DELOITTE HAS released its seventh annual predictions 2008 report, a series of three reports that examine emerging developments and predict how they will shape the technology, media and the telecom sectors. The Deloitte predictions report explores a number of emerging TMT trends that will impact the markets in 2008.

 

This series by Deloitte has been designed to provide a diverse selection of views and thoughts that challenge, inform and engage industry leaders and executives. Each report recommends ways to best take advantage of the emerging trends in the sector. The 2008 series are based upon an extensive research process involving discussions with industry analysts and financial institutions; conversations with senior executives from the TMT industry, feedback from senior alumni and inputs from Deloitte’s strong global TMT practice.

 

Some of the key trends cited in the report are:

 

From anonymity to authenticity – It is often argued that one of the great benefits of the web is anonymity. However in 2008, there may be an increasing clamour from regulators, users and online traders, for internet to provide authenticated identity every time people undertake any transaction via the web. A move to process online authentication could ultimately be good for both business and users.

The rising value of digital protection – In 2008, some owners will spend more on virus protection, online backup and insurance to enhance the lifetime of their computer. This trend could extend beyond the PC to other devices such as MP3 players, mobile phones, DVRs, external hard drives and others, as all these forms hold valuable data.

Innovation blowback – Technology industries are demonstrating increased interest and investment in developing products to reach large, low-income populations in emerging economies such as India, China, and Latin America. In a phenomenon called innovation blowback, we can also expect to see innovative products, services, or management practices be introduced back into western economies in 2008.

Obstacles ahead for the online advertisement – Online advertising is expected to generate US$41.6 billion in revenue in 2008 with major events like the World Cup and Beijing Olympic games adding an impetus to online ad spending. However, despite the positive outlook, it has been noticed that growing antipathy to online advertisements and behavioral patterns is presenting obstacles to online advertising. The sector could fight back by methods such as testing various types of online advertisements with consumers, experimenting with radically new forms and formats, and considering online advertising as an element of the media mix within a campaign rather than as a solitary platform against traditional media.

 

Long live traditional television, thanks to Internet television – The global traditional television sector, despite the occasional shock, should remain in good health throughout the year, and there is a good chance that Internet television will have contributed to traditional television’s fortunes. 

 

Overcoming online privacy may not mean the end of counterfeit content – Steady growth in the number of broadband connections around the world has allowed online piracy to grow and the increasing speed of broadband connections has made movie, television and software piracy feasible. The Chinese authorities attach great importance in cracking down online piracy by closing down illegal websites, imposing fines on violators and controlling "virtue communities" of the Internet. But the rapid growth of the Internet and wider access will continue to pose challenges to anti-piracy efforts.

 

Prey becomes predator – While the credit crunch may dampen the overall pace of mergers and acquisitions activity in 2008, the will to grow via acquisitions is likely to remain strong in the telecommunications sector. In China, foreign ownership of joint-venture companies that provide basic domestic and international telecom services in China was officially raised in December 2007 from 35 per cent to 49 per cent. However while establishing this, developed-world mobile operators may be looking for acquisitions, in 2008, the tables may be turned. The leading operators in emerging markets may transform themselves from prey to predator.

 

Capitalise on the $10 mobile phone – Lower priced mobile handsets are popular gifts in China but the major opportunity for the $10 mobile phone may be the market for machines, rather than for people. Lower priced handsets are likely to increase overall mobile penetration rates but as global mobile ownership approaches 50 per cent. Embedding mobile phone functionality in machines from ATMs to vending machines could be a potential market for the mobile industry.

 

Giving mobile GPS direction – Prices for GPS functionality have fallen to such an extent that a growing number of mobile phones now incorporate GPS navigation. The number of devices that incorporate the technology is expected to grow rapidly in 2008. The mobile industry may overlook several critical differences between how satellite navigation is used in vehicles and how people on foot may use it. Thus, while a growing number of GPS-enabled mobile phones may be shipped and sold in 2008, aside from the novelty, their use may be infrequent in the near future.

 

Exploiting new media’s growing need to communicate – In 2008, digital communications will become more varied, vibrant and vital to the way we live than ever before. New media companies, such as social networks, synthetic worlds and blogs, are likely to offer the services through which, newer forms of communication are initiated. However, the telecommunications sector should consider how to earn a greater share of revenues from communications in new media websites.

 

The challenges and opportunities of water scarcity – In 2008, it is estimated that more than one billion people will lack access to clean water and more than double that number will lack access to sanitation. China’s State Council indicated in December 2007 that even if steps to improve conservation are undertaken, the country’s thirst for water is expected to approach the limit of the available resources by 2030. The technology sector can play a major role in addressing this by looking at how their products and solutions can add to existing supply, improve management of existing supply and reduce current usage.

 

The living room moves closer to being public enemy number one – The proliferation of technology in the living room is creating its own distinctive carbon footprint and forecasts estimate that consumer electronics’ share of household electricity usage could reach 50 per cent by 2020. The media and consumer electronics industries should consider how the carbon footprint of the living room, could be reduced by developing energy efficient products to reduce unnecessary power consumption.

 

Let there be Light Emitting Diodes – In 2008, the LED should become commercially viable and its challenges with regard to intensity and colour should be resolved. While the upfront cost of an LED is high, its long life makes the total cost of ownership more than competitive.

 

From zero to green hero: The renaissance of nanotechnology – Nanotechnology can be used to generate clean power, reduce existing power consumption, provide drinkable water, clean contaminated land, reduce harmful emissions and enable long-life portable power. According to the Organisation For Economic Cooperation and Development (OECD), China already has nearly as many published works in nanotechnology as the US. The investment and the progress of nanotechnology is expected to provide solutions for environmental and energy challenges facing the country.

 

Commenting on the findings of the report Roopen Roy, managing director, Deloitte & Touche Consulting India Pvt Ltd, said, “Costs are becoming an important issue with companies. With the likelihood of the US slowdown, there is certainly going to be a reduction in technology spends and resistance to price increases. Indian companies will, therefore, have to start looking at innovative ways to meet their client needs.”

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