2015 Global & Japan ICT Outlook
2
Agenda
Introduction – What to Expect from the ICT Industry in 2015
• Smart Devices
• Wearable Technology
• Mobile Carrier Business
• Digital Economy
• E-Commerce
• Social Media
• Artificial Intelligence
• Security
• Cloud Computing
• Big Data Analytics
• Unified Communications
• Internet of Things
• The Office of the Future
• 3D Printing
Consumer ICT Trends Enterprise ICT Trends
ICT “Megatrends”
3
ICT MEGATRENDS
3
4
ICT Japan “Megatrend” – Tokyo Olympics
Shinkansen SCMaglev
Satellite
Broadcast
Broadcast
in Color
Super Hi
Vision (8K)
40 TB Hard
Drive
Self Driving Cars
1GBPS
Mobile
Network
Computerized
Scoring
Quartz
Wristwatch
5
ICT Japan “Megatrend” – “Abenomics”
Abenomics has rendered a significantly weaker yen which is expected to remain
weak in 2015. Japanese companies are benefiting from being able to sell ICT
products overseas at a lower price.
6
Trend: Internet of Things
When two auto makers both had a recall for a similar issue, IoT made a crucial
difference in the customer experience and cost savings.
In January of 2014 the US government asked Tesla and GM to recall certain
models of cars due to a risk of fire coming from faulty spark plugs.
All of Telsa’s cars include 3G service
as a data only MVNO (paid by Tesla)
GM’s trucks did not have
internet access
29,000 cars fixed automatically via a
software upgrade
380,000 cars taken manually to
dealerships
7
Taxonomy of Internet of Things
Mature
Translation Connectivity Platforms Objects Applications
• Consumer electronics • Phones • Appliances
• Sensing devices • Sensors
• Actuators • Embedded
Controllers • Virtual Objects
• Bitcoins • Avatars, digital
goods
Developing Area • Wearable devices
• Wireless sensor networks and capture devices • QR codes and
barcodes readers
• NFC reader • Bluetooth
• Wireless transmitting devices
• Chipsets • Modules • OEM
• Personal Computers & Smart phones
Developing Area
• Zigbee, Z-wave
• Wired & Wireless Networks
• Enterprise & SP Gateways
• Network Management • IP Multimedia
Subsystems
Developing Area • Heterogeneous
networks • Self organizing
networks
• Software defined networks
• Data Centers • Data storage and
management
• Discovery management
• Identity management • Device management
• Performance Management
Developing Area
• Charging and billing • Security and access
management • Big Data Processing
and Analytics
• Workflow and Process Automation
• Applications • Domain specific
applications
• Enterprise application (ERP, CRM, SCM)
• Social networking apps
Developing Area • Analytics • Rules engine
• Contextual analytics
• Visualization • Orchestration
Developing Emerging Mature Mature
* Denotes IoT Solution Maturity Level
Digitizing and capturing characteristics of objects
IoT and M2M encompasses an end-to-end solution that captures, transports and
analyze data which can be categorized into 5 distinct layers:
7
8 8
IoT Market Size and Growth Rates Across Key Verticals
US$20.0Bn
(Spending: 2014)
31.3% (CAGR: 2014-2019)
Transportation &
Logistics Healthcare
US$0.9Bn
(Spending: 2014)
45.4% (CAGR: 2014-2019)
Utilities
US$1.6Bn
(Spending: 2014)
20.7% (CAGR: 2014-2019)
Construction
US$0.4Bn
(Spending: 2014)
40.0% (CAGR: 2014-2019)
Consumer
Segment
US$4.8Bn
(Spending: 2014)
63.7% (CAGR: 2014-2019)
Public
Security
US$3.3Bn
(Spending: 2014)
43.8% (CAGR: 2014-2019)
Manufacturing
US$2.6Bn
(Spending: 2014)
60.3% (CAGR: 2014-2019)
Wholesale & Retail
US$2.1Bn
(Spending: 2014)
35.0% (CAGR: 2014-2019)
Finance
US$0.5Bn
(Spending: 2014)
33.9% (CAGR: 2014-2019)
Note: Market size is based on spending on the IoT modules. It does not include the entire ICT spending for the respective sectors.
Please refer to the appendix for the methodology.
9
Introduction to Big Data Analytics
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
Source: IBM.
Big Data Human Tracking Big Data Ebola Outbreak Tracking
10
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
11
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
12
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
13
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
14
Japan Big Data Market To
tal M
ark
et S
ize
(U
S$
m)
Japan’s government aims to revise laws regarding it to relax regulations for using
big data by 2015 which should boost the market size.
Japan Big Data Market Sizing
2011-2016
Global Big Data Revenue Distribution
2013
Source: Frost & Sullivan.
0
100
200
300
400
500
600
700
800
900
2011 2012 2013 2014 2015 2016
15
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
16
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
17
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
18
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
19
Industry Definitions
Big Data Analytics as an industry is gaining a lot of attention not only to the growth
in global data traffic but the proven benefits of using such technologies.
20
INDUSTRY APPLICATIONS
20
21
Industry
Big Data/Analytics are slowly entering the Japanese market in a variety of
industries such as retail and consumer electronics.
Source: Frost & Sullivan.
Product Impact
Consumer information is collected
when beverages are purchased
and subsequently choices are
offered to buyers based on age,
sex etc.
Toshiba can accurately predict
when a HDD will malfunction
within 3 months by collecting
status data of operation and
temperature via PC health monitor
which is installed in the PC, and
referring repair record database.
Retail
(JR East)
Consumer
Electronics
(Toshiba)
Japan Big Data Market
Source: Frost & Sullivan.
22
Hitachi Business Microscope
Wearable technology is also moving into the workplace in Japan.
Source: Frost & Sullivan.
Hitachi Business Microscope Impact
Hitachi Business Microscope is a
smart wearable device designed to
increase office productivity. The
device can track how often
employees meet and create an
organizational diagram.
The device can also monitor how
often employees speak in
meetings, take breaks etc. in an
effort to improve overall office
productivity.
23
Big Data Analytics in Wearable Technology
Industry
Big Data Analytics is creating new business models in the wearable technology
space.
Source: Frost & Sullivan.
Device Impact
US Oil Company British petroleum
has given 30,000 employees a
free FitBit device. If an employees
logs 1.5 million steps a credit is
given on their insurance policy.
US Automotive company
Progressive offers a device which
can be placed in a car to monitor
driving behavior. The average
user who uses the device saves
US$150 per year
Health
Insurance
Automotive
Insurance
24
Big Data Analytics in Social Media/Logistics
Web 2.0 companies are also starting to use analytics, notably in order for predictive
analyses which result in better-targeted e-commerce offerings.
Source: Facebook.
Amazon “Anticipatory Shipping” Patent Facebook Predictive Analysis Example
Source: Amazon.
25
Big Data Analytics in Media
Source: Frost & Sullivan.
26
Big Data Analytics in Telecom
Verizon Wireless is using big data and analytics to offer consumer data to a variety
of B2C businesses.
27
Big Data Analytics in Telecom
Verizon Wireless is using big data and analytics to offer consumer data to a variety
of B2C businesses.
Source: Verizon Wireless.
28
CONSUMER ICT TRENDS
28
29
Trend: Smart Devices U
ser
Penetr
ation (
%)
Selected Smartphone & Tablet User Penetration Metrics, 2014E
Smartphone ownership stands at roughly 70% in most Western and Developed
Asian markets, with Japan being roughly 71% in 2014.
Source: Frost & Sullivan.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Smartphone Users Tablet Users
30
Trend: Smart Devices (continued)
2013: 930m Shipments
Overall smartphone shipments are still growing at the global level and are expected
to grow further in 2015.
Chinese players are taking an increasing share of the smartphone market.
Source: Frost & Sullivan.
Samsung, 33%
Apple, 17%
Chinese Tier 1
Vendors, 16%
Sony, 4%
Others, 30% Samsung, 28%
Apple, 16% Chinese Tier 1 Vendors, 29%
Sony, 4%
Others, 23%
Samsung, 27%
Apple, 16% Chinese Tier 1 Vendors, 32%
Sony, 3%
Others, 22%
Note: Chinese Tier 1 Vendors include Xiaomi, Lenovo, Huawai, ZTE, Coolpad and TCL.
2014: 1,250m Shipments 2015: 1,360m Shipments
31
Trend: Wearable Technology
Wearable Technology Sales by Product Type 2014 & 2019E
Wearable technology is still in its infancy but is expected to continue to develop in
2015. Smartwatches will become an important part of the market from next year
Source: Frost & Sullivan.
Smartwatches, 12%
Wristbands, 66%
Wearable Cameras, 19%
Accessories, 2%
Glass, 0%
Others, 1%
Smartwatches, 55%
Wristbands, 25%
Wearable Cameras, 10%
Accessories, 5%
Glass, 3% Others, 5%
2014 Sales: 25m 2019 Sales: 200m
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Trend: Wearable Technology (continued)
Future Trends Driving the Wearable Technology Market in 2015
Wearable technology will continue to evolve with new segments being explored in
2015.
More focus will be given to ear-focused wearable
technology in 2015 for the healthcare market before
moving to more advanced applications.
Apple acquired music service Beats in 2014 for US$3.2
bn. The move also includes their hardware group
suggesting that Apple is exploring connected headsets.
Microsoft has unveiled a beta version of real time, free
translation for Skype users. The technology is being
developed for the wearable technology market.
Google glass has been pulled from the consumer market
after much fanfare. Development will continue for the
corporate market which still holds much promise.
“H
ea
rab
les”
Be
ats
Tra
nsla
tio
n
Go
og
le
Gla
ss
33
Trend: Mobile Network Business Tota
l AR
PU
(JP
Y)
NTT DoCoMo Voice & Data ARPU 2Q2009-2Q2014
Voice usage has fallen significantly in Japan due to OTT applications and market
rebalancing of pricing plans. Operators will need to expedite plans for a post-voice
market.
Source: Frost & Sullivan.
2,6
00
2,5
90
2,5
60
2,5
60
2,5
90
2,6
00
2,6
00
2,6
10
2,6
40
2,7
10
2,7
00
2,6
80
2,6
60
2,6
70
2,7
20
2,6
90
2,6
80
2,6
70
2,6
40
2,6
00
2,6
70
2620
3,0
10
2,9
70
3,0
40
2,5
90
2,6
70
2,6
60
2,5
80
2,1
80
2,3
40
2,2
90
2,2
10
2,0
10
1,9
00
1,8
10
1,7
10
1,5
20
1,4
70
1,4
30
1,3
70
1,2
20
1,2
50
1,1
90
0
1,000
2,000
3,000
4,000
5,000
6,000
Data ARPU Voice ARPU
34
Trend: The Digital Economy
What do all these companies have in common?
15
22
24
31
36
38
39
0 10 20 30 40
Nintendo
Marriott
Yum Brands
American Airlines
Delta
Kraft Foods
2014 Market Capitalization (US$bn)
35
15
22
24
31
36
38
39
41
0 10 20 30 40 50
Nintendo
Marriott
Yum Brands
American Airlines
Delta
Kraft Foods
Uber
Trend: The Digital Economy
All of these companies are worth less than Uber!
2014 Market Capitalization (US$bn) •Uber is a SF based taxi
reservation app which is
roughly 4 years old.
•The company takes a 20%
revenue share on rides
arranged through the app and
generates ~US$2bn per year.
•Uber claims that they
generate US$500m in the SF
Bay area while the local taxi
industry makes US$140m per
year.
36
Trend: The Digital Economy
All of these companies are worth less than Uber!
•Mixi was the largest
social network in Japan
for years before being
eclipsed by Facebook in
2012.
•The company had a
significant turnaround
after publishing a social
game “Monster Strike”
which became #1 in
Japan with 7m MAU.
•The company is now the
5th largest game
publisher in the world.
Mixi Revenue Composition 1Q2012-2Q2014
Monster Strike
37
Ten Largest eCommerce Markets, 2014
US$ billions
Global eCommerce revenues surpassed US$1.2 trillion in 20134led by the US and
China. Online retail comprises between 2% and 14% of total retail in large markets
Online Retail as a % of Total Retail, 2014
19
28
30
33
35
53
139
140
180
300
0 50 100 150 200 250 300 350
Brazil
Canada
South Korea
France
Australia
Germany
Japan
UK
China
US
1.9%
5.2%
12.1%
6.0%
5.5%
6.5%
5.0%
13.5%
7.8%
5.7%
0.0% 5.0% 10.0% 15.0%
Brazil
Canada
South Korea
France
Australia
Germany
Japan
UK
China
US
Source: Frost & Sullivan.
Trend: eCommerce
38
Trend: eCommerce (continued)
Singles Day, Black Friday & Cyber Monday eCommerce Sales, 2012-2014
eCommerce sales continue to soar globally but especially in China. eCommerce
revenue on “Singles Day” in China topped US$9bn in 2014.
Source: Frost & Sullivan.
3.04
5.75
9.34
1.04 1.2 1.51
1.98 2.29
2.65
0
1
2
3
4
5
6
7
8
9
10
2012 2013 2014
Singles Day (China) Black Friday (US) Cyber Monday (US)
Tota
l S
ale
s (
US
$bn)
39
Trend: Social Media
Although well-documented, Indonesia remains one of the most prolific markets for
social media participation globally while Japan is very conservative.
40
ENTERPRISE ICT TRENDS
40
41
The market for AI is growing exponentially and will grow from US$6.3bn in 2014 to US41.1bn in
2024.
$3,508
$7,055
$12,433
$1,282
$3,582
$13,927
$585
$2,175
$8,075
$425
$877
$2,095
$492
$1,590
$4,685
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
2014 2019 2024
Expert Systems Autonomous Robots Digital Assistants Embedded Systems Neurocomputers
Global AI Market By Service Area, 2014, 2019 & 2024 (US$m)
US$6.3bn
US$15.3bn
US$41.1bn
Trend: Artificial Intelligence
42
Trend: Security
Cyberattacks have been growing exponentially with over 43m recorded in 2014.
The average damage from a security breach was US$2.7m in 2014
Source: Frost & Sullivan., Hackmadeddon.
Recorded Enterprise Cyber Attacks, 2009-2014
4
10
23 25
30
43
0
5
10
15
20
25
30
35
40
45
50
2009 2010 2011 2012 2013 2014
Tota
l C
ybera
ttack
Incid
ents
(m
illio
ns)
Government, 27%
Industry, 25% Finance, 16%
Non-profit, 8%
News, 7%
Education, 6%
Others, 11%
Cyber Attacks by Industry, 2014
Trend: Security
43
Trend: Cloud Computing
New Approach
“What would have taken several hundred hours, I can now do that on my Mac Pro…I may not create certain effects because I
can’t afford [or don’t have] the render time.” -VFX Artist
““We knew we didn’t have the budget for a large data center. But we didn’t want to be a data center company, we wanted to be a
creative company.” -Hollywood Executive
Previous Approach
Render farm: Huge datacenters store
thousands of hours of footage requiring huge
fixed costs
Thousands of CPUs work together to render a
single shot, angle or screen
Increasing capacity difficult and time consuming
– effects limited to time/capacity at hand
No Render farm: Everything
hosted in the cloud
10,000 hours on 100 machines =
1 hour on 1,000,000 machines
Examples
Licensing: Expensive Graphics Processor Unit
hardware & licensing costs
Capacity can be cheaply scaled
to meet deadlines/requirements
Licensing: New
hardware/licensing not needed
44
Trend: 3D Printing
Global 3D Printing Patent Ecosystem 2014
Japan holds the third-most patents for 3D printing technology, and is still has a very
viable future in the global market.