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Deloitte analysis of the top global telecommunications trends for 2012

The $100 ‘smartphone’ to reach its first half billion in 2012


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24 January 2012: National Australia TMT leader Damien Tampling launched the Deloitte global Technology, Media and Telecommunications (TMT) report for the telecommunications sector in 2012, which predicts the $100 “smartphone” reaches its first half billion.

The five top telecommunications trends that Deloitte anticipates to be likely to have significant medium to long term effects in the Technology, Media and Telecommunication and other industries in 2012 are:

  1. The $100 “smartphone” reaches its first half billion
  2. Near Field Communications and mobile devices: payments and more!
  3. So many apps – so little to download
  4. Web Bypass: delivering connectivity without the Internet
  5. Here come more data caps: it’s the end of the (wire) line for unlimited Internet.

The $100 “smartphone” reaches its first half billion

“More than half a billion low-cost smartphones – that is phones costing less than $100 - will be in use by the end of 2012, according to our Deloitte TMT research,” said Tampling.  “Demand for basic handsets with computer-like functions is driving this growing market with the biggest opportunity in emerging markets where internet access is low, but the desire for communication and information services is growing.

“This will put pressure on the supply chain to cut the price of components, but it will also present a challenge for app developers as low-cost smartphone owners are less likely to want to pay for downloads. A key upgrade in the phone in 2012 will be the incorporation of Wi-Fi as a standard part of the feature set,” Tampling said.

“The phones are likely to support email and instant messaging, as well as feature a selection of pre-loaded apps and widgets including a Web browser that works best with mobile specific sites and apps. It will also be likely to include a basic camera.

“This market will be highly competitive,” said Tampling. “The handsets that start the year as market-leading may well trail towards the end of the year. There will also be constant pressure on pricing in the supply chain, giving component suppliers from emerging markets an opportunity to break into the market.  

“As well as constant review from handset vendors, operators will also need to be careful how they price data. They must keep pace with the consumer’s ability to pay, or risk causing them to shy away from all future data services.”

NFC and mobile devices: payments and more!

The rise in the number of the devices with embedded near-field communications technology is set to soar to around 300 million by the end of 2013.

“NFC - the transfer of small amounts of data over a very short distance - has been dominated by the ‘wave and pay’ notion of embedding a credit card into a mobile phone,” said Tampling.”

When launching its "wave and go" mobile payment system for the iPhone Kaching, the Commonwealth Bank estimated there are currently around 42,000 NFC readers rolled out in Australian retail merchant premises. The bank also said that chip makers around the world were sitting on orders for half-a-billion NFC chips destined for handsets.

“However, even if 2012 turns out to be no more than a “transitional year” for mobile payments, the NFC chips will not go to waste. As more than 200 million, NFC-enabled mobile devices are deployed in 2012, it is worth noting than in addition to vast market potential for payments, there are thousands of applications of NFC - from gambling, to gaming to healthcare - that could build up a head of steam over the course of the year,” Tampling said.

“NFC will however take some time in Australia due to a number of factors including the relative market potential here vs other larger overseas markets and the complex collaboration that is needed between telcos, banks and device manufacturers for a clear path forward. Any lack of interest or motivation to get moving will however only provide a longer window for other innovative payment technologies to emerge, for example payment systems that use social media and operate across industry and borders, making the development of an appropriate legislative regime very difficult.”

So many apps - so little to download

“The number of apps available worldwide surged through the one million mark in December 2011 and will likely double again by the end of 2012. However the proportion that are paid for, remains small,” Tampling pointed out. “Only 20 per cent are downloaded more than 1,000 times and only a tiny proportion of un-promoted apps will ever become successful.

“As the multi-tablet phenomenon gains momentum, the opportunity is also there for the development of more B2B apps. To date, most of the apps purchased have been B2C, and the majority in fact games etc. But there is a real opportunity as tablets become more prevalent in the work place for more B2B application development – be that apps for employee time sheets, logging stores enquiries, transfers or special orders through to customer relationship management matters.

“The demands on the developer are also increasing as the variety of smartphones and tablets increases. To reach a global target market, a developer may have to make 50+ different variants which has all-but called time on the part-time app developer. With so much choice on offer, app-store providers should consider ways to improve and assure the quality of the products on offer. Stores should look to differentiate by considering subscription models focused on different genres, or selected by editors, that would create ‘app bundles’,” Tampling said.

Please download the full media release below.

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Contacts

Name:
Louise Denver
Company:
Deloitte
Job Title:
Director, Corporate Affairs & Communications
Phone:
Tel: + 61 2 9322 7615, +61 4 1488 9857
Email
ldenver@deloitte.com.au
Name:
Damien Tampling
Company:
Deloitte Australia
Job Title:
Partner, Corporate Finance
Phone:
Tel: +61 2 9322 5890, Mobile: +61 409 100 905
Email
dtampling@deloitte.com.au

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