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High profile acquisitions and market consolidation will fundamentally change the telecoms and tech market in the next few years as companies such as BT, Google and Apple makes steps to dominate, according to global analyst firm CCS Insight’s 2016 predictions report.
With multi-play services at the heart of a booming tech industry and heightened competition in an increasingly saturated market, CCS Insight expects we will see moves by the world’s leading technology companies as they look to strengthen their position and move into new markets. As such the global analyst firm predicts a possible acquisition between BT and ITV, as well as Apple buying either Box or Dropbox.
The analysts also believe that virtual reality technology will continue to evolve with web companies like Facebook, Amazon and Netflix driving the creation and delivery of virtual reality content. Furthermore, in 2016 wearables will continue to dominate with Google developing a lightweight version of Android Wear to offer low-cost fitness bands.
Shaun Collins, CEO and founder of CCS Insight, said: “The next few years are set to see more massive shake ups within the media and telecoms technology sector, with the continued consolidation of the telecoms market and increasingly sophisticated consumers forcing tech companies to push the boundaries and provide a next level of innovation.”
“Our predictions, presented to customers during CCS Insight’s annual predictions event, forecast a dynamic and exciting few years ahead for businesses in the tech industry.” Collins continued: “With connectivity as important at the beginning of the 21st century as electricity was the start of the 20th, we would be excited to see stronger policies put in place to mandate a minimum broadband speed and acquisitions by dominant players that will provide consumers with the multitude of services that they crave.”
Here’s an overview of some of CCS Insight’s additional predictions for the media and telecoms industry:
BT buys ITV by 2018. BT needs to broaden its content rights position beyond sport. In addition to a slew of rights contracts, ITV provides BT with a free-to-air platform for some of its programming, an established channel to advertisers, and an attractive source of content in the broadcaster’s ITV Studios arm.
The European Commission imposes plans to mandate a minimum broadband speed of 30 Mbps for all citizens by 2020. In an effort to close the gap between Europe and leading markets such as Japan and South Korea, the commission takes a stronger line in enforcing existing targets. It justifies the decision on the basis of long-term economic benefit and a need to support new services such as high-definition videoconferencing. Unsurprisingly, the move is met with disdain from network operators, and concerns about funding and implementation from the wider telecom industry.
Google launches a mobile service in a leading European market by 2017. Following the launch of Project Fi in the US, Google turns its attention to Europe through an MVNO deal with a regional player such as CK Hutchison. Google’s main aim is to push local providers to offer better mobile broadband services that will ultimately help greater usage of Google services. Candidate markets include the UK, where appetite for mobile data is among the highest in Europe, or Italy, where Internet penetration severely lags other developed European markets.
Web companies drive the creation and delivery of professional virtual reality content. Although film studios use 360-degree videos to promote traditional movies, the likes of Amazon, Facebook, Google and Netflix have clearer opportunities to generate revenue from virtual reality content. In addition, Web players have a greater openness to risk and are more willing to embrace new technology. Facebook and Google are the market-makers for virtual reality, controlling the full spectrum of assets needed for success in the field: hardware, software, content, distribution networks, advertising and more.
Fitbit becomes the first wearable company to sell 100 million units. It achieves this milestone by the end of 2017. Fitness devices have become the most popular type of wearable; they will account for about half of all wearables sold in 2015. Fitbit has capitalised on its pioneering role to become synonymous with the product category in some markets. It is the most-recognised fitness tracker brand among US consumers, according to our research. Despite the huge sales volumes associated with fitness bands, smartwatches will eclipse them in value terms.
In 2016 Apple buys Box or Dropbox to extend iCloud into an enterprise service. Apple uses some of its cash stockpile to acquire a variety of providers of business-orientated services. The move builds on Apple’s relationships with IBM and Cisco Systems and its development of the iPad Pro. Offering a cloud storage service optimised for businesses is a logical extension of Apple’s service portfolio.
In 2016 a phone-maker designs its smartphone packaging to double as a virtual reality headset. The move builds on Google’s Cardboard design, which allows simple headsets to be created from inexpensive materials. It follows similar efforts by Kellogg’s in New Zealand in 2015 to enable consumers to turn its breakfast cereal packaging into virtual reality devices using lenses supplied in the box.