05/02/2019 – Science & Technology / Innovation / AI / 5G / Smart Tech / Deloitte
Access all areas: Deloitte’s 2019 tech predictions
From AI to 5G and smart speakers, the barriers to new tech are falling away – boosting connectivity and the prospects for further innovation in the process, finds Deloitte’s new tech trends report for 2019.
For decades, Moore’s Law reliably predicted the rate of silicon scaling, with computing power roughly doubling every 18 months, to the extent that the smartphones we all carry in our pockets today pack far more punch than the computing power that first sent astronauts to the moon. And while the technological progress in computer chips is by now well known, it isn't a special case. The capacities for magnetic data storage, Internet backbone bandwidth, wireless data devices and more have experienced similar exponential growth. And such dynamics will facilitate a number of tech trends in 2019, according to Deloitte’s 18th edition of ‘Technology, Media & Telecommunications Predictions’.
Speaking volumes: A boost to smart speaker revenues
One of the fastest-adopted new devices in history, smart speakers are continuing to fly off shelves – selling 164 million units at an average selling price of US$43 per unit. In 2019, total industry revenues will be an estimated US$7 billion – up 63 per cent from 2018.
While the robust sales performance forecasted for 2019 will actually represent a deceleration from the prior year (in Q2 2018, sales were up 187 per cent year-on-year), smart speakers still have, literally, a world of opportunity for growth. While 95 per cent of sales in 2018 came from the US and the UK, much future opportunity will come from expansion into non-English-speaking countries.
In some contexts, voice can be the most natural, productive and convenient way to communicate with a computer when one’s hands are busy – operating machinery, typing, holding an infant, or cooking, for example. Whilst driving too, voice may be the safest option. Above and beyond all such applications, smart speakers could prove a transformational tool for the 250 million visually impaired people worldwide (36 million of whom are fully blind).
As such, potential demand for smart speakers could well reach into the many billions of units, possibly even higher than for smartphones, predicts Deloitte. A speaker could be installed in every room in a house or hotel, every office in a building, every classroom in a school, or every bed in a hospital. In fact, several hotel chains have already undertaken mass deployments of smart speakers, whose applications include serving as in-room concierges. The Marriott International Group plans to deploy Amazon’s and Alibaba’s smart speakers in some of its hotels; 100,000 units will be deployed in China alone. Meanwhile, The Wynn Las Vegas has installed smart speakers in all 4,748 of its rooms. If this trend continues, many of the world’s estimated 187,500 hotels and 17.5 million guest rooms could feature smart speakers or voice control within the next decade.
Drive-through restaurants could use voice automation to take orders, freeing up workers from having to manually process them, while a hospital in Sydney, Australia, has piloted the use of smart speakers as an upgrade to a bedside call button.
Indeed, in many workplaces, including theatres, factories, chemical labs, and restaurant kitchens, smart speakers may make operations safer and more precise than they are today. Deloitte Global believes that in the long term, the number of smart speakers in the workplace might exceed the number in homes – and the value of the tasks they will undertake may be orders of magnitude greater than playing music, hearing the weather forecast, or asking what zero divided by zero is.
Nevertheless, the industry segment will have to overcome looming obstacles to reach its full growth potential. Speech recognition technologies continue to improve, but wider language support will need to be developed for the technology to be inclusive and experience global adoption, advises Deloitte.
From expert-only to everywhere: The democratisation of AI
Deloitte also predicts that in 2019 companies will further accelerate usage of cloud-based artificial intelligence (AI) software and services. Among companies using AI, 70 per cent will obtain AI capabilities through cloud-based enterprise software, 65 per cent will create AI applications using cloud-based development services, and by 2020 the penetration rate of enterprise software with AI built in, and cloud-based AI development services, will reach an estimated 87 and 83 per cent respectively.
The cloud will drive more full-scale AI implementations, better return on investment (ROI) from AI, and higher AI spending. Across all countries, early adopters of AI are already seeing positive financial returns, reporting an average ROI of 16 per cent. This is a promising start for companies that are gaining experience with a rapidly evolving set of technologies. Importantly, in 2019 we’ll see the democratisation of AI capabilities – and benefits – that had heretofore been the preserve only of early adopters.
“So far, AI’s initial benefits have been predominantly accrued by ‘tech giants’ with extensive financial resources, strong IT infrastructure, and highly-specialised human capital,” says Paul Sallomi, Deloitte Global Technology, Media & Telecommunications industry leader. “However, the cloud will power increased efficiencies and better returns on investment, and we expect these benefits to rapidly extend beyond AI’s pioneers to the wider enterprise.”
Indeed, some AI development services are already getting so intuitive that developers don’t even need much specialised knowledge. For example, Baidu recently released an AI training platform called EZDL that requires no coding experience and works even with small data training sets.
Even for companies with significant resources, AI development platforms can help deliver industry-changing innovation. For example, Samsung Heavy Industries is using Amazon Web Services (AWS) to develop autonomous cargo vessels and the services needed to manage them.
Deloitte’s advice is to get what you can ‘off the shelf’. “AI applications focus on specific business processes, whether home-grown or available from a vendor. Where software firms have created an ‘off-the-shelf’ solution, companies should see if it suits their needs. Don’t ‘reinvent the chatbot’ unless it’s necessary,” the new report advises.
5G: The new network arrives
Fifth-generation (5G) wireless networks are expected to arrive in scale in 2019, providing faster connections for consumers and enterprises, and opening revenue opportunities for telecommunication companies.
Wireless operators have been pouring resources into 5G network development, with 72 operators currently testing this offering. And Deloitte expects 25 wireless operators to launch a 5G service in 2019, in at least part of their territories (typically cities) – a figure that will likely double by 2020. Furthermore, the research firm expects about 20 handset vendors to launch 5G-ready handsets in 2019 (with the first available in Q2). In total, over one million 5G handsets are expected to be sold in 2019, and that number could skyrocket to 15-20 million units by 2020. A further million 5G modems (known as pucks or hotspots) will be sold in 2019, and around a million 5G fixed wireless access devices will be installed.
Making a 5G-ready handset is more complicated than one might think due to differences in two critical components of a 5G versus a 4G phone: the radio modem and the antenna. Without going into the technicalities, those factors will mean a 5G-ready phone’s component costs in 2019 will likely be US$40–50 higher than for a comparable 4G phone – for a phone with relatively few networks worldwide to connect to, and likely with only narrow coverage even where available. There is one good piece of news, however: Battery life will likely be less of an issue than it was when 4G was launched, as chip-makers have said they expect battery life for the first 5G phones to be more or less in line with that of current 4G handsets.
Deloitte predicts that only one in five mobile connections will be 5G by 2025. “Wide-scale adoption of 5G devices will take time, but we believe 2019 will be the starting point for sweeping change for the wireless industry,” says Craig Wiggington, Deloitte Global Telecommunications sector leader. “5G can provide hundredfold increases in traffic capacity and network efficiency over 4G, and this has transformative potential on the future of connectivity worldwide.”
Welcome to the future: Other tech trends
China’s connectivity will nurture new digital business models: Deloitte predicts China will have world-leading telecommunications networks in 2019, and most likely in the medium-term. Its communications infrastructure will provide a foundation for at least three significant new bandwidth-hungry industries (machine vision, social credit, and new retail concepts) – each of which could generate tens of billions of dollars in revenue annually by 2024.
3D printing breaks through: Sales of enterprise 3D printers, materials and services from large public companies will surpass US$2.7bn in 2019 and top US$3bn in 2020, growing 12.5 per cent annually each year. The list of possible 3D-printable materials has more than doubled in the last five years, which (along with other improvements) has led to a rebound in the industry’s growth potential.
Evaluating quantum computing: Quantum computing will emerge as one of the largest new technology revenue opportunities over the next decade, but is unlikely to replace classical computers. The future quantum computing market is expected to be comparable to that of the supercomputer market – around US$50bn per year by the 2030s.
China expands technological prowess: Revenues for Chinese-manufactured semiconductors will grow by 25 per cent to US$120bn, solidifying China as a globally significant player in manufacturing and AI development. China will also have world-leading telecommunications in 2019, expanding possibilities for enterprise capabilities and interpersonal communication.
Now in its 18th year, Deloitte Global’s annual TMT Predictions provide an outlook on key trends in the technology, media, and telecommunications industry sectors worldwide. Visit Deloitte.com/predictions to download the full report.
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