Virtual reality gear forecast to hit record $1Bn mark
Deloitte Global 2016 TMT Predictions
Less than 25 percent of IT jobs in developed countries expected to be held by women
2016 TMT Predictions: Overview
- 1 Gigabit domestic data connection to be the norm by 2020
- Number of individuals using third party touch-based payment service to make a purchase on mobile devices likely to increase by 150 percent to reach 50 million regular users
- In 2016, 2.5 trillion photos are expected to be shared online – a 15 percent increase from 2015
- 26 percent of smartphone users in developed markets are expected to not make any traditional phone calls in a given week in 2016.
Deloitte Touche Tohmatsu Limited (Deloitte Global) predicts that virtual reality (VR) will have its first billion dollar year in 2016, with about US$700 million (€645 million) in hardware sales, and the remainder from content. The 15th edition of Technology, Media & Telecommunications (TMT) Predictions, a report by Deloitte Global, estimates sales of about 2.5 million VR headsets and 10 million game copies. Additionally, the report expects the majority of spending on VR to be by core users rather than casual gamers. This means that while anyone with a smartphone could try a variant of VR, the majority of VR’s revenues in 2016 will likely be driven by tens of millions of users rather than billions of users.
“While in 2016 virtual reality is expected to reach a major milestone―becoming a one billion dollar market—in the long term VR is likely to struggle to reach the scale or ubiquity of the smartphone, PC or the television set,” said Richard Howard, Head of Technology, Media and Telecommunications, Deloitte Ireland. “However, as the technology required to provide a total immersive experience improves, wider global adoption may ensue.
“We are seeing significant growth potential in cognitive technologies, such as computer vision, natural language processing and machine learning. This year 80 of the world’s top 100 enterprise software companies are expected to be using cognitive technologies, unleashing the potential of the Internet of Things; this may even transform computing as we know it over time. While cognitive technologies may get less immediate attention from consumers than new virtual headsets, it is likely to be much more important over the long run for the enterprise and for consumers alike."
Women in IT jobs
It is about education, but also about more than just education
By the end of 2016 fewer than 25 percent of information technology (IT) jobs in developed countries are expected to be held by women, (i.e., women working in IT roles). This figure is about the same as 2015, and may even be down. Even if real progress is made in improving gender parity in STEM at levels of the educational pipeline, it may take time for those improvements to translate into IT job parity. There are challenges beyond the education pipeline, and firms will need to examine how they not just recruit, but also retain, pay and promote women. From having both men and women as part of the hiring process, to senior women mentoring more junior IT workers, there are actions that firms can take to address the imbalance. One further solution may be for governments to take the lead, and attempt to increase the percentage of women in IT jobs in the public sector.
Howard commented: “According to the Central Statistics Office less than 25% of STEM jobs are filled by women in Ireland. This is broadly in line with this global prediction, and highlights that Ireland is not alone in its need to redress this imbalance. However, given the importance of not just the technology industry to Ireland’s economy, but also the requirement of strong and adequate IT skills in a wide range of industries – from financial services, to consumer business and beyond, this is an issue that needs to be addressed both quickly and effectively.”
Additional findings from Deloitte Global’s 2016 TMT predictions include:
- Millennials may not be the post-PC generation - While millennials are the smartphone generation, trailing millennials (those 18-24 years old) are anticipated to be the most pro-PC of all age groups of 2016. According to research by Deloitte member firms1, an average of over 85 percent of trailing millennials in 13 developed world countries had access to a laptop in 2015. This data suggests 18-24 year-olds see smartphones and PCs as complements, not substitutes, which may in part be due to the decreased costs of laptops.
- Cognitive technologies enhance enterprise software - In 2016 more than 80 of the world’s 100 biggest software companies will likely have integrated cognitive technologies such as machine learning, natural language processing, or speech recognition, into their products. This represents a 25 percent increase from 2015 when 64 of the top 100 had launched products and services, which featured one or more cognitive technologies.
- Touch Commerce: the mobile online checkout gets an express lane - The number of individuals who use a third party touch-based payment service to make a purchase on their mobile devices (smartphones and tablets) is likely to increase by 150 percent to reach 50 million regular users in 2016. Touch commerce enables retailers to exploit shoppers’ increasing use of mobile devices to browse retail sites where transactions have remained scarce, due mostly to laborious payment processes.
- Mobile ad-blockers: saved by the app? - Only 0.3 percent of all mobile device owners are expected to use an ad-blocker by the end of 2016. This is likely to place less than US$100 million (€92 million) (0.1 percent) of the US$70 billion (€64 billion) mobile advertising (smartphones and tablets) market at risk.
- Mobile games: leading, but less lucrative - In 2016 mobile (smartphone and tablet) will likely become the leading games platform by software revenue, expected to generate US$35 billion (€32 billion) in revenue, up 20 percent from 2015. This compares to expected revenues of US$32 billion (€29.5 billion) for PC games and US$28 billion (€26 billion) for console games, up only five and six percent respectively from the previous year. However, average revenue per game by platform will likely vary significantly.
- eSports: bigger and smaller than you think - eSports will likely generate global revenues of US$500 million (€461 million) in 2016, up 25 percent from about US$400 million (€369 million) in 2015, and will likely have an audience of regular and occasional viewers of close to 150 million people. This expected revenue is only a fraction of league revenues in major sports such as European soccer, American football, basketball or baseball, which range from US$4 billion (€3.7 billion) up to US$30 billion (€28 billion).
- European soccer scores US$30 billion (€28 billion) - The European soccer market will likely reach US$30 billion (€28 billion) for the first time in 2016/2017, an US$8 billion (€7.4 billion) increase relative to 2011/2012, and a compound annual growth rate of seven percent.
The dawn of the Gigabit Internet age: every bit counts - The number of Gigabit per second (Gbit/s) Internet connections is expected to surge to 10 million by year-end, a tenfold increase of which about 70 percent will likely be residential connections. Rising demand will likely be fueled by increasing availability and falling prices. It’s anticipated that about 600 million subscribers may be on networks that offer a Gigabit tariff as of 2020, representing the majority of connected homes in the world.
Used smartphones: the US$17 billion (€15.7 billion) market you may never have heard of - In 2016 consumers are expected to sell outright or trade-in approximately 120 million used smartphones, generating more than US$17 billion (€15.7 billion) for their owners. This is a marked increase from the 80 million smartphones traded in 2015 with a value of US$11 billion (€10 billion). Moreover, 10 percent of premium smartphones (US$500/€462 or higher) purchased new in 2016 will likely end up having three or more owners before being retired.
Photo sharing: trillions and rising - In 2016, 2.5 trillion photos are expected to be shared or stored online, a 15 percent increase on the prior year. Over 90 percent of these photos will likely have been taken with a smartphone; digital SLRs, compact cameras, tablets and laptops are estimated to collectively contribute the remainder. This estimate does not include the trillions of photos that remain on devices’ memory.
The rise of the ‘data exclusive’ - About 26 percent of smartphone users in developed markets are expected to not make any traditional phone calls in a given week in 2016. These individuals, known as ‘data exclusives’, have not stopped communicating, but are rather substituting traditional voice calls for a combination of messaging including SMS, voice and video services delivered ‘over the top’.
VoLTE / VoWiFi: capacity, reach and capability - 100 mobile operators worldwide will likely be offering at least one packet-based voice service at the end of 2016, double the amount year-on-year, and six times higher than at the beginning of 2015. The report estimates that approximately 300 million customers will be using Voice over WiFi (VoWiFi) and / or Voice over LTE (VoLTE), double the number at the start of the year and five times higher than at the beginning of 2015.
Now in its 15th year, Deloitte Global’s annual TMT Predictions provides a 12-18 month outlook on key trends in the technology, media and telecommunications industry sectors worldwide. Full details about the global TMT Predictions are available here: www.deloitte.com/tmtpredictions
 Source: Deloitte member firms’ Global Mobile Consumer Survey, developed countries, May-July 2015. The question was focused on laptops rather than computers or desktops. This question is part of the Deloitte member firms’ Global Mobile Consumer Survey, conducted in 13 developed countries. Fieldwork took place between May and July 2015. For more details, see Deloitte member firms’ Global Mobile Consumer Survey: www.deloitte.com/gmcs
About the Deloitte Global TMT Predictions
The TMT Predictions are based on worldwide research supported by in-depth interviews and input from Deloitte member firm clients, Deloitte member firm alumni, its industry analysts, leading TMT executives, and thousands of Deloitte member firm TMT practitioners across its global network. The focus of Predictions varies from year-to-year, but one theme appears constant: the impact of TMT on behaviour steadily deepens.
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