Warc Blog

Tablets, SMS and pay-TV lead the way

15 January 2014
LONDON: The tablet market will become increasingly stratified in 2014, while instant messaging volumes will surpass SMS and more households will double up on pay-TV subscriptions.

These are just some of the forecasts made by Deloitte in a new report, Technology, Media and Telecommunications Predictions 2014, in which the consulting firm sets out to identify "critical inflection points" that will inform strategic thinking over the coming months.

In the case of tablets, it expects that by the end of the first quarter compact tablets – those with screens smaller than 8.5 inches – will have overtaken the 'classic' tablet with a global installed base of 165m against 160m.

Deloitte likened the evolution of the tablet market to the stratification already seen in the smartphone market but said it was "possibly ultimately more profound", with a diversifying ownership profile and multiple ownership.

A related development will see sales of phablets – defined as smartphones with a screen measuring 5.0-6.9 inches – growing to account for 25% of smartphone shipments, or double the figure for 2013, with most of this coming at the low end of the size range.

Noting that phablet sales were rocketing in Asia-Pacific compared to North America and EMEA, Deloitte suggested a number of reasons for this, including their use as mobile gaming devices or, more prosaically, the difficulty of texting or messaging in some Asian scripts on a small smartphone screen.

The daily volume of such communications is projected to exceed 70bn daily in 2014, with instant messaging services on mobile phones (MIM) accounting for the bulk of them. At 50bn, MIM will be more than double the 21bn messages sent by a short messaging service (SMS); just two years ago, the ratio stood at 1:1.

But Deloitte expected that SMS would generate significantly greater revenues – $100bn compared to the $2bn of MIM – thanks to its ubiquity, being common to all phones, its relative infrequency of use and its low price.

A contrast to the "cord-cutting" represented by the above mobile devices is the continued importance of television. By the end of 2014, Deloitte anticipates that around 50m homes will have two or more separate pay-TV subscriptions, while a further 10m will have access to premium programming as part of a subscription to a separate service such as broadband.

Adding a subscription video-on-demand service on top of existing pay-TV, the report noted, did not necessarily mean increased household expenditure as it often simply substituted spending on DVD rental and purchase.

More interestingly, it also posited a situation where individual members of a household could be adding services without the main billpayer's knowledge so that not everyone in a home might know the full extent of services being subscribed to.

Data sourced from Deloitte; additional content by Warc staff

 
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