One billion people will upgrade their smartphones this year

Friday 23 January, 2015

Deloitte’s Technology and Media Predictions report anticipates small improvements in smart phone battery life; increased consumer spending on media content; and the growth of short-form video, in its latest TMP publication.

The predictions in the annual survey are amongst more than a dozen trends Deliotte thinks will be important for media this year.

Here are the main points of interest to the radio industry:

 

Smart Phones and Batteries

One billion people will upgrade their smartphones in 2015, generating $300 billion in sales.

“The quantity of smartphones bought as upgrades is unparalleled among consumer electronics devices. In 2015 smartphone sales will be greater in units and revenues than the PC, television, tablet and games console sectors combined,” says the report.

 

According to Deloitte’s research, undertaken in May‑June 2014, about seven in ten smartphone owners in 14 developed markets had upgraded their phone in the previous 18 months.  This is more frequent than for any other consumer electronics device,

 

The report expects only a 5% increase in charging capacity and says, “longer battery life is likely to remain a key factor for those choosing their next smartphone.”

Battery life is becoming an increasingly primal anxiety among digital natives, according to the report. “This anxiety is to an extent self‑inflicted: more frequent use of more power‑hungry applications on larger devices consumes more power.”

“Most new smartphone owners may still get a 15 percent increase in battery life, but this will mostly be due to other factors. New devices will benefit from efficiency improvements in the components that draw power from batteries (principally processors, radio transmitters and screens) as well as from better software.

 

“Further, we expect that the mAh of the average battery shipped in smartphones will increase by up to 25 percent in 2015, due to the increase in average size of smartphones sold, with battery capacity rising at a greater pace than screen area…

 

“Chip design is a major contributor to greater efficiency. Smartphones are built around a “system on a chip” (SOC), which combine much of the electronics of the mobile device onto a single integrated circuit… Power consumption of a ‘sleeping’ processor in a smartphone is a fraction of when it is awake: about 1 mW (0.001 Watts) versus 100 mW.”

 

The report gives some good tips for better battery life, including to charge your battery frequently and never let the battery drain completely. “A Li‑Ion battery that is typically discharged by 25 percent before being recharged should last about twice as long as a battery which is half depleted before being recharged.”

 

Short-form Video

Radio companies are increasingly seeing audiences and advertisers flocking to videos on their websites and the report says the trend towards short-from video is likely to continue. But it won’t replace TV.

“Deloitte predicts that in 2015 total time spent watching short‑form (under 20 minutes’ duration) video online will represent under three percent of all video watched on all screens. Short‑form revenues will be about $5 billion: by comparison long‑form TV content will generate over $400 billion from advertising and subscription revenues alone…

 

“Some stats seem to suggest that short‑form could usurp traditional long‑form television. One of the most successful TV shows in the US at present, Big Bang Theory, attracted an average audience of 17.5 million viewers in its most recent season, with each episode broadcast in a 30‑minute slot.173 In comparison, Korean star PSY holds the title for the most‑watched video on YouTube, Gangnam Style,174 which has amassed over two billion views since its release in 2012.175 PSY’s official channel has had almost four billion views…

 

“The top 100 YouTube channels generate over ten billion views per month globally. Yet despite these successes, short‑form generates a small percentage of all screen‑based viewing time, and an even smaller proportion of revenues.

Topics that generate hits for online videos include: dogs and cats doing cute things, music videos and children opening presents. This last topic has worked well for Disney, which supports a channel where parents can upload videos of their kids opening Disney toy presents.

But the report cautions against unregulated product placement in videos, and also makes the point that there are inconsistencies about the way online video consumption is measured, compared with TV audience measurement:

“With online video, the definition of a view is typically any request made to a server to play a piece of video. There is no agreed measurement of what constitutes a view, and a view could be anything from a millisecond to the entire clip. According to comScore’s data, the average length of a ‘view’ is about four minutes.  There do not appear to be any industry‑wide or national standards for measuring online video views.

“There is no certainty that a video is actually visible on a screen when it is playing; it may well be playing ‘under the line’, on a part of the page that is not visible on a screen. There is no data on how many people may be watching each view.”

 

Increasing consumer spending

The ‘generation that won’t spend’ is spending a lot on media content, says the report.

“Deloitte predicts that US and Canadian millennials will spend over $62 billion on media content in 2015. This is greater than the total spend on Internet advertising in the US and Canada,206 and as such represents a significant contribution to the media sector from the generation of 18‑34 year‑olds often accused of defaulting to unpaid sources of content.207 There are 83 million millennials in the US and Canada, and $62 billion of spending on media content equates to $750 each.

“These numbers may surprise given other trends and perceptions: haven’t millennials stopped buying CDs, subscribing to newspapers, or paying for cable TV? So how can 18‑34 year‑olds in these two countries spend an average $750 on media in 2015?

“The reality is that millennials are spending less on traditional media than they did in the past, and less than older generations, but they are still spending.”

While figures in this category are based largely on US and Canadian figures, the report makes the point that the trends are generally consistent in developed countries around the world.

Pay TV, Music and Computer Games are the top three media content categories bought by Millenials.

 

 

Download the full report here.

 

 

Image: Bloomua / Shutterstock.com

 

 

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