TMT Predictions 2017


TMT Predictions 2018

Augmented reality, machine learning, smarter smartphones, and mobile-only connections dominate the list.

Will augmented reality become mainstream? How will machine learning affect the enterprise? What's the future of the smartphone? In 2018, the technology, media, and telecommunications (TMT) ecosystem remains as fascinating as ever.  

Our annual TMT Predictions combines the best of Deloitte Global thinking and original and secondary research with perspectives from hundreds of conversations with industry leaders, as well as the aggregated opinions of tens of thousands of consumer across the globe. Together, they inform what we believe to be the major TMT trends over the next one to five years.

Explore the page below to understand the implications for the Australian market.

TMT Predictions 2018

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Augmented reality: on the cusp of reality

Deloitte predicts that globally, over a billion smartphone users will create augmented reality (AR) content at least once in 2018. Three hundred million are expected to be regular users who create content monthly, and tens of millions will make and share content weekly. Tens of thousands of apps incorporating AR capability are also predicted to become available in 2018, and by year-end billions of smartphone users will have downloaded an app or an app update, or an operating system (OS) update, that incorporates AR content creation capability.

2018 will be a big learning year for Australian businesses as they work out how to adopt Augmented Reality (AR) technology into their strategies and budgets.

As strategies develop, so too does the potential for Australia to emerge as a force on the AR stage. Particularly given we are home to industries such as mining, education and training, property, and retail, where AR technology is primed to support business processes and take customer experiences in these areas to the next level.

While AR technology has been around for a long time, the number of applications are growing, opening opportunities for new business solutions and changing the nature of the future of jobs. We expect to see organisations adopt the technology more often as a way to solve problems and improve ways of working, as well as to enhance customer experiences. Australian AR start-ups also have the opportunity to become leaders in this space, where the most successful companies will be those who keep the customer front of mind.

Australia is on the precipice of mass adoption of AR. In the future it will be used by every worker in every industry, making everyday tasks easier. It will also be embedded in our entertainment experiences.

Organisations that build a workforce with the relevant skill sets and embrace this technology now will set themselves up for success in a future when AR truly is everywhere.

Smartphones: invisible innovation and distractions

Deloitte predicts the penetration of smartphones among adults in developed countries will surpass 90 percent by end-2023. The smartphone's success over this time will be underpinned by an array of innovations that are largely invisible to its users - think connectivity, processors, software, artificial intelligence + more.

45 percent of global adult smartphone users in 2018 are predicted to worry about using their phones too much for certain activities. And 45 percent of all adult smartphone users will try to limit their phone usage in various ways - from employing high-tech apps that measure or limit usage to sticking their device in a drawer.

The future of the smartphone: the era of invisible innovation
Deloitte's Mobile Consumer Survey 2017 suggests that Australia's smartphone penetration is set to surpass the global prediction by end-2018, with the survey finding that 88 percent of Australians already own a smartphone, up from 84 percent the prior year. It also found that penetration rates for Australians under 55 years-old are already above the 90 percent mark and growth in penetration is expected to come from those over 55 years-old.

With these already high rates of smartphone owners, improved quality mobile networks, and the prevalent adoption of smartphones for use in enterprise settings, expect to see alternate uses for the smartphone increasing in Australia. This includes smartphone activated Internet of Things (IoT) functions and work-flow based business applications. While sectors such as personal banking, home security and insurance will further capitalise on the smartphone to improve customer experiences.

However, the top priorities for smartphone customers must continue to be met - telcos need to provide Australians with premium phones on high quality networks.

Smartphones are useful, but can be distracting
With Australia reaching almost peak smartphone penetration, with one of the highest smartphone penetrations worldwide, we are big smartphone users.

However, as discovered in Deloitte's Mobile Consumer Survey 2017, 41 percent of Australians adults think they use their mobile phones too much and 70 percent of Australian 18-24 year olds feel they use their phones excessively, with 50 percent of them trying to limit their phone usage and half of them doing so successfully. This is in line with the global prediction.

Smart organisations might keep this in mind given there may be a market to assist people in managing their phone use in a way that meets their expectations.

Machine learning: things are getting intense

Deloitte predicts that by the end-2018 over 25 percent of all chips used to accelerate machine learning in the data centre will be FPGAs (field programmable gate arrays) and ASICs (application-specific integrated circuits). These new kinds of chips should dramatically increase the use of machine learning, enabling applications to consume less power and at the same time become more responsive, flexible, and capable.

In 2018 large and medium enterprises will intensify their use of machine learning. The number of implementations and pilot projects using the technology will double compared to 2017, and will double again by 2020. Further, with enabling technologies such as machine learning APIs and specialised hardware available in the cloud, these advances will now be available to small as well as large companies.

Advances in machine learning chips, and across hardware more broadly, are enabling businesses to realise the power of machine learning and how it can transform business processes and the customer experience.

In Australia the uptake of machine learning has been slow, largely due to a skills gap around the application of the technology. Despite this, as companies across the globe increase the number of machine learning applications they are implementing, we expect to see leaps in experimentation around the use of the technology by Australian businesses, in particular in industries such as consumer electronics, autonomous vehicles, clinical operational diagnosis in healthcare, finance, insurance, and human resources.

Machine learning is at a tipping point
From smart metres, smart fridges and smart cars to clinical operational diagnosis in healthcare and liquidity markets driven by artificial intelligence, machine learning is going to change the way we live.

For Australian businesses it's all about how to apply machine learning algorithms to improve business processes, then to test and fine tune them to achieve maximum value from the technology. However, it's not about how many applications or implementations a business does, rather about the impact it will have on consumers.

Media: live TV, subscriptions and ad-blocking to thrive

Deloitte makes four predictions set to impact the media sector globally: live TV will thrive in an online world with revenue slowly increasing and digital platforms will move to offering live TV programming; subscriptions will continue to grow and by end of 2018, 50 percent of adults in developed countries will have at least two online-only media subscriptions; traditional TV viewing by 18-24 year olds will decrease, and 10 percent of North Americans over 18 will be engaged in four or more multiple, simultaneous ad-blocking behaviours in 2018, and 75 percent will engage in at least one.

Live to thrive, subscription prescription, no tipping point in TV trends for 18-24 year olds, and an #adlergic epidemic
Live content is expected to thrive in Australia alongside our appetite for on-demand entertainment. Much the same as the rest of the world, we predict live revenue to be dominated in Australia by TV and Radio broadcasting, with events including live performance, music and sport also generating significant revenues. However, advancing digital technology (including faster internet speeds) and the increasing revenue demands from rights owners has in turn driven increased interest and competition for live content beyond traditional broadcasters.

Australia has embraced media subscriptions, particularly for SVOD and music. In line with global findings, our subscriptions numbers are rising and there is still room for growth, but subscription generated revenue alone is not expected to be sufficient for most media players.

Again supporting global findings, traditional TV viewing in Australia may be in slow decline for younger age groups, but as found in our 2017 Media Consumer Survey we are seeing an uptick in viewing amongst the Boomers and mature age groups who are watching more TV and starting to do so across a range of devices.

When it comes to #adlergic behaviour, the technology ad blocking rates in Australia are currently significantly lower than those in North America - according to our 2017 Media Consumer Survey, 31% of Australians use ad blockers as compared to 75% in the US. If the trends observed in global markets play out in Australia, it is the categories where it is harder to block or avoid adverts - mobile, social and out-of-home advertising - that will see growth in the coming years.

Mobile-only: wireless home internet is bigger than you think

Deloitte predicts that a fifth of North Americans with internet access will get all of their home data access via cellular mobile networks (mobile-only) in 2018. And a mixture of cellular and fixed wireless access (FWA) technologies could lead to 30-40 percent of the population relying on wireless for data at home by 2022.

Mobile-only: wireless home internet is bigger than you think
In the short-term mobile-only is unlikely to take-off in Australia. Nevertheless, as providers increasingly offer unlimited data plans, consumers may progressively go mobile only. Organisations wishing to maintain and capture the growing 'mobile-only' market will need to deliver a competitive offer and deliver it early.

That said, data usage in Australia is sky-rocketing as bandwidth intensive streaming services take over the living room. ACMA reported data consumption grew by 43 percent in the year to June 2017, with a phenomenal 90 percent of that growth over fixed networks. In 2018, the growth in data consumption in the home will likely continue - with fixed broadband pricing to reduce, which could largely neutralise the mobile only threat.

The role of fixed-wireless in Australia is yet to be determined and will depend on the economics, government policy, timing and operator strategy. That said, fixed-wireless is expected to take off in markets where there is a lack of fibre connectivity, and there is a possibility that new owners of mobile spectrum could use it to make a fixed-wireless play in particular locations.

Fasten your seatbelts: in-flight connectivity takes off

In 2018, one billion passenger journeys on planes (reflecting approximately one quarter of total plane journeys) will be on aircrafts offering inflight connectivity (IFC) globally. This equates to a 20 percent year on year increase, and comprises both data usage as well as voice communications (where permitted).

Fasten your seatbelts: in-flight connectivity takes off
A number of international carriers from the US, Asia Pacific and Middle East have offered in-flight connectivity (IFC) with different price points and connection speeds/quality dependent on the base technology being used, giving Australian travellers a taste of IFC when travelling internationally.

A wider-scale rollout of IFC within Australia across the two major carriers will be welcomed by passengers, with the local market lagging global IFC roll out by a number of years.
The use of second generation satellite technology by the two Australian carriers is likely to mean more consistent, higher quality network connections.

The wider-scale rollout of high quality IFC within the Australian market progressively throughout 2018 will have a marked impact on the travel experience here, finally providing a similar in air experience to those on offer in markets such as North America and on certain inbound flights for a number of years.

More interestingly, the ability to access subscription video on demand (SVOD), media streaming and more live content brings about considerations for the media industry, with the potential to drive service discovery and sign ups with certain demographics, perhaps even tying this with customer data available through the two airline's strong loyalty programs.

It remains to be seen as to other services that could be offered now that IFC will be available on a consistent basis - further to improving airline operational efficiency, it's worth considering the other services that could be either enabled or on-sold with a large number of Australian airplane travellers now connected throughout their journey e.g. selling or advertising onward transport options, in-flight shopping with pick up of items at the airport once landed.

TMT Predictions 2017

As the pace of technological change becomes exponentially faster, it is increasingly difficult to identify the major trends that could have profound effects on enterprises and consumers. To help address this challenge, we’re pleased to offer the 2017 version of Predictions from Deloitte Global, designed to provide insight into what may offer disruption and growth opportunities across the technology, media and telecommunications ecosystems.

Download the infographic.


TMT Predictions 2017

TMT Predictions 2016

Our objective with TMT Predictions is to identify critical inflection points that we believe should inform industry strategic thinking, and to explain how we think these will manifest over the next 12-18 months for companies in Technology, Media, Telecommunications (TMT), and other industries.

TMT Predictions 2016
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