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Technology, Media and Telecom Market Outlook

I've been behind in my reading and have just finished the Deloitte "Technology, Media and Telecommunications (TMT) Predictions" for 2012. Their annual assessment is one of the most comprehensive market studies, and a good source of industry insight and analysis.

Granted, not everyone can invest the time to read all 56 pages in their report. The following are excerpts that I’ve selected from the “bottom line” summaries.

“Network operators should expect a steady rise in tablet ownership, and evaluate the impact this will have on connectivity. Tablet utility will depend on connectivity: the more useful and used a tablet, the more bandwidth it is likely to consume. End-users will of course hope for faster bandwidth and bigger monthly data allocations, all at a lower price. The demands for faster bandwidth and more data are not necessarily impossible to accomplish if users shape their data consumption to align demand with network availability, rather than expecting on-demand service at all times.”

“In the past, most consumers were not involved in picking their storage technology: they simply accepted whatever the manufacturer installed. But in 2012 and beyond, buyers may have the option to consciously choose between SSD and HDD storage. Many people do not know one technology from the other and will need to be educated about the costs and benefits of each. Consumers that hoard data will likely opt for the higher capacity of HDDs, while those most concerned about battery life or weight will likely choose SSDs.”

“Television advertising should be blended more closely with online advertising; however, the focus should be on matching TV viewing to browsing patterns. TV’s ability to influence search patterns is well documented: it can effect an 80 percent uplift in searches on a brand over the duration of a TV ad campaign. Yet, at present, there is little widespread conjoined monitoring of TV viewing’s impact on search. Mapping an individual’s TV viewing to his or her searches could quantify a TV campaign’s ability to influence people’s interests and purchases.”

“For content providers, offering TV shows to commuters should be broadly positive, as it will generally mean more time for their content to be consumed. Catch-up commuters are unlikely to reduce the amount of time spent watching television at home; rather, they will probably watch more of the content they like. This is similar to what happened with DVRs: households ended up watching more television, not less. For pay TV platform owners, catch-up commuting should be a way to manage churn among existing customers. It could provide an additional way for customers to access premium content.”

“Social and casual games are likely here to stay, but it may prove challenging to increase their share of the total $63 billion global video games market significantly beyond its current two percent, if the monetization model remains constant. Social games’ path to higher revenue may lie in iterating the business model, and charging to play games.”

“Handset vendors should constantly revise their $100 smartphone offering; a specification that was perceived as market leading at the start of 2012 may well be considered market trailing by year-end. The price of many components is steadily falling – for example the cost of touch screens has dropped by about 30 percent annually in the recent past. This will enable the specification of the $100 smartphone to continue rising for years to come.”

“Networks offering high utility will always tend to become congested. As bottlenecks approach there are two solutions. One is to increase capacity, the other is to smooth or lower throughput. The capacity of public and private wireless networks, such as cellular mobile and Wi-Fi will keep expanding. But demand for data capacity appears to be growing at a faster pace – it may prove hard to build a network, based on a single technology that can cope with a doubling in demand every year – and still make money.”

“Finally, the trend towards more capped wireline data plans is likely to be reversed over the long term. As caps are used to manage network congestion, the rollout of much higher capacity wireline technology like the various fibre optic technology solutions may mean that either caps are removed, or are set so high as to be practically unlimited for virtually all users.”

“As the catalog of apps continues to swell, the gulf between the blockbuster hits and everything else is likely to continue widening in 2012 and beyond. A few years ago, it was feasible for developers to write apps in their spare time that might rank as a Top 10 download. In mature apps markets, those days are largely over. The market has become more professional, and is increasingly dominated by major content developers, although there are still many tens of thousands of smaller companies and individuals developing new software.”

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