Frost & Sullivan: Japan ICT outlook, Feb 2014, Mobile, Tablet, OTT, Applications, Global IT...

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Transcript of Frost & Sullivan: Japan ICT outlook, Feb 2014, Mobile, Tablet, OTT, Applications, Global IT...

  • 1. Frost & Sullivan 2014 ICT Market OutlookFebruary 2014

2. Agenda Global Telecom Trends for 2014 Global IT Trends for 2014 Conclusions & Q&A2 3. Agenda Global Telecom Trends for 2014 Global IT Trends for 2014 Conclusions & Q&A3 4. Top Ten Transformational Telecom Trends for 2014 Smart Devices Mobile OS HTML5 5G Infrastructure IoT/Wearables Big Data Analytics OTT Dominance New Investment Strategy Mobile Gaming4 5. Trend #1: Smart DevicesSmartphone User Penetration(%)Smartphone ownership stands at roughly 60% in most Western and Developed Asian markets, with Japan being roughly 55% in 2013. Selected Smartphone User Penetration Metrics, 2013E 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%Source: Frost & Sullivan.Smartphone migration will be the key revenue driver in the Japanese market in 2014. 5 6. Trend #1: Smart Devices (continued) Tablet ownership is still under 50% in all major markets and will continue to grow at the expense of the PC market. Tablet Penetration in Selected Markets, 2013E Tablet Penetration (%)45% 40% 35% 30% 25%20% 15% 10% 5% 0%Source: Frost & Sullivan.Tablet content ARPUs are four times that of smartphone content ARPUs. 6 7. Trend #2: Mobile OS Android will continue to be the most popular global mobile OS over the next five years although Apple will also grow steadily.Total Smartphone Users (m)Global Smartphone Users by OS, 2007-2017E 3500CAGR 2013-2017 Others +7.5%3000 2500Windows +40.1%2000 1500iOS +13.2%1000 500 0 2007200820092010 Android2011 iOS20122013Microsoft2014Others201520162017Android +13.5% Source: Frost & Sullivan.Windows will not emerge as a major platform until it becomes more open. 7 8. Trend #2: Mobile OS (continued) Despite the massive growth in Android, the OS remains heavily fragmented compared to iOS due to the large number of devices. iOS Users by Version, November 2013 Android Users by Version, November 2013 Previous Versions, 1% 2.2, 9% 4.3, 18% iOS 6, 19%2.3, 10%4.2, 17%3.2, 13%iOS 7, 80% 4.1, 17%4, 16%Source: Frost & Sullivan.iOS still accounts for 66% of global mobile application revenue. 8 9. Trend #2: Mobile OS (continued) Firefox OS has the most industry support among new web-based operating systems and despite setbacks Samsung is releasing smart devices using Tizen. Web-based OS Update, February 2014 OSFirefox MobileTizenUbuntuSailfish OSVendor SupportCarrier SupportAlcatel, LG, ZTE and Foxconn. Panasonic also announced plans to introduce Firefox OSbased smart TVs.As of 2013, Firefox OS-based devices were available in 14 countries in Europe and Central and South Americas. They initially targeted entry-level smartphone segments, or emerging markets where there was a transition from feature phones to smartphones, avoiding markets already dominated by iOS and Android.Samsung recently announced that its Galaxy Some major global carriers have recently exited the Tizen Association such as Gear 2 Smart Watch will Telefonica and France Telecom, while NTT DoCoMo has indefinitely delayed use Tizen instead of releasing a smartphone using the OS. Android. BQ and Meizu have both Vodafone, Three, China Unicom, EE, Deutsche Telekom, Korea Telecom, announced Ubuntu Verizon, and Telstra are among the carriers in the Ubuntu advisory group. smartphones for 2014. Smartphones can be ordered directly from Jolla Sailfish currently has no direct carrier support, employing a B2C strategy while online in the EU with India it will start encouraging Android users to migrate later in 2014. to follow in 2014. Source: Frost & Sullivan. 9 10. Trend #3 HTML5 HTML5 apps hold great promise in terms of supporting cross-platform support and lowering costs associated with enterprise application use and development. Native vs. HTML5 Application ComparisonHTML5 Hardware ReadinessSource: NTT.Source: iCapps.Source: visual.ly 10 11. Trend #4: 5G Infrastructure While LTE networks are being deployed in most countries, most subscribers are found in Japan, South Korea and the USA. Global Mobile Subscribers by Technology, 2009-2018Source: Ericsson. 11 12. Trend #4: 5G Infrastructure (continued) Although 5G networks are not anticipated until 2020 at the earliest, several vendors have already launched initiatives. Small cells will be a major part of deployments. Major 5G Initiatives VendorMobile Network Evolution5G Initiative Samsung is looking to be a first mover in 5G, and claims to have transmitted 1Gbps over a distance of 2km using a trial network. Huawei has announced US$600m in 5G investments between 2014 and 2018. It aims to transmit a peek speed of10Gbps. Source: Tektelic. 12 13. Trend #5 IoT/Wearables Extreme innovations in the wearable technology space will expedite the need for cloud storage. Physical Storage Capacity in HardwareElectronic TattooHP Compaq 6305 ProLenovo Thinkpad X240iPad AiriPhone 5SGoogle GlassSamsung Galaxy Gear0100200300400500600 Source: Frost & Sullivan. 13 14. Trend #6: Big Data Saturation of fixed broadband, smartphones and tablets coupled with IoT devices will cause an exponential growth in Internet traffic. F&S APAC Invoiced Sales, 2008-2012CAGRSource: NTT.Giving enterprises a huge amount of data which can be utilized. 14 15. Trend #7: Analytics Verizon Wireless is using big data and analytics to offer consumer data to a variety of B2C businesses.Source: Verizon Wireless. 15 16. Trend #7: Analytics (continued) Web 2.0 companies are also starting to use analytics, notably in order for predictive analyses which result in better-targeted e-commerce offerings. Amazon Anticipatory Shipping Patent Facebook Predictive Analysis ExampleSource: Amazon.Source: Facebook. 16 17. Trend #8 OTT Dominance Japanese users are the least likely in the world to share most personal data online.17 18. Trend #8 OTT Dominance (continued) NTT DoCoMos MOU has contracted by 40% in the last two years. NTT DoCoMo Blended MOU, 6/09-12/13 140Total Minutes of Use135 130 125 120LINE Introduced115 110 105 100Mobile MOU could decline to extremely low levels in the next five years. Source: NTT DoCoMo. 18 19. Trend #8: OTT Dominance (continued) In Japan the rise of LINE has caused a massive drop in NTT DoCoMos voice ARPU as users opt for free calling.Total Mobile ARPU(JPY)NTT DoCoMo Blended ARPU, 6/09-12/13 LINE introduced6,000 5,000CAGR Since LINE Introduction Smart ARPU +6.1%4,000 3,000Data ARPU 0.0%2,000 1,000Voice ARPU -4.7%0Voice ARPU ()Data ARPU ()Smart ARPU ()Source: Frost & Sullivan.NTT DoCoMo now reports a Smart ARPU to counterbalance voice declines. 19 20. Trend #9: New Investment Strategy In response NTT DoCoMo has recently made many non-traditional investments to counterbalance falling voice revenue. NTT DoCoMo Strategic RoadmapNTT DoCoMo Blended MOU, 6/09-9/13Source: NTT DoCoMo. 20 21. Trend #10: Mobile GamingMobile Game Spending Rates, 2013Mobile Game ARPUs, 201318.0%30Mobile Game ARPU(US$)Mobile Game Spending Rate(%)Applications both monetize stronger and with greater frequency in Japan more than anywhere else, making the market very attractive for developers.16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0%2520151052.0% 0.0%0JapanSouth KoreaUSAUKChinaJapanSouth KoreaUKUSAChinaSource: Industry Interviews. 21 22. Trend #10: Mobile Gaming (continued)Total Mobile Applications per PhoneJapan ranks third globally in app usage and first in paid app usage.Average Mobile App Usage by Country, 2013 Global Smartphone Users by OS, 2007-2017ESource: Google. 22 23. Trend #10: Mobile Gaming (continued) Japan is dominated by Puzzle & Dragons and LINE games, making it difficult for other app companies to gain traction in the market. Japan Top Grossing Mobile Apps, November 2013 Market Revenue Share (%)Next 990 Top Grossing Apps Love Live Clash of Clans Keri Hime Quest LINE Wind Runner LINE Chain Chronicle Colopl BaseballLINE Pokopang Quiz Wiz Puzzle & Dragons 0%10%20%30%40%50%60%Source: Appannie, Industry Interviews. 23 24. Trend #10: Mobile Gaming (continued) Extreme competition for market share has lead to very high Cost per Install (CPI) in Japan. Japan is also the only country in the world where mobile apps are aggressively promoted on TV, print, outdoor signage and celebrity endorsements. Mobile App CPI in Selected Markets, 2013EJapan Mobile Game Advertisements SubwayTelevisionBillboardCelebrityJapan CPI Ranges from US$15-US$20! Source: AdParlor.This means that it is very expensive for developers to gain users and they desperately need a more effective way of increasing app downloads. 24 25. Agenda Global Telecom Trends for 2014 Global IT Trends for 2014 Conclusions & Q&A25 26. Global IT Spending Market Overview Overall IT spending surpassed US$4 Trillion in 2013. IT budgets are again rising in most industries, and many new technologies are offering potential cost savings. Global IT Spending 2013 - US$4 Trillion Datacenters 4%Software 8%IT Spending Technology Drivers Technology Drivers Segment Datacenters Iaas, Intelligent DCs Software Saas, PaasHardware 18%IT Services Outsourcing, AnalyticsIT Services 25%ConnectivityBig DataConnectivity 45%BYOD, BundlingInternet of ThingsHardwareNaaS, SDNSource: Frost & Sullivan. 26 27. Top Ten Transformational IT Trends for 2014 BYOD Intelligent Data Centers Converged Infrastructure Software Defined Networking Cloud Computing Evolution 5G Wi-Fi 3D Printing Smart Contact Centers Security IT Department Transformation27 28. Trend #1 BYOD BYOD is becoming increasingly adopted, as 70% of enterprises offer at least some form of the service. Mobility budgets have been significantly cut in many cases. BYOD Adoption Survey, July 2013Source: Aruba Networks. 28 29. Trend #1 BYOD (continued) Fragmentation and security are the major inhibitors to the BYOD market. A 2013 survey found more than 12,000 Android devices in existence. Global Android Market Share by Device, July 2013Source: OpenSignal. 29 30. Trend #2 Intelligent Da