Deloitte Global TMT Predictions 2019

• Smart speakers installed base projected to surpass 250 million units by year-end.
• 5G networks will burst onto the scene in 2019, and by 2020, around 50 operators will offer this service.
• In 2019, among companies using AI, 70 per cent will obtain these capabilities through the cloud.
• In the US, sports betting will drive about 40 per cent of all TV watching by men 25-34 years old.

NEW YORK, NY, 11 December 2018—Deloitte Global forecasts smart speakers will be worth US$7 billion in 2019, becoming the fastest-growing connected device category. This is according to Deloitte’s 18th edition of Technology, Media & Telecommunications Predictions.

Smart speakers are continuing to fly off shelves, selling 164 million units at an average selling price of US$43 per unit. Total industry revenues will be up 63 per cent, compared to $4.3 billion in 2018. However, the industry will have to overcome looming obstacles to reach its full growth potential. Speech recognition technologies continue to improve, but wider language support will need to be developed for the technology to be inclusive and experience global adoption. 

The democratisation of AI

Deloitte also predicts that in 2019 companies will further accelerate usage of cloud-based artificial intelligence (AI) software and services. Among companies using AI, 70 per cent will obtain AI capabilities through cloud-based enterprise software, 65 per cent will create AI applications using cloud-based development services, and by 2020, the penetration rate of enterprise software with AI built in, and cloud-based AI development services will reach an estimated 87 and 83 percent respectively.

“So far, AI’s initial benefits have been predominantly accrued by ‘tech giants’ with extensive financial resources, strong IT infrastructure, and highly-specialised human capital,” says Paul Sallomi, Deloitte Global Technology, Media & Telecommunications industry leader. “However, the cloud will power increased efficiencies and better returns on investment, and we expect these benefits to rapidly extend beyond AI’s pioneers to the wider enterprise.”

The new network arrives

Fifth-generation (5G) wireless networks are expected to arrive in scale, providing faster connections for consumers and enterprises, and opening revenue opportunities for telecommunication companies.

Wireless operators have been pouring resources into 5G network development—in fact, 72 operators are currently testing this offering – and Deloitte forecasts that in 2019, 25 wireless operators will launch 5G service, a figure that will likely double by 2020. In total, over one million 5G handsets are expected to be sold in 2019, and that number should expand to 15-20 million units by 2020. A further million 5G pucks/modems are also predicted to sell in 2019.

“Wide-scale adoption of 5G devices will take time, but we believe 2019 will be the starting point for sweeping change for the wireless industry,” says Craig Wigginton, Deloitte Global Telecommunications sector leader. “5G can provide hundredfold increases in traffic capacity and network efficiency over 4G, and this has transformative potential on the future of connectivity worldwide.”

Additional topics from Deloitte's 2019 TMT Predictions include:

• China’s connectivity nurtures new digital business models: Deloitte predicts China will have world-leading telecommunications networks in 2019 and most likely in the medium term. Its communications infrastructure will provide a foundation for at least three significant new industries, each of which could generate tens of billions of dollars in revenue annually by 2023.
• Betting on sports broadcasting – Deloitte predicts that 60 per cent of North American men ages 18-34 who watch sports on TV will also bet on sports. As a result, about 40 per cent of all US-based TV watching by men 25-34 years old will be driven by sports betting.
• 3D printing breaks through – Sales of enterprise 3D printers, materials, and services from large public companies will surpass $2.7 billion in 2019 and top $3 billion in 2020, growing 12.5 per cent annually each year. The list of possible 3D-printable materials has more than doubled in the last five years, which (along with other improvements) has led to a rebound in the industry’s growth potential.
• eSports continue to surge – The North American eSports market will expand by 35 per cent powered by advertising, broadcast licensing, and franchise sales. North American eSports franchise leagues will expand into specific cities, following the professional sports model.
• Radio remains relevant – Deloitte predicts that over 85 per cent of the adult population will listen to radio at least weekly in the developed world (the same proportion as in 2018), although reach will vary in the developing world. Combined, nearly 3 billion people worldwide will listen to radio weekly. In the US, Deloitte expects that more than 90 per cent of 18 to 34-year-olds will listen to radio at least weekly in 2019, and will likely spend more time listening to radio than watching traditional TV by 2025.
• Evaluating quantum computing – Quantum computing will emerge as one of the largest new technology revenue opportunities over the next decade, but are unlikely to replace classical computers. The future quantum computing market is expected to be comparable to that the supercomputer market – around $50 billion per year by the 2030s.
• China expands technological prowess – Revenues for Chinese-manufactured semiconductors will grow by 25 per cent to $120 billion, solidifying China as a globally-significant player in manufacturing and AI development. China will also have world-leading telecommunications in 2019, expanding possibilities for enterprise capabilities and interpersonal communication.

“2019 will be defined by how new technologies steadily reshape how we live and work,” says Mark Casey, Deloitte Global Telecommunications, Media & Entertainment sector leader. “From smart speakers to 5G networks, and everywhere in between, accessibility to advanced technologies is quickly improving. As the barriers continue to fall, the potential for greater connectivity and further innovation will increase exponentially.”

Now in its 18th year, Deloitte Global’s annual TMT Predictions provide an outlook on key trends in the technology, media, and telecommunications industry sectors worldwide. Visit Deloitte.com/predictions to learn more and connect with us on Twitter: @DeloitteTMT and #DeloittePredicts.

About Deloitte Technology, Media & Telecommunications

To ensure sustained business growth, it is critical that organizations address the increasing disruption posed by emerging technologies. Deloitte’s Technology, Media & Telecommunications (TMT) industry practice brings together thought leaders and trusted specialists to shape many of the world’s most recognized brands in these fields. Through its work, the TMT team aids clients in creating competitive advantage and helps them succeed in an increasingly digital world.

Deloitte Global’s annual TMT predictions serve as guideposts for future business strategy by providing a 1-5 year outlook on key trends in the global technology, media, and telecommunication industry sectors. The trends help identify key challenges and areas of focus for the world’s TMT brands as they navigate the impact of new technologies shaping the future of industry.

To learn more about Deloitte’s TMT practice and its signature piece of thought leadership, connect with us on Twitter at @DeloitteTMT or at www.deloitte.com.