Global TMT Predictions 2017

Deloitte Global predicts that ten percent of North Americans over 18 will be engaged in four or more multiple simultaneous ad blocking behaviors in 2018: we call these people "adlergic." People are adblocking on computers and mobile devices, but are also blocking or avoiding ads using smart TVs, digital video recorders, streaming video on demand and streaming music services. And there are also low-tech ad blocking methods like changing the channel on TV or stations on the radio.

However, it appears that almost nobody blocks all ads. The ad categories that cannot be easily blocked are likely to be the fastest growing ad categories for the next few years. For advertisers eager to get around adblockers, the most obvious and biggest places to focus should be mobile and social. Being #adlergic is a big deal: the most adblocking is being done by those who are younger, with higher incomes and more education ... all of whose attention is coveted by advertisers.

Deloitte Global predicts that over a billion smartphone users will create augmented reality (AR) content at least once in 2018, with three hundred million being regular users (creating content monthly) and tens of millions making and sharing content weekly. While AR is not new to 2018, what differs is quality, especially with regard to photo-realism. There is greater precision when identifying surfaces, and superior algorithms enable shadows for scenes lit by the sun or artificial light. The result is more realistic illusion.

Looking ahead, AR should enable users to appear as if they are singing along with their favorite singer, interacting with a tiger, juggling balls with a star footballer, or being in the same space as any other person, animal or object that they may want to incorporate. Indeed, we will struggle to recall a time when AR was a mere novelty.

Deloitte Global predicts that by end-2018, 50 percent of adults in developed countries will have at least two online-only media subscriptions, and by end-2020, the average will have doubled to four. Online-only subscriptions have become more viable and easy to use, thanks to devices that facilitate access to online media subscription services, steadily rising broadband speeds, and ease of signup. Expansion of smartphone screens means that news articles can now be displayed very much like a newspaper column.

But as reach has grown, revenue per viewer, browser, impression, or click has steadily fallen. Generating sufficient revenue from online advertising alone has, for some publishers, felt like a Sisyphean task. In response, content creators have increasingly started to focus on growing their online digital subscription revenues, and on formulating ever more varied and appealing digital subscription packages.

Deloitte Global predicts that by end-2023 penetration of smartphones among adults in developed countries will surpass 90 percent, a five-percentage point increase on 2018. Indeed, over the next five years the smartphone market should continue to grow in penetration, usage, unit shipments, total value and ASP. Additionally, it will consolidate its position as the primary access to digital service and content.

The smartphone's success over the next five years will be underpinned by an array of innovations that are largely invisible to its users, but whose combined impact should feel tangible, in the form of greater ease of use, or improved functionality (for example for maps and photos). These invisible innovations should enable the smartphone to continue "absorbing" the functionality of an ever-broader array of physical objects, and to further displace the PC as the preferred device for a growing range of digital applications.

Deloitte Global 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 that 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. The reasons for this are varied: sometimes mobile is the only form of data connection available, especially outside cities. Sometimes factors such as income, age, living alone, or using better and faster networks with bigger monthly data allowances seem to play a role.

Prevalent mobile-only access has significant short-term implications for firms doing business with consumers over the internet—which in 2018 is likely to be almost every consumer firm. For these situations, ecommerce retailers or online financial services firms will want to consider having low bandwidth versions that can reach the mobile-only audience.

Deloitte Global predicts that in 2018 one billion passenger journeys (about a quarter of all passengers), will be on planes equipped with in-flight connectivity (IFC), enabling data and, where permissible, voice communications. This is a 20 percent increase on 2017. It should be more popular and lucrative than ever in 2018, thanks to the rising number of routes covered, higher connection speeds and greater data capacity per flight.

The business case for IFC should become more compelling due to technological advances in satellite and ATG (air to ground) connectivity. IFC is likely to enjoy better speeds and greater capacity, enabling both improved experience and lower prices. This trend will require airlines to make significant choices when deploying IFC: should they use satellite, ATG or both? Which parts of the IFC service do they want to manage themselves? What role does IFC play in their entertainment program?

Deloitte Global predicts that live broadcast and events will generate $545 billion in direct revenues in 2018, a one percent increase on the previous year. The vast majority of live revenues are forecast to come from traditional sectors, with the remainder from live streaming, and eSports. Live TV and radio broadcasting is expected to generate 72 percent of all revenues in 2018, with the largest component being broadcast TV, with $358 billion from advertising and subscriptions. Almost all live revenues are being generated by traditional formats, but new genres, primarily live streaming and eSports, are enjoying surging revenue, with China likely to remain the largest market for live streaming in 2018.

Thanks to sheer convenience, the fear of missing out, the need for shared experiences, and exclusivity, live content—across broadcast and events—remains compelling and lucrative in 2018.

Deloitte Global predicts that by the end of 2018 over 25 percent of all chips used to accelerate machine learning (ML) in the data center 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.

GPUs (graphics processing units) were the most common kind of ML chip in the past, and they will still be the largest part of the ML chip market in 2018, and will still be growing. But they now have company, and when it comes to machine learning, big changes to the machine (in this case, the chips) are likely to cause big changes in the industry.

Deloitte Global predicts that in 2018 large and medium enterprises will intensify their use of machine learning (ML). 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 ML APIs and specialized hardware available in the cloud, these advances will now be available to small as well as large companies.

Progress in five key areas should make it easier and faster to develop ML solutions. Three of these five advancements—automation, data reduction, and training acceleration—make ML easier, cheaper, or faster (or a combination of all three). The other two—model interpretability and local machine learning—enable applications in new areas, which should also expand the market.

Deloitte Global predicts that in 2018, 45 percent of global adult smartphone users will worry they are using their phones too much for certain activities, and 65 percent of 18-24 year olds will feel the same, contrary to expectations that younger users are oblivious to their phone habits. Both young and old are actually quite happy with using their phones a lot—even hundreds of times per day. They are focusing instead on controlling usage when it is distracting them from activities they would prefer to concentrate on.

But other smartphone behaviors, such as distracted driving and interrupted sleep, are harming user relationships with others, and possibly even endangering their health or other people's health. Phone manufacturers, software and app developers, and network operators would do well to assist consumers in achieving less distracted sleeping, driving, walking and family and friends time. Some of these initiatives will improve quality of life. Some will likely save lives.

Deloitte Global predicts that traditional TV viewing by 18-24 year olds will decline by 5-15 percent per year in the US, Canada and the UK for both 2018 and 2019. But while annual declines are predicted to be in this wide range, it is also possible that declines will be at the lower end of the zone as the impact of the forces that distracted young people from traditional TV start to weaken.

Smartphones, computers, social media, YouTube, and streaming video are all nearing saturation in the three large English-speaking markets. The bottom line is that traditional TV business—broadcasters, distributors and advertisers—should assume that while 18-24 year old viewing minutes will experience ongoing annual declines, double digits will be the exception, not the rule.