Global TMT Market – What are the Consequences of COVID-19 Pandemic?
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The combination of the COVID-19 pandemic, lockdowns, work and learn from home, supply chain interruptions, and economic contraction/changes in consumer spending have affected the global market of technology, media and telecom (TMT).
Deloitte has revised its TMT 2020 market predictions accordingly. The company evaluates that global GDP, in the best-case economic scenario, will be weak in Q1, even weaker in Q2, and start to recover by Q4; GDP will be down 8.3 percent for the year as a whole.
The major five aspects that were updated are, according to news.itu.int:
- Decline in smartphone sales – While their original prediction was $484 billion, up 5.8% from 2019, the weak Q1 and an anticipated collapse in Q2 will result in a 10% global decline for the full year. Moreover, the report had predicted that the smartphone multiplier (the revenues of things that accompany smartphones, such as apps, ads and accessories) would be $459 billion in 2020. Now it is expected to be $393 billion. “Longer term, and post-pandemic, we would expect the market for both smartphones and the things that accompany them to return to growth, with the multiplier growing even faster than smartphone sales themselves.”
- Edge AI chips slow down – Originally, they predicted about a third of the smartphones would have NPUs in 2020, accounting for an estimated 500 million chips out of a total 750 million edge AI processors. Taking into account the pandemic, they have cut that by 100 million units, to only 650 million, but that will still be more than double the number of phones with edge AI chips that sold in 2017. The presence or absence of an edge AI chip has significant implications on data transmitted, as well as on privacy and security, so this drop will matter.
- Private 5G speeds up – Although 2020 deployments/launches of public 5G networks have been mixed because of the pandemic (faster in some countries, but delays in others), the prediction for private 5G trials and pilots looks like it will be exceeded – from “over 100” for the year to “under 1000” based on many trials of private 5G solution just in Q1 of 2020 that the company was aware of. It is difficult to say if the more rapid pace of private 5G trials is connected with the pandemic. Testing a new technology while a factory is otherwise idle might make sense, and there were some private 5G trials in medical and logistics/distribution verticals, which could well have been accelerated by COVID-19 stresses.
- Low Earth Orbit goes higher – The number of Low Earth Orbit (LEO) data satellites in orbit by the end of 2020 was updated from “more than 700” to “more than 1,000.” Once again, it is hard to know how directly the pandemic is influencing the more rapid deployment of LEO sats. But as hundreds of millions of people work and learn from home, as governments try to fill coverage gaps for rural broadband, and as carriers look for more backhaul for the increased traffic – the demand for data from orbit looks stronger.
- CDN grows even faster – Streaming video is running relatively well over global telecoms networks so far but will likely need help from Content Delivery Networks (CDNs.) While originally calling this market to be up 25% to $14 billion, it now looks like 30-40% is possible for the year, or up to $15.5 billion.
