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Deloitte TMT Predictions 2013

LTE subscriber numbers to triple, ‘mobile’ advertising to grow by 50 percent, roll out of 4K HDTV

Deloitte also predicts PC usage to thrive, end of strong password-only security, existing broadcasters and distributors to dominate over-the-top services

Moscow, 20 February 2013 — A record one billion smartphones will be shipped in 2013, mobile advertising will get split into two categories— tablets and smartphones— and more than 90 percent of user-generated passwords will be vulnerable to hacking in a matter of seconds. This is according to the 12th edition of Deloitte Touche Tohmatsu Limited’s (DTTL) Technology, Media and Telecommunications (TMT) Predictions 2013 report released today. The TMT Predictions 2013 report also forecasts that broadcasters will continue to deliver the majority of Over- the- Top (OTT) services, and 4K televisions won’t disrupt the marketplace just yet.

“This year’s predictions cover a range of topics, from the continued dominance of personal computers (PCs) despite inferior sales relative to smart devices, the developments around Long Term Evolution (LTE), and data access, to smartphones and the vulnerability of passwords,” said Jolyon Baker, Managing Director, Global TMT Industry, DTTL. “With the splitting of ‘mobile’ advertising into separate mobile and tablet categories, advertisers should begin to consider new forms of advertising specific to smartphones, such as interactive videos or game functionality, and tablets meanwhile, may borrow content created for PCs as well as usage formerly undertaken on PCs.”

Olga Tabakova, Partner and TMT Leader of Deloitte’s member firm in the CIS commented: “This decade has seen unprecedented changes in the Telecommunications, Media and Technology sector, which are crucial for the development of the global economy. For this reason, Deloitte has been closely following the most important trends in the sector for the past 12 years. The average consumer’s decision on what tablet, PC or smartphone to purchase this year will have a huge effect, not only on the strategies of electronics manufacturers, but also on the advertising budgets of all companies engaged in the consumer sector. The speed, availability and security of data transmission remain key development areas for these industries, a huge part of whose work is based on information. In 2013, we will see further development of LTE-networks and “Smart TVs” that work on OTT technology and provide an ultra-High Definition broadcast (4K), and a lot of attention will be paid to data security.”

Additionally in 2013, the smartphone sector may generate $4.9 billion in revenues in 2013, while advertising on tables may generate $3.4 billion. Revenue per unit however reveals a different dynamic: smartphone display ad revenues are forecast at $7 per tablet and $0.60 per smartphone (including in-app ads).

There will also be an upsurge in momentum behind LTE, with 2013 being the first year in which LTE thrives across multiple markets. The subscriber base will triple to 200 million by year end, and those on LTE tariffs will represent about 10 percent of all service revenues. Usage of LTE will be evolutionary rather than revolutionary: the major benefits of subscribing to LTE from 3G are likely to be better performance from existing applications from e-mail to updating social networks.

Additional highlights of this year’s TMT predictions to impact the marketplace in 2013 include:

  • “Mobile advertising” thrives, led by tablets, but smartphone display lags — “Mobile” advertising — a category including tablets, smartphones and feature phones —should grow by 50 percent to reach $9-billion globally.
  • A billion smartphones should ship for the first time ever — Usage, however, will become increasingly varied, with a growing number of smartphones owners (about 400 million out of an installed base of 1.9 billion by year –end) rarely or never connected their devices to data.
  • The PC is not dead: It’s about usage not units — Of total sales of PCs, tablets and smartphones in 2013, PCs will be about one fifth. However more than 80 percent of Internet traffic measured in bits will continue to be generated on traditional personal computers (desktops and laptops). And of the total time spent at home and at work on PCs, tablets and smartphones combined, more than 70 percent will be on a PC.
  • 4K kicks off — 2013 will be the year in which the television industry starts preparing in earnest for the next iteration of high definition (HD) known as 4K, which offers four times the resolution of the current highest standard HD TV. The full roll-out of 4K will take years: in 2013, 4K will be in very few living rooms. There will be no 4K broadcasts in 2013, and there is little content so far. About 20 TV sets will be available to those wishing to spend $15,000 - $25,000 on a set.
  • Let’s get together: Crowdfunding portals bring in the bucks — Crowdfunding portals will raise $3-billion globally, a 100 percent increase over 2011.
  • Enterprise Social Networks (ESN): Another tool, but not yet a panacea — More than 90 percent of Fortune 500 companies will have selectively or fully implemented an ESN by the end of 2013, a 70 percent increase over 2011. Of those who register, only a third will read content once a week or more and just 40 percent will make an ESN post in the average month.
  • Bring your own computer: A tale of two interpretations — Very few additional companies will adopt a bring-your-own-computer (BYOC) policy where the employer pays for the PC. At the same time, 50 percent of Fortune 500 companies will allow employees to bring their own personally-owned and paid for computers.
  • The looming spectrum shortage: Worse before it gets better — The demand for wireless bandwidth continues to grow causing increased spectrum exhaustion— leading mainly to slower speeds, but sometimes an inability to access networks or dropped calls or data sessions.
  • All you can app: middle ground— Between 50 and 100 mobile operators will offer all-you-can-eat services with unlimited access to specific application— a middle ground between unrestricted all-you-can-eat tariffs and metered data charging.

Full details about the global TMT Predictions are available here: www.deloitte.com/Predictions2013.

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.

About Deloitte CIS

Deloitte CIS is one of the world’s foremost audit and consulting firms, offering audit, consulting, corporate finance, enterprise risk, and tax and legal services and leveraging the professional experience of approximately 3,000 employees in 16 offices spread across 10 countries in the region. Known as an employer of choice for its innovative human resources programmes, Deloitte is dedicated to helping its clients and people excel.

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