tmt predictions 2016

Media releases

Touch commerce, intuitive software, mobile games, internet speeds

Business gears up to make life easier for consumers in 2016

Consumer needs and savvy millennials drive the TMT agenda in 2016, according to the Deloitte 15th annual Technology, Media & Telecommunications Predictions.

19 January 2016: In 2016 touch commerce is set to boom according to Deloitte, with the number of individuals using touch-based payment services on their mobile device increasing 150%. “We predict that being able to use your fingerprint or a couple of touches on screen to authorise a secure payment from your mobile device will accelerate by 150% globally in 2016,” said Deloitte National Media Lead Partner Clare Harding.

“We expect this to transform the overall mobile shopping experience and have a big impact on online buying.

“In our November 2015 Mobile Consumer Survey we found that of the more than 30% of Australians who browse regularly on their phone, less than 10% actually buy. This is likely to change significantly with touch commerce, which is expected to take the friction out of online buying. By speeding up and simplifying the transaction, touch commerce has the capacity to reduce ‘browse to pay’ to seconds, and create a win:win for consumers and business, converting browsers to buyers.”

Cognitive Tech and AI meet consumer needs

In the same vein, consumers will also benefit from enterprise software companies integrating cognitive and Artificial Intelligence into their products to meet the need for better customer experience and benefits through automation. Stuart Scotis, Deloitte Technology Partner said: “By the end of 2016 Deloitte predicts that more than 80 of the world’s 100 largest enterprise software companies (by revenue) will have integrated cognitive technologies into their products. This is up 25% from 2015.

“We expect software like speech recognition, machine learning and natural language processing, such as Siri, automation software and text converting apps, to become increasingly mainstream.

“In the near term, the opportunity is for business to use these technologies to enhance their current practices and improve the performance of existing software. Businesses will be able to generate new insights from the data to both better meet customer expectations and automate tasks,” Scotis said.

Mobile games and virtual reality powering up in 2016

In gaming, consumers are increasingly having their need for ease, speed and simplicity satisfied through their mobile device. This year, mobile (smartphone and tablet), is likely to become the leading games platform by software revenue, generating US$35 billion globally - up 20% from 2015. “This will make mobile the largest games category, surpassing console platforms for the first time. The expected revenues from PC gaming will be US$32 billion (up 5%) and for console games US$28 billion, up only 6% from the previous year,” Deloitte TMT Risk Advisory Partner Dennis Moth said.

“In Australia last year we saw gaming move out of the realm of the console with our 2015 Media Consumer Survey highlighting that gaming was more likely to take place on desktops, smartphones and laptops.

“That said; rewards are thinly spread in the mobile gaming market. Average forecast revenues vary significantly. Mobile games are only expected to generate US$40,000 per game compared to US$4.8 million per console game and US$2.9 million per PC game. The good news for the industry is that these three platforms are complementary and can all grow and co-exist,” Moth said.

Virtual reality also growing

Deloitte expects virtual reality to hit a major global milestone in 2016, becoming a billion dollar market. Moth said that although various forms of virtual reality, such as flight simulators, have been used in enterprise since the 1930s, for the time being VR remains a niche market.

“VR currently offers a great experience for hard core gamers – the expected dominant market in 2016. However, we are expecting it to be a year of ongoing experimentation by business,” Moth said. “This will particularly be so for sales and marketing activities associated with real estate, tourism, design and training and education. Emerging technologies can take time to move into the mainstream, so while 2016 is unlikely to provide a commercially significant return, it is possible that businesses will start reaping the benefits in the medium term.”

Consumers driving need for speed

Consumer needs for faster internet connections and more data continues to grow, driven by both the number of devices in the home and their use. “Although the number of Gigabit per second internet connections will surge to 10 million globally by year-end - a ten-fold increase - this only represents a small proportion of the 250 million customers on gigabit capable networks at the end of 2016,” explained Scotis.

“As technology continues to make the most of available capacity and consumers increasingly use multiple data intensive apps, we see internet speeds as the differentiator for providers in Australia. We would also expect consumers to naturally move to those providers offering the fastest speeds at the most competitive tariffs,” he said.

Rise of the data exclusive

As well as consumers driving capacity, they are also determining how consumption occurs and how devices are being used. The TMT Predictions 2016 report anticipates that 26% of smartphone users in developed markets will not make any traditional phone calls in a given week in 2016.

Scotis added: “In Australia our Mobile Consumer Survey 2015 showed that instant messaging (IM) use jumped nearly 70% in 2015. Millennials have grown up with smartphones and tablets and use IM as their primary form of communication. They are leading the rise of the data exclusive, with social networks, IM and ‘over the top’ (OTT) messaging apps driving the trend.

“We see this as a customer need for both affordability and control. ‘Over the top’ services accessed via WiFi provide the cost incentive and the freedom to choose how, when, or if to respond.”

More TMT 2016 Predictions

TV: erosion not implosion
Harding highlights that traditional television remains resilient in the US where it is approaching a plateau, not a fall – an important indicator for the Australian market. “Broadcast TV in the US is eroding, not imploding, as ‘cord cutters’ are expected to reach just over 1% of the subscriber base in 2016.

“Adult daily TV viewing is also expected to continue to fall to 320 minutes a day in Q1 2016 (down 10 minutes a day on 2015). Millennials daily average for the same period is projected to be 150 minutes (down 20 minutes on 2015). This trend is also playing out in other markets such as the UK and Canada.

“We can expect similar patterns in Australia. The growth of Netflix, availability of other OTT services such as Stan and Presto and offerings such as iTunes and YouTube clips are unlikely to herald the end of PayTV or FTA (free-to-air). But the dominance of live and time shifted TV is likely to diminish, exacerbated by the consumption patterns of millennials, with their greater focus on internet and mobile video consumption. Over time, as this demographic gradually makes up a greater share of the overall population, the changes will be more dramatic.”

The Post-PC Generation is actually the Pro-PC Generation
“Trailing millennials (18-24 year olds) are also predicted to buck a trend in 2016. Just as in 2015 when Deloitte predicted that print books would continue to dominate the publishing industry, we are now predicting that the generation most expected to give up the PC will do just the opposite, and be the most pro-PC of all age groups,” Scotis said.

“According to research from the Deloitte Global Mobile Consumer Survey 2015 an average of more than 85% of trailing millennials in 13 developed countries had access to a laptop in 2015. Australia’s trailing millennials are pushing this further, with access among this demographic 12% higher than for the population as a whole.

“Despite being the smartphone generation, millennials see PCs as complementary to their mobile device, rather than a substitute. Trailing millennials are more than happy to have a smart phone in one hand and a laptop open in front of them. They prefer PCs for streaming content and watching long videos, computer games, working and studying, online shopping, banking and creating and editing content,” Scotis said.

Women in Tech
Deloitte predicts that globally by end-2016 fewer than 25% of information technology jobs in developed countries will be held by women. “This gender imbalance is about the same level as in 2015,” said Clare Harding, with the number of IT roles in developing countries growing by around 20% in the last five years. She added that the imbalance is a function of many factors including fewer women than men graduating with IT qualifications, a likely bias in recruitment advertising, an unconscious gender bias in hiring and promotions, difficulties with retaining women in IT jobs, potentially a hostile culture and in Australia, a 20% pay gap between women (less) and men.

Harding said that Australia is however punching above its weight relative to other developed nations, with a slightly higher percentage of women in IT - 28% vs 25% average - of Australian IT jobs held by women across diverse occupations. The Australian figure includes all ancillary and administrative roles.

“However it is encouraging that we are starting to see more women in senior IT roles globally, which highlights the need for positive role models and ongoing culture change. But clearly there’s still a long way to go. We need to focus on breaking down the barriers, including reducing the gender gap in the education pipeline, and addressing the attributes in the industry, including culture, that are making IT potentially unattractive both to women and men.”

Grannies are also selfie sharers
In 2016 Deloitte predicts that 2.5 trillion photos will be shared or stored online, a 15% increase on 2015. The overall network impact of this will be 3.5 exabytes of data – that is 3.5bn gigabytes – an increase of 20% year on year.

“The Deloitte 2015 Australian Mobile Consumer Survey highlighted that Australians love to take photos, with 95% of us having taken a photo on our smartphone,” said Harding.

“Photo-sharing apps, fast wireless networks and the increasing quality of smartphone cameras are catalysing this trend with age no barrier, as Aussie Grandmas also show us how it’s done. Our survey revealed that in Australia women (73%) are far more likely to use their smartphone to share a photo on social media compared with men (57%) and that not only is Grandma likely to take your photo (29% taking photos weekly), she might also post it on social media (7% posting weekly)!”

eSports another niche market
“People love to play computer games, but there is also a small but growing audience, expected to reach 150 million globally in 2016, that love to watch others play,” said Moth. “With the propensity of millennials to purchase content, apps and in-app offerings, tech and media companies are now looking to monetise this market.”

For more of the global TMT predictions see the Deloitte TMT Predictions Report available on the Deloitte website www.deloitte.com/au/tmtpredictions

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