Deloitte released its 2016 Canadian Technology, Media & Telecommunications (TMT) Predictions recently, rolling out their forecast for a variety of tech trends over the coming 12 to 18 months, mainly concentrating on the effect that mobile technology is likely to have on everything, but also touching on topics including retail, gaming, ad-blocking, virtual reality, television, cinema, artificial intelligence, home internet speeds, and women in the IT workplace.
The consulting firm’s TMT predictions are based on research supported by client, industry analyst, and business leader interviews with more than 8,000 Deloitte member firm practitioners.
Deloitte claims that its 2015 TMT predictions were more than 80% accurate.
Unsurprisingly, the report speculates on the digital habits of the ever elusive millennial demographic, about whom the report makes at least one startling claim, which is that despite their reputation as the first generation of mobile natives, you will have to pry their personal computers from their cold, dead hands.
18- to 24-year-olds, or “trailing millennials” as they’re called, have far less intention of abandoning their personal computers than other age groups, suggesting that they regard mobile technology as complementary to personal computers, rather than looking at their collection of devices as a zero-sum game.
A 2015 Deloitte survey found that 25% of Canadians between 18 and 24 hoped to get a new laptop in the coming year, higher than any other demographic.
So that’s a surprise. It may be better to think of Millennials as the both/and generation, rather than the either/or binary generation. Rather than abandoning their laptops and large computers, they’re the kind of people who hand the menu back to the waitress with the instructions, “Yes, and a cup of coffee.”
With the retail sector convulsing in the face of mobile tech disruption, Deloitte’s report predicts a 150% increase in the number of Canadians using a third-party touch-based payment service to buy something on their mobile device, to over 1 million.
“Last year mobile payments began to go mainstream,” said Duncan Stewart, Director of TMT Research at Deloitte in Canada.
“This year we’re seeing a continuation of that trend, whereby it’s getting easier and easier to use your phone to make secure transactions. The check-out process is made much simpler if all you need is your fingerprint to authenticate and authorize payment in just one or two touches. The days of filling out screen after screen of payment card details and both home and shipping addresses, we predict, are numbered.”
According to Deloitte, 29% of Canadians were browsing shopping websites on a weekly basis as of mid-2015, with ony 6% making a purchase.
The hope for retail is that a growing trend in “touch commerce” will result dramatically reduced cart abandonment in the coming year.
“What we’re seeing in terms of the bigger picture for 2016 is that mobile devices continue to be an important – even vital – part of our daily lives, capturing a significant amount of our time and money, but their influence only extends so far,” said Robert Nardi, Partner and National TMT Leader for Deloitte in Canada. “For the majority of Canadians, our smartphones and tablets complement or enhance rather than replace the traditional products we’re used to or, only slightly alter our behaviours.”
The information regarding gaming is important for the Canadian tech sector, owing to the fact that Canada has the third largest gaming industry in the world, which contributes the equivalent of $2.3 billion U.S. to GDP and employing the equivalent of 20,000 full-time jobs.
Deloitte’s report predicts that 2016 will be the year that mobile takes over as the leading games platform by software revenue, surpassing console and PC platforms and reaching 37% of total gaming sales, up 20% from 2015, compared with 34% for PC games and 29% for console games, each up 5% and 6% respectively.
The only problem for the gaming industry as mobile platforms take over is the loss of revenue, since PC and console users are significantly higher value than mobile gamers.
Average revenue per mobile game is only $40,000 ($20 per mobile game player) compared with a much more lucrative $2.9 million per PC game ($50 per player) and $4.8 million per console game ($145 per player), all U.S. dollar figures.
Evidently, the less serious gamers are about their platform, so their spending also decreases dramatically.
And as well as the gaming trend bodes for Canada’s gaming industry, the Deloitte report reports that people are actually getting out of their house only slightly less than they did in 2015 and going to the movies, with movie theatre admission revenues set to drop 3% to approximately $10.6 billion U.S., with 1.3 billion tickets sold.
The report also prognosticates that mobile ad blockers will amount to far less of a threat than the industry feared, placing less than $100 million U.S. of revenue at risk in 2016, or just 0.1% of the $70 billion global advertising market.
Deloitte predicts that 0.3% of Canadian mobile owners will use an ad-blocker in 2016, with 40% of Canadian mobile devices likely to have native ad-blocking built in.
And because the majority of time spent on a mobile device is app-based, ad-blockers never come into play unless a browser is involved, which happens much less often on mobile.
“For the majority of Canadians, our smartphones and tablets complement or enhance rather than replace the traditional products we’re used to or, only slightly alter our behaviours.” – Deloitte Canada Partner and National TMT Leader Robert Nardi
Despite a couple years of hype, virtual reality headset technology may still not yet be ready for prime time, with hardware and software sales totaling $1 billion U.S. globally and less than $30 million of that in Canada, according to the report.
Consumers, it seems, are perfectly happy watching the TV’s that they’re familiar with.
The report sees some erosion, rather than the full-scale collapse envisioned by cord-cutters, in the North American TV market, with fewer pay TV subscribers, a lower average pay TV monthly bill, and a rise in antenna viewing.
Compared with our U.S. counterparts, who watch 320 minutes average television per day, Canadians watch about 240 minutes of both live and time shifted TV daily.
Enterprise software will see an artificial intelligence coming of age by the end of 2016, with more than 80 of the world’s 100 largest software companies, by revenue, integrating cognitive technologies into their products, a 25% increase on the prior year.
Deloitte predicts that by 2020, that figure will move up to 95 from 80, with machine learning, natural language processing and speech recognition becoming standard features in enterprise software.
For the home, Deloitte predicts that the number of gigabit per second (Gbit/s) Internet connections available to Canadians will surge to over four million by the end of 2016, but that only 100,000 homes will subscribe to the service during the first year, which represents less than 3% of customers on those networks.
Finally, Deloitte outlines a discouraging bordering on dismal situation for women working in the IT sector, which doesn’t look to be improving any time soon.
22% of IT jobs in Canada are held by women, slightly behind the U.S. at 24%.
The education pipeline is scarcely better, as 25% of Canadian computer science students are women, which is actually down from 27% in 2009.
This is a situation that can either work itself organically, ensuring either the status quo or actual regression into the foreseeable future.
Or perhaps it’s time to sprinkle a little of that “Because it’s 2015” fairy dust on the situation by implementing some policy on matters of education, the recruitment and hiring processes, retention, salary and promotion for women in IT.
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