Deloitte defines the main trends for 2012 in the telecommunications, media and technology sector

Brussels, 18 January 2012 – Today Deloitte announces its global annual report "Predictions for the Technology, Media & Telecommunications Sector, 2012". Demand for consumer technology will continue to advance in 2012, making consumer electronics a status symbol. Around five million tablets will be sold to people that already own one, which means an important rise of multi-tablet owners in 2012. No less than 95% of all television programmes watched in 2012 will be live or within a day of the original broadcast, which stresses the domination of the TV schedule, even in 2012. Moreover, Five billion hours of catch-up television will be watched on public transport in 2012. These are some of the most important conclusions of the Deloitte TMT Predictions for 2012.

An overview of the most important conclusions:

Investment in consumer electronics defies the economic headwinds

Demand for consumer technology will continue to advance in 2012 with record numbers of smartphones and tablets likely to be sold and demand from emerging markets for lower-cost televisions and computers boosting volumes.
Luc Van Coppenolle, Industry Leader TMT at Deloitte Belgium comments: "Countries that are experiencing stagnant growth or mild recession should see overall growth in consumer technology unit shipments. Nevertheless, the EUR value might be flat as prices come down due to technical evolution and competition. Compared to the cost of buying a car or a house, an investment in consumer electronics could become an alternative status symbol for consumers with constrained budgets. Buyers may even sacrifice vacations in order to upgrade to a new computer and television."

It takes two to tablet: the rise of the multi-tablet owner

The tablet explosion has shown little sign of slowing down since the format hit the market in 2010 and it is set to take the mantle of the most rapid 'multi-anything' market penetration in history. Globally, roughly five million tablets will be sold in 2012 to people that already owned one generating up to $2 billion in revenue. The supply of tablet choices is likely to become even more varied. There is likely to be a marked increase in the number and popularity of smaller tablets, ranging in screen from 5 to 7 inches, to be used differently than their 10 inch equivalents. Corporations are also likely to require tablets with greater security and ruggedness. That presents a challenge for content owners, network operators and retailers that need to prepare to respond to the rise in the multi-tablet household.

Over half a billion low-cost smartphones will be in use by end of 2012

Over half a billion low-cost smartphones - sold for less than $100 - will be in use by the end of 2012 as demand for basic handsets that still have computer-like functions continues to grow. The rise of the $100 smartphone is analogous to the growth of the netbook - low cost, low power laptops - as consumers look to replace more basic handsets but don't need the power or functionality of high-end devices. The biggest opportunity is in emerging markets where internet access is low but the desire for communication and information services is growing. Luc Van Coppenolle: "Yet the $100 smartphone could also appeal to users in mature markets where it could become a perfect teenage 'starter' phone, offering a "smartphone look" at a lower price. This will put pressure on the supply chain to cut the price of components but also presents a challenge for app developers as low-cost smartphone owners are less likely to want to pay for downloads."

So many apps - so little to download

The number of apps available surged through the one million mark in December 2011 and will double again by the end of 2012. However, the proportion that is paid for remains small. Only a fifth of those that are downloaded break through the 1,000 mark and only a tiny proportion of unpromoted apps will ever become successful. The demands on the developer are increasing as the variety of smartphones and tablets increases. To reach a global target market a developer may have to make 360 different variants in view of different operating systems, languages, processing speed and screen sizes.

Five billion hours of catch-up television will be watched on public transport in 2012

Globally, smartphone and tablet owners will watch five billion hours of catch-up television content on their devices while on public transport in 2012, as the age of the "catch-up commuter" starts to take off. There are, however, technological challenges related to recording content onto phones and televisions and the legality of doing so is not always clear. The catch up commuter represents an opportunity to content producers as it means people will watch more television. However it represents a threat to the publishers of free newspapers and portable video games consoles.

The TV schedule still dominates

For all the talk of the death of linear television, 95 per cent of all television programmes watched in 2012 will be live or within a day of the original broadcast. Technology has not shattered the TV schedule which has remained surprisingly powerful. Even the advent of social networks has enhanced, rather than diminished, the schedule's appeal as commentary on programs has expanded from the living room to a community. Luc Van Coppenolle: "This may be because we are hard-wired to prefer schedules and routine. Conventional broadcasters need to build on this power and show advertisers the advantages of the schedule and building campaigns within the context of a schedule."

Extracting the premium from social games

With the growth of social networks and the popularity of social gaming taking off in 2010 and 2011, the financial potential of 'social gaming' has been drawn to the public's attention. However companies need to evolve away from the 'freemium' model that has propelled them into the spotlight to take a greater portion of the $63 billion global games market. Growth has already started to slow for some developers while the overall community of social gamers has stuttered over the past two years. Growth in revenue across the sub-sector will slow to less than 20 per cent in 2012 which may force the hand of games developers to focus less on selling virtual goods over social networks and to consider the potential of advertising or charging for games up front. In this way it needs to adopt the business model of the more traditional console gaming industry and look to develop franchises.

Here come more data caps: it's the end of the (wire)line for unlimited Internet

The demand for data has already seen many mobile phone networks call time on the "all-you-can-eat" world and 2012 could be the year that a similar trend occurs in fixed line broadband. One hundred million Internet users will have to start watching the capacity meter this year as explicit monthly bandwidth caps are introduced to alleviate congestion. Demand is growing at over 30 per cent a year with traffic at peak times already forcing many network providers to throttle back speeds. The caps placed on mobile networks have forced many consumers to offload data usage onto Wi-Fi networks which has added further strain to the wireline world. Whether it is a billing-based cap or a speed-based cap that is introduced, the era of "unlimited" data may be drawing to a close and options such as "web bypass" may become a way for consumers to reduce their consumption to avoid breaching their limits.

Hard times for the hard drive: solid state storage surges

The storage technology used for the world's consumer devices is mostly taken for granted by consumers by the increasing desire for smaller, lighter gadgets and the advent of the cloud could provide a boost for the solid-state drive providers. Luc Van Coppenolle: "By the end of 2012, solid state storage for small devices such as MP3 players, smartphones and tablets will likely account for 90 per cent of the market - compared to 20 per cent in 2006 - and 15% of the laptop and netbook segment. Even the data center market could turn to smaller, cooler, power-sipping solid state drives as an alternative to more traditional hard disk drives". The technology, which builds storage onto silicon chips, should benefit from savvier consumer behaviour that will start to pay more attention to how much storage they actually need on specific devices, particularly as more cloud-based storage services become available.