater. For a long time, eight character passwords have been thought to be highly secure – for example with the 94 characters available on a standard keyboard, there are 6.1 quadrillion possible combinations. With this number, it would take a powerful 2011 computer about a year to try every variation!
“However, a number of human factors combine to significantly reduce the number of combinations people actually use. A recent study of six million passwords found that the 10,000 most common would have accessed 98.1% of accounts.”
Deloitte will release its global TMT Security Report survey results paper in February.
About the DTTL TMT Predictions
The TMT Predictions are based on worldwide research supported by in-depth interviews and input from Deloitte member firm clients, Deloitte alumni, industry analysts, leading TMT executives, and thousands of Deloitte member firm TMT practitioners across its global network.
The Deloitte TMT Predictions Report is available on the Deloitte website here www.deloitte.com/au/tmtpredictions
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Telecommunications Lead Partner Deloitte
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Media Lead Partner Deloitte
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0414 889 857
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