TORONTO – Completing purchases with a smartphone or tablet will be even easier this year due to the increasing popularity of mobile touch commerce, according to Deloitte’s 2016 Canadian Technology, Media & Telecommunications (TMT) Predictions, released Wednesday.
In 2016, the number of individuals who use a third party touch-based payment service to buy something on their mobile device (smartphone or tablet) is predicted to increase 150% to top a million users in Canada. Touch commerce compacts the time taken between browsing to transaction on a mobile phone or tablet from minutes to seconds, simplifying the check-out process. The result is likely to be a decrease in ‘cart abandonment’ in 2016, when consumers start buying something on mobile, but give up before purchasing.
“Last year mobile payments began to go mainstream. This year we’re seeing a continuation of that trend, whereby it’s getting easier and easier to use your phone to make secure transactions”, said Duncan Stewart, director of TMT Research at Deloitte in Canada. “The check-out process is made much simpler if all you need is your fingerprint to authenticate and authorize payment in just one or two touches. The days of filling out screen after screen of payment card details and both home and shipping addresses, we predict, are numbered.”
Deloitte’s annual TMT Predictions identify the key trends that are likely to have a significant impact on companies in the technology, media and telecommunications industry and beyond over the next 12 to 18 months. This year’s report examines mobile touch commerce, games and ad-blockers, virtual reality, cinema revenue trends and the rise of cognitive technologies in enterprise.
The report also predicts that in 2016 mobile will become the leading games platform by software revenue, reaching 37% of total gaming sales, surpassing both console and PC games. That’s big news for Canada’s gaming industry, which is the third biggest in the world, contributing $2.3 billion to GDP and employing over 20,000 full time equivalents. Far from taking over the gaming industry, mobile is less lucrative than traditional PC or console games, with average revenue of only $40,000 per mobile game compared to $2.9-million per PC game and $4.8-million per console game.
The influence of mobile will not result in Canadian 'trailing millennials' (aged 18–24 years old) to abandon personal computers in 2016, the report continues. While they may be the smartphone generation, their ownership, intent to purchase and use of PCs will likely be higher than any other age group and the Canadian population as a whole. In a 2015 Deloitte survey, 25% of Canadians 18-24 said that they hope to get a new laptop in the next 12 months, and Canada was one of the only countries surveyed where trailing millennials were more likely to have access to a laptop than a smartphone: 93 percent vs 91 percent. Trailing millennials consider smartphones and PCs complements, not substitutes.
“What we’re seeing in terms of the bigger picture for 2016 is that mobile devices continue to be an important – even vital – part of our daily lives, capturing a significant amount of our time and money, but their influence only extends so far,” said Robert Nardi, Partner and National TMT Leader for Deloitte in Canada, in the news release. “For the majority of Canadians, our smartphones and tablets complement or enhance rather than replace the traditional products we’re used to or, only slightly alter our behaviours.”
The report also says that the U.S. traditional television market, a bellwether for the Canadian market, and the world’s largest at about $170-billion in 2016, will see erosion on six fronts: the number of pay TV subscribers; pay TV penetration as a percent of total population; average pay TV monthly bill; consumers switching to antennas for watching TV; and live and time shifted viewing by the overall population, especially millennials 18-24 years old. Despite concern of traditional TV collapsing, Deloitte predicts the decline will be gradual over time.
Other prognostications in the report include:
– The number of gigabit per second (Gbit/s) Internet connections available to Canadians will surge to over four million by the end of 2016, and Deloitte predicts at least 100,000 homes will subscribe by year end, in line with global adoption. Rising demand will be fueled by increasing availability and falling prices;
– Virtual reality headsets will move from the lab to the store for consumer purchase in 2016 with hardware and software sales totaling $1-billion globally, and less than $30-million in Canada. Despite the hype around VR, this is still very much a niche market;
– Mobile ad-blockers will place less than $100-million of revenue at risk in 2016, or just 0.1 percent of the $70-billion global mobile advertising market. Deloitte expects 0.3% of Canadian mobile owners will use an ad-blocker in 2016;
– By the end of 2016, more than 80 of the world’s 100 largest enterprise software companies (by revenues) will have integrated cognitive technologies in their products, signalling a true coming of age for AI (Artificial Intelligence).
Deloitte’s TMT Predictions are based on worldwide research supported by in-depth interviews with clients, industry analysts, global leaders and more than 8,000 Deloitte member firm TMT practitioners. Over the last five years, Deloitte was more than 80% accurate with its TMT predictions.
