23 (118) 2016
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A breakthrough year for ‘thinking’ computers

Deloitte, www.Deloitte.com/pl
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80 out of 100 leading enterprise software firms set to develop cognitive technologies this year

In the next 12 months, the number of enterprise software manufacturers using cognitive technologies such as cognitive imaging, natural language processing and machine learning in their products will increase by a quarter. Cognitive technologies make data available to computers allowing them to reason, learn and plan. According to the 15th Global TMT Predictions report prepared by Deloitte, the number of Gigabit per second (Gbit/s) Internet connections will surge to ten million by year-end, a tenfold increase of which about 70% will be residential connections.

“The Global TMT Predictions identify the key global developments over the next 12-18 months in technology, media and telecommunication. Previous reports have shown how accurate the TMT predictions are. Predictions for this year to a great extent also apply to the Polish market which is growing as fast as developed markets. The trend related to the future of graphene has its origins in Poland. Scientists from Polish universities have made great contributions to this innovative material which the whole tech industry is setting its hopes on,” says Jakub Bojanowski,  partner, TMT leader, Deloitte.

Cognitive technologies have been used in IT successfully for a few years. They include digital image recognition, natural language processing and machine learning which enable machines to reason and plan. Netflix, an online movie rental service which has entered the Polish market, is an early example of the use of cognitive technologies. Netflix uses them to predict which movies and TV series the customers will like on the basis of their previous experience. Associated Press has embedded cognitive technologies in its software which makes machines capable of preparing simple newswires.

Deloitte predicts that cognitive technologies will transform software for enterprises this year, with 80 of the top 100 enterprise software companies using cognitive technologies in their products. Representing a growth of 25% compared to 2015, this will unleash the potential of the Internet of Things (IoT), and may even transform computing as we know it over time. While cognitive technologies may get less immediate attention from consumers, they are likely to be much more important over the long run for enterprises and for consumers alike.

Deloitte also predicts the dawning of the Gigabit Internet age. The number of gigabit-per-second (Gbit/s) internet connections will surge to ten million by year-end, a tenfold increase, of which about 70% will be residential connections. Rising demand will be fuelled by increasing availability and falling prices. Looking further ahead, about 600 million subscribers may be on networks that offer a gigabit tariff by 2020, representing the majority of connected homes in the world.

Deloitte’s experts have also looked at the smartphone market, more specifically, the used smartphone market. In Deloitte's estimates, in 2016 consumers around the world will sell outright or trade-in approximately 120 million used smartphones, generating more than $17 billion for their owners. This is a marked increase from the 80 million smartphones traded in 2015 with a value of $11 billion. According to Deloitte, 10% of premium smartphones ($500 or higher) purchased new in 2016 will end up having three or more owners before being retired.

The analysis by Deloitte shows that the way we use smartphones today has also changed. Deloitte experts predict that around a quarter of all smartphone users in developed markets will not make any traditional phone calls in a given week in 2016. They call these individuals ‘data exclusives’. They have not stopped communicating, but are rather substituting traditional voice calls for a combination of messaging (including SMS), voice and video services delivered ‘over the top’.

Smartphone users share their experiences and memories online in large numbers. Deloitte predicts that in 2016, 2.5 trillion photos will be shared or stored online, a 15% increase on the prior year. Over 90% of these photos will have been taken on a smartphone; digital SLRs, compact cameras, tablets and laptops will collectively contribute the remainder. This estimate does not include the trillions of photos that remain on a devices’ memory.

Additional highlights of this year’s TMT Predictions to affect the marketplace in 2016 include:


  • Women in IT jobs: it is about education, but it is also about more than just education – By the end of 2016 fewer than 25% of IT jobs in developed countries will be held by women. This figure is about the same as 2015, and may even be down.

  • Mobile touch commerce emerges – The number of individuals who use a third party touch-based payment service to make a purchase on their mobile devices (smartphones and tablets) should increase 150% to reach 50 million regular users in 2016. So far the numbers of transactions made on retail sites have remained scarce, due mostly to laborious payment processes.

  • Graphene: Research now; reap next decade – While the total value of the graphene materials market in 2016 is likely to be in the low tens of millions of dollars, R&D spending for the year is likely to be in the hundreds of millions of dollars. In the medium-term, graphene may be incorporated into products worth many billions of dollars of value per year. But it could be decades before this material’s potential is fully realised.

  • Millennials may not be first the post-PC generation – While Millennials are the smartphone generation, trailing Millennials (those 18-24 years old) are anticipated to be the most pro-PC of all age groups in 2016. An average of over 85% of trailing Millennials in 13 developed-world countries had access to a laptop in 2015. This data suggests 18-24 year-olds see smartphones and PCs as complements, not substitutes, which may in part be due to the decreased costs of laptops (there are many devices for less than $500 available on the market.


  • VR is approaching – Virtual reality (VR) will have its first billion dollar year in 2016, with about $700 million in hardware sales, and the remainder from content.  A report estimates sales of about 2.5 million VR headsets and 10 million game copies sold.

  • Mobile ad-blockers – Only 0.3% of all mobile device owners will use an ad blocker by the end of 2016. This is likely to place less than $100 million (0.1%) of the market at risk.

  • Mobile games: Leading, but less lucrative - In 2016 mobile (smartphone and tablet) will become the leading game platform by software revenue, generating $35 billion in revenue up 20% from 2015. This compares to $32 billion for PC games and $28 billion for console games, up only five and six% respectively from the previous year. However, average revenue per game by platform will vary significantly.

  • eSports: Bigger and smaller than you think – Online, sports will generate global revenues of $500 million in 2016, up 25% from about $400 million in 2015, and will likely have an audience of regular and occasional viewers of close to 150 million people. This revenue is only a fraction of league revenues in major sports such as football, American football, basketball, baseball, or ice hockey, which range from $4 billion up to $30 billion.  

  • European football scores $30 billion - The European football market will reach $30 billion for the first time for 2016/2017, an $8 billion increase relative to 2011/2012, and a compound annual growth rate of 7%.

  • Cinema-going to shrink - In 2016 the value of movie theatre admissions in the US and Canada will fall by about 3% to about $10.6 billion, with about 1.3 billion tickets sold.

  • US TV: erosion, not implosion - In 2016 the US traditional television market, the world’s largest at about $170 billion in 2016, will see erosion on at least five fronts: the number of pay-TV subscribers; pay-TV penetration as a percentage of total population; average pay-TV monthly bill; consumers switching to antennas for watching TV; and live and time-shifted viewing by the overall population, and especially by trailing Millennials 18-24 years old.


  • VoLTE / VoWiFi: capacity, reach and capability - 100 mobile operators worldwide will be offering at least one packet-based voice service at the end of 2016, double the amount year-on-year, and six times higher than at the beginning of 2015. An estimated 300 million customers will be using Voice over WiFi (VoWiFi) and/or Voice over LTE (VoLTE), double the number at the start of the year, and five times higher than at the beginning of 2015.

Now in its 15th year, Deloitte’s annual global TMT Predictions provides a 12-18 month outlook on key trends in the technology, media and telecoms industry sectors worldwide. Full details about the global TMT Predictions are available here: www.deloitte.com/tmtpredictions

The TMT Predictions are based on worldwide research supported by in-depth interviews and input from Deloitte member-firm clients, Deloitte alumni, its industry analysts, leading TMT executives, and thousands of Deloitte member firm TMT practitioners across its global network.  The focus of Predictions varies from year-to-year, but one theme appears constant: the impact of TMT on our behaviour steadily deepens.  

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