In a report published a few days ago entitled TMT Predictions 2023consulting firm Deloitte explores the big tech trends for 2023. Semiconductors, satellites, artificial intelligence, streaming platforms, etc. What does this new year hold for the tech world?
The tech sector will have to do more with less according to Deloitte
The rise in inflation and interest rates, the slowdown in economies around the world and the drop in consumer confidence are clearly the elements that dominate the debates at the end of the year. VShe poor economic conditions are the cause of difficulties in the tech industry and an increase in mergers and acquisitions in the field of video games. Indeed, as the valuation of many companies has plummeted, the giants are rushing to buy them up. Microsoft is a typical example with the recovery from Activision Blizzard for $68.5 billion.
According to Deloitte’s predictions, the watchword for 2023 is: consumers and businesses will have to do more with less as inflation, supply chain issues and other global events continue to cause economic uncertainty. According to Kevin Westcott, Vice President at Deloitte we are going through a very particular context. Lumers seek more cost-effective ways to be entertained and productive, while businesses seek innovation to compete, differentiate and increase revenue “.
He believes that Deloitte’s report on emerging trends will guide organizations in their planning for the future and in “ their efforts to meet the needs of their customers “. In the study, one can for example read that in 2023, the number of mergers and acquisitions of video game companies will continue to increase by 25%.
What developments for streaming platforms?
Deloitte’s report mentions many technological aspects and offers a number of avenues and major trends. First point: streaming services. With the proliferation of platforms, competition is increasingly strong. In this regard, Deloitte believes that most platforms will change their offers and propose new options, cheaper or even free, with advertising.
It is exactly what Netflix wants to do. The year 2022 has been particularly eventful for the streaming platform. Netflix has notably saw his number of subscribers drop. This is why it was time to react. The company therefore decided to include advertising in a new subscription at 5.99 euros per month to lower the bill for users who are willing to tolerate ads. The Deloitte study shows that “ US streaming service churn was 37% in 2022 “.
This means that entertainment platforms will have to find new ways to generate revenue, while offering attractive offers to users, who have a growing appetite for more attractive and diversified content. As explained Jana Arbanas, vice president at Deloitte and head of the telecommunications, media and entertainment sector in the United States, Iavertising on video-on-demand platforms, for example, can meet both of these objectives “.
The idea is to offer an option adapted to the budget of Internet users while having growth prospects by working with advertisers. The platforms are currently trying to determine whether this strategy is viable or not. Discussions take place to know if Netflix has the right to insert advertisements or include ad-supported content on original shows produced by the streaming giant, as well as on content that is not original production, and which only enrich the library of the platform. That’s the whole question.
Booming virtual reality
Deloitte predicts that the virtual reality market will generate $7 billion in revenue worldwide in 2023, a 50% increase from $4.7 billion in 2022. Analysts say that as virtual reality will gain popularityrevenues will come mainly from helmet-related sales. 14 million units (at an average price of $450) are expected to be sold in 2023. Which could represent 90% of revenue for the market.
Other income will be made up mainly games (who have had a second wind for a few months), but also a few enterprise applications, which could generate revenues of just over a billion dollars. Deloitte believes that in terms of numbers, virtual reality has a long way to go to catch up with other digital devices. Smartphones alone have nearly five billion users worldwide, and billions of people also use computers or tablets. In 2023, experts only expect 22 million headset users.
If virtual reality is indeed tending to develop, this technology remains so for now a niche product. After timid beginnings in the 2010s, it seems that virtual reality games are increasingly adopted around the world, in particular thanks to Meta Quest 2 and the pandemic of Covid-19. This upward trend is expected to continue over the next two years. In all, there will be around 46 million helmets in service.
Now that the component shortage is easing, largely due to (or thanks to) the economic downturn, VR companies should be able to to ship more products in 2023 and 2024.
For Deloitte, AI will come to the rescue of the semiconductor industry
A trend seems to be emerging: more and more chipmakers are using artificial intelligence to design chips faster and at lower costs. Deloitte predicts that the world’s leading semiconductor companies could spend $300 million on AI tools to improve chip design in 2023, and that number could increase by 20% per year over the next four years to exceed $500 million in 2026.
The impact of artificial intelligence will likely go far beyond this. In fact, this technology will allow manufacturers to pushing the limits of Moore’s law and save a lot of time and money. In 1965, Gordon Moore, Chairman Emeritus of Intel, predicted that the number of components in a chip could double every two years. For decades, this prediction has held true, giving rise to enormous advances in technology.
Today, experts in the field say that those days are over. Paul Silverglate, Vice President at Deloitte, assures that “ Ihe shortage of semiconductors has demonstrated the need for faster and more efficient manufacturing of chips to meet demand “. Design assisted by artificial intelligence can be used to meet this need and even help fill the chip talent gap.
Other developments could also take place at the component level. Indeed, silicon could for example be replaced by gallium nitride and silicon carbide, two materials that seem to be more suitable for very high voltages and power levels. They will also be more effective in coping to more and more common applications such as batteries for electric vehicles, chargers for consumer electronics, powerful solar panels, etc.
CSR at the heart of strategies?
This is a subject that companies can no longer escape: the environmental impact. Many organizations want to achieve carbon neutrality. In this regard, the technology industry is strongly committed. Deloitte analysis finds tech companies work harder and faster to influence climate change and are 13% more likely than non-tech companies to aim for carbon neutrality by 2030.
Technology industry executives feel more and more concerned and are also more inclined to act. 37% of executives surveyed said their organization was already faced with “ a shortage of resources such as water and energy “, an increase of 8% compared to a similar survey carried out eight months earlier. 42% said their business has been affected by disasters or climate-related weather events, up 18% from the previous survey.
Deloitte’s survey finds that tech executives are more likely than executives in other industries to believe that immediate action could mitigate the worst effects of climate change. 90% of managers surveyed believe that their company’s sustainability initiatives will help mitigate climate change.
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What are the big trends for 2023 in the tech industry?
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