Deloitte reveals the main 2013 trends in its international study of the Technology, Media and Telecommunications sector (TMT)

So many challenges for the sector in 2013

Password vulnerability, the enduring supremacy of the traditional computer, record sales for smartphones, the emergence of advertising on tablets and smartphones, connected TV sets… so many challenges for the sector in 2013.

Brussels, Thursday, 07 March 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 2013 TMT Predictions are based on interviews and research, customer testimony, sectoral analysts, company heads and more than 6,000 Deloitte professionals in the TMT sector. According to this 12th edition of the “Technology, Media & Telecommunications Predictions”, in 2013 more than 90% of the passwords could be hacked in a few seconds, a billion smartphones will be sold and advertising on tablets and smartphones should surpass the now waning advertising on mobile phones.

“This year’s predictions cover a broad range of subjects going from the enduring supremacy of the traditional computer, despite lower sales than those of smart devices, via the development of crowdfunding, to the explosion of smartphone sales and the vulnerability of passwords”, declared Luc Van Coppenolle, Deloitte Partner and TMT Sector Manager in Belgium.

Vincent Fosty, Consulting Partner for the TMT sector in Belgium, specified - “This year, our predictions shed light on the emergence of new content monetization modes: whether it is a question of new forms of advertising dedicated to smartphones or tablets,  “All-You-Can-App” applications for mobile applications or multi-screen uses which open a whole host of prospects for holders or content distributors”.

According to Deloitte’s 2013 TMT Predictions, these are the main identified trends that are likely to impact our market:

1. P@$$1234: The End Of Security Based Solely On Passwords

More than 90% of user-generated passwords can easily be hacked, and after only a few hours even for those that have been meticulously selected. The solutions that are increasingly being adopted include multi-factor authentication. Although a hacker can discover your username and your password, it is highly unlikely that he would know the number of your identity card or that would have a copy of your fingerprint. Many companies in the technology and telecommunications field would be able to introduce this kind of authentication within their services, software programmes and devices in 2013. They could also rely on OTP (One Time Password) mechanisms which no longer require storage or explicit password transmission, innovations in authentication technologies and applied cryptography having provided new answers to the risks of password interception or theft.

2. The Traditional Computer Is Not Dead

Despite a slowdown of sales in favour of other devices, more than 80% of the data in circulation on the Internet will continue to be generated by traditional personal computers (desktops and laptops). More than 70% of the time spent (computer, smartphone, or tablet) will be on a personal computer in 2013. Among the 1.5 billion personal computers in circulation in the currently developed countries, many of them belong to companies and consumers who also have the means of owning a smartphone or a tablet. On the other hand, that will probably not be the case of a billion or so people who would like to access the Internet in the future. For economic reasons, most of them will choose one or even two devices, but not three.

3. Bring Your Own Device (BYOD): Two Interpretations

Very few companies will adopt a BYOD policy enabling their employees to claw back the price of their computers when used for business purposes. On the other hand, 50% of the Fortune 500 companies will indeed allow their employees to use their own computers and to connect them to the corporate network. Be that as it may, the cost for the company is considerable, because it at least involves reinforcement of its security strategy and in certain cases the installation of VPN or Web access for certain applications. Not to mention the problem of personal data confidentiality for the employees…

4. Crowdfunding Portals Will Raise Three Billion Dollars Worldwide In 2013, Namely Twice That Of 2011

Crowdfunding portals are websites that enable a multiplicity of people to support a project or a company financially by individually contributing a negligible share of the full amount. This way of financing is known as an alternative to venture capital, even though regulatory brakes and the investors’ risks remain. The opportunities are nevertheless much greater for the TMT sector in particular, for example through the financing of the development of games or the production of films enabling investors to benefit from the finished product in return for their financing. These websites should thus become a major source of funds for the games industry, for example.

5. Connected TV Sets, A Sales Boom But Disconnected From The Uses

Tens of millions of connected TV sets will be sold worldwide in 2013, and the installed base of television sets with integrated connectivity should exceed 100 million units. However, only 15% of the purchases will occur on account of the integrated connectivity. It is highly probable that the situation will remain largely unchanged unless exclusive contents are made available only on connected TV sets. These are used mainly for on-line games, for surfing the Internet or for downloading applications, with the actual broadcast or the catch-up facilities remaining the preference for watching programmes and films.

6. A Billion Smartphones Sold For Basic Use

In 2013, Deloitte is forecasting that the number of smartphones sold in the world will for the first time exceed a billion units and that the total quantity will be approaching two billion by the end of the year.
On the other hand, the number of people who will make use only of their smartphone’s basic functionalities (voice, text and photographs) will constitute a majority of users. 16% of smartphone owners have never downloaded a single application and 1 out of 5 have seldom or never accessed the Internet. Operators wanting to encourage the use of data services will have to find appropriate marketing strategies.

7. All-You-Can-App (AYCA) – Unlimited Applications  

In 2013, between 50 and 100 mobile phone operators will be offering “All-You-Can-App” services with unlimited access to a restricted number of mobile applications. This kind of service will as a priority be addressed to customers whose data consumption is limited. The most popular AYCA services will above all concern social networking, music streaming, e-mails, videos and texting. Certain operators could launch free AYCA services for a limited period in order to stimulate their use.

8. Advertising On Mobile Phones Is Dead – Long Live Advertising On Tablets And Smartphones  

Mobile advertising will be targeted on two categories of terminal, tablets and smartphones, which still require considerable innovation and investment for developing formats adapted to each screen size, for example rich media such as interactive videos. Tablets should generate approximately 4.9 billion dollars of advertising revenue in 2013 and smartphones nearly 3.4 billion dollars. Tablet-based advertising should enjoy the stronger growth, with a rise of 50-55% in 2014 against 30-35% for that on smartphones.

9. The Double Screen In Prime Time

The TV viewers’ need - families in particular - to be able to watch several programmes at the same time and in the same room has been latent for decades. PIP (picture-in-picture) now has its replacement: PAP (picture-and-picture), a TV screen and a connected device (PC or tablet) for watching either different programmes or the same programme from two different perspectives (two matches of the same tournament, for example). Deloitte is predicting that 10% of households will watch double-screen TV programmes in 2013 - which will impact not only content producers, but also broadcasters, advertisers and advertising agencies. 

10. Over The Top: An Opportunity For Channels And Distributors

Two thirds of the “over the top” television and film programmes and services will be offered by the existing channels and distributors, by leveraging their brands and their contents and thus reducing the opportunity for the pure players. The latter should not to see their paying customer base exceed 10% of the number of households in most countries. The scheduled programmes will continued to attract the majority of the audiences and Deloitte is predicting that 75% of the contents will be watched during the week after the initial broadcast.

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