Deloitte: Smartphone and tablet advertising worth £5bn

David McCourt

Deloitte has announced key trends for the technology, media and telecoms sectors in 2013, predicting growth in the tablet and smartphone advertising market.

The research is part of Deloitte's annual TMT Predictions report, which for the first time is being launched outside London at an event at MediaCityUK, Salford Quays, on Wednesday 16 January.

TMT Predictions offers North West businesses an insight into the key technology, media and telecoms trends for the year ahead.

The 2013 predictions include:

Rise of tablet and smartphone advertising
According to Deloitte, the smartphone and tablet advertising market will be worth about £5bn by the end of 2013. However, ad revenue from the two devices is markedly different. Deloitte predicts ad revenue per smartphone will be £1.55, although for tablets it is expected to be five times higher at £7.90. Deloitte believes progression of smartphone and tablet advertising is likely to be linked to their ability to generate e-commerce revenues for businesses.

The end of strong password-only security
Deloitte believes inadequate password protection could result in millions of pounds worth of losses, resulting in the decline of confidence in internet transactions and significant damage to the reputations of businesses compromised by attacks. Some 90% of user-generated passwords, even those considered strong by IT departments, are believed to be vulnerable to hacking.

Crowd-funding portals to complement traditional VCs
Deloitte says the portals and websites behind crowd-funding initiatives are likely to become a new type of technology company. It predicts that crowd-funding will complement traditional venture capital and private equity at the friends and family stage of funding that generally precedes VC involvement. It could also allow more traditional investors to skip the earlier and riskier stage of investment. Deloitte predicts that crowd-funding will raise £1.9bn worldwide in 2013 compared with £950m in 2011.

The PC is not dead
Strong sales of tablets and smartphones have led some to predict that the PC is an anachronism. However, Deloitte believes that less than half of the 30m tablets purchased by businesses around the world have replaced PCs. The belief is that more often, they replace paper, for example restaurants using them as wine lists or companies using them to display reports.

4G to surge in popularity
Deloitte predicts that there will be an upsurge in momentum behind 4G, with the UK's first operator, EE, launching late last year and the bandwidth auction later this year. Customers will be attracted by improved performance compared with existing 3G, including faster email, multi-media browsing and messaging. Deloitte expects a rise in all-you-can-eat per app offerings from mobile operators who struggle with the cost implications of supplying data to customers. However, Deloitte research suggests that despite smartphones and mobile infrastructure improving all the time, currently 20% of people with a smartphone never or rarely connect to the web.

Jodi Birkett, TMT partner at Deloitte in the North West, said: "Clearly, there are some trends which will raise alarm bells among businesses, such as the estimate that 90% of user-generated passwords are vulnerable to hackers. It means companies should consider other forms of authentication.

"However, there are also myriad opportunities for savvy firms in the region. We expect a rise in the popularity and importance of crowd-funding this year and this will complement, rather than replace, existing traditional venture capital investment. Meanwhile, 4G is potentially a game-changer for businesses, too, particularly those in less connected parts of the region."

Deloitte's TMT Predictions is based on internal and external inputs from conversations with Deloitte's clients globally, contributions from Deloitte member firms' 7,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.

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