According to the recently released Deloitte Technology, Media and Telecommunications (TMT) Predictions 2013 report:
- A record one billion smartphones will be shipped in 2013
- Mobile advertising will split into two categories (tablets and smartphones)
- Several LTE Networks are expected to launch in the MENA region throughout 2013
- More than 90 percent of user-generated passwords will be vulnerable to hacking in a matter of seconds.
The report, launched in collaboration with Dubai Media City, is compiled annually through a series of interviews with Deloitte clients and practitioners. It highlights the emerging issues most likely to affect the TMT industry over the coming year.
“This is the first time Deloitte is presenting a Middle East version of the TMT predictions, directly relevant to the region. We believe it is vital for our local clients and industry practitioners to understand the drivers that are shaping this sector across the region. Hence, these 10 TMT predictions have been formulated to highlight where we are heading.” — Santino Saguto, partner and TMT Leader, Deloitte Middle East,
Top 10 predictions by TMT, most likely to have an impact on the Middle East marketplace in 2013.
• Mobile advertising — a category including tablets, smartphones and feature phones — should grow by 50 percent to reach USD 9bn globally. In the Middle East, Deloitte predicts digital ad spend will grow at a CAGR of 35 percent in the region measured from 2011 to 2015 reaching approximately 10 percent of total advertising spend by 2015. These estimates are conservative when viewed in the context of markets such as the UK, where the shares of the digital platform in total ad spend in 2011 stood at 32 percent.
• A billion smartphones should ship for the first time ever. Usage, however, will vary, with a growing number of smartphones owners (about 400 million out of an installed base of 1.9 billion) rarely or never connecting their devices to data. In 2012, 40 million smartphones were shipped in the Middle East, representing a growth of more than 30 percent over 2011 shipments. More significantly, smartphone penetration across several key markets is already in excess of 50 percent.
• A strong year for LTE, but end-game strategies of regional operators are as yet unclear. Several LTE launches are expected in the region for 2013, however operators will need a clearly thought-out value proposition for LTE.
• Dual screening readies for prime time. Evidence of ownership of multiple screens in the region but television remains the predominant screen for viewing video content.
• PC is not dead, it’s about usage and not units. PC sales will remain strong and drive significant internet traffic.
• The looming spectrum shortage. Spectrum harmonization and re-farming critical to growth.
• Over-the-top (OTT) may lift broadcasters and distributors moreso than pure plays. Several OTT models are prevalent in the Middle East, but broadcasters are likely to emerge as the most likely winners.
“I am pleased that Dubai Media City is able to support the launch of Deloitte’s Middle East TMT Predictions 2013. As a thriving community that has become home to many global, regional, and local media organizations, it is our duty to support research and study into the future of our sector. Identifying the key trends that will shape our industry over the near, mid, and long term.
This report’s findings contain many valuable insights that will be able to serve as a guide to many operators whether they are in advertising, technology, broadcast production, or content development.” — Mohammad Abdullah, Managing Director, TECOM Investments Media Cluster
“This year’s predictions cover a range of topics, from the continued dominance of personal computers (PCs) despite inferior sales relative to smart devices, the developments around LTE, and data access, to smartphones and the vulnerability of passwords.
With the splitting of ‘mobile’ advertising into separate mobile and tablet categories, advertisers should begin to consider new forms of advertising specific to smartphones, such as interactive videos or game functionality, and tablets meanwhile, may borrow content created for PCs as well as usage formerly undertaken on PCs.” — Paul Lee, Director, Deloitte TMT Knowledge & Research
In addition, the report has also predicted an upsurge in Long Term Evolution (LTE) mobile networks across the GCC, which experts say will need to be combined with a better understanding of end-game strategies from the new technology. In addition, leading operators across the region are likely to devote greater effort towards managing data profitability.
This year will be the first year in which LTE thrives across multiple markets. The subscriber base will triple to 200 million by year end, and those on LTE tariffs will represent about 10 percent of all service revenues.
It has also been predicted that the smartphone sector may globally generate USD 4.9 billion in revenues in 2013, while advertising on tablets may generate USD 3.4 billion. Revenue per unit, reveals a different dynamic, smartphone display ad revenues are forecast at USD 7 per tablet and USD 0.60 per smartphone (including in-app ads).
In the Middle East and Africa (MEA) the tablet market grew by 90 percent year on year – reaching a total of 1.36 million units in 2012, fourth quarter. Factors contributing to such a prediction include the availability of cheaper tablet models in the market, increased consumer demand and reduced product prices.
Long Term Evolution Global Forecasts Infographic by Wireless Intelligence