10 ICT-trends for 2008

Sunday, September 9, 2007

1. The discussion on digital broadcasting moves focus away from a greater change on how television will be used

The recent transition from analogue to digital television broadcasting in Finland has been a small change in comparison to the larger ongoing change in television viewing. This change has been started by young, advanced users of new technology. Today, many young people that are moving to their first own apartment decide not to buy a television. They find it cheaper to use a computer and a broadband connection instead. They can watch TV broadcasts using a digital television receiver connected to the computer’s USB port and download movies and television series from the Internet.
New devices for watching movies and television are constantly being introduced to the markets. The content market is also becoming more fragmented. This means that it will be increasingly more difficult for traditional broadcasting companies to reach all consumer segments using their current business models. On the other hand, a large group of viewers will continue to watch traditional television broadcasts for some time to come. However, a major change is underway. It will become more prominent as the general population becomes aware of new forms of watching television and these become more easy to use.

2. Design and user experience become increasingly more important as opposed to purely technological innovations

Consumers’ choices will increasingly depend on design and usability. Device and software markets are currently filled with products containing features that most consumers never use. Many owners of smart phones may still only use their phones for calls and SMS messaging. The only additional features they occasionally use may be the camera and the FM radio.
In the competition for new consumers, ease of use and an attractive design will become increasingly important factors. Design and usability will therefore be introduced at an earlier point in the planning stages of a new product.
Ease of use is essential when introducing devices with new features to new users. At the same time, however, many device markets are reaching saturation point. This is leading many device manufacturers to introduce services as a more central part of their business, either as stand-alone products or as a way to boost device sales.

3. Location-based applications are adopted also outside car navigation

In the near future, the focus of the location based services market will extend to pedestrians. Until this point, location based services have almost completely been limited to in-car use. More than 200 000 car navigation devices and navigation software packages for mobile phones have been sold in Finland in total. This means that approximately one out of ten cars now carries a navigation product.
As the number of phones with built-in GPS receivers increases, positioning will be utilized by new service forms such as online communities, sports, marketing and travel. As a consequence of dropping GPS chip prices, receivers may soon be included in other devices as well. Other positioning methods may also become more common.

4. Chinese consumer brands start entering European markets

Chinese corporations will try to copy the success of Japanese and South Korean companies on a global consumer market. Many Chinese companies have started their international operations in emerging markets, but the time is soon ripe for them to approach Western consumers.
The Beijing Olympic Games in 2008 will give Chinese brands additional international visibility. However, in order to succeed in Western countries, Chinese companies will have to change the perception held by many consumers that Chinese products are of inferior quality. This is a major challenge, but the same challenge has once been overcome by both Japan and South Korea. A significant part of the internationalization of Chinese companies in the next few years will happen through acquisitions. Lenovo’s acquisition of the PC division of IBM in 2005 is a recent example.
In the long run, China is likely to challenge Western countries in high-end product categories and service production as well. In August 2007, there were more than 500 million mobile phone subscribers and more than 120 million broadband subscribers in China. A market of this size is likely to produce innovations, and at some point we will see Western companies copying ideas from China.

5. A second chance for mobile marketing and mobile gaming

Much has happened since the hype over mobile marketing and mobile gaming calmed down some years ago. Mobile technology has developed and the installed base of mobile phones has changed in Finland. Almost a million Finns now own a smartphone.

The Finnish mobile phone base now enables new forms of marketing and gaming. In marketing, graphics can be used instead of just text, making the mobile phone a more attractive marketing medium for both consumers and advertising agencies. Pull campaigns that encourage consumers to use their camera phone will become more widely used. Fixed-rate data plans will lead to an increase in WWW and WAP browsing, which will attract more browser-based mobile marketing.
Device manufacturers have rediscovered mobile gaming. Phones with better graphics and user interfaces will make a growth in mobile gaming possible.

6. Increase of direct consumer-to-consumer business via digital channels

Direct transactions of selling and buying products and content between consumers will increase. Consumers will sell and buy both physical products and digital content, such as images, video and virtual community commodities.

New and established companies in the IT industry see this as an opportunity to provide services that enable and secure these transactions. The companies will focus on creating new meeting places for buyers and sellers and develop technologies for transaction mechanisms and the secure verification of business parties.

Virtual communities that until now have provided ways to share free content to other users will start to offer additional possibilities to sell content to other users.

7. Global climate change and other environmental issues influence the marketing strategies and other decisions made by leading high technology companies

The increasing public debate on global climate change and environmental issues starts to show in the marketing communication of ICT companies. For example, Dell has announced that the company aims to be the most environmentally friendly IT company in the world. In 2008, this trend will also be seen in Finnish ICT companies. Companies will emphasize the environmental friendliness of their own processes and present ways how their customers will also protect the environment by selecting their services. The topics will include, for example, cutting down power consumption and removing the need for travelling.
The key driver for this trend is a change in consumer values: increasing awareness of environmental issues and a desire to take action. ICT companies have identified this change and want to take advantage of it.
There will also be an increase in online services that allow consumers to check the environmental friendliness of certain products or to locate products that are produced near his or her home.

8. The interoperability between different products and devices becomes more important

Interoperability between smart phones and personal computers will be one of the key competitive factors in the mobile phone markets. Especially users with multimedia capable devices will value the ability to easily connect their mobile device with their personal computer and online services. Ease-of-use and pleasurable visual experience are key factors in successful products.

The importance of interoperability was seen when the PDAs first entered the US markets. Palm Pilot was a successful mass market product in the US due to the fact that it could be easily connected to a home computer. Also, one of the key elements in the success of Apple’s iPod has been the smooth interoperability between the device and the iTunes computer software.

In the future, interoperability will be a factor affecting other levels of technology as well: open file formats allow software by different vendors and open source applications to communicate with each other. Common and open standards extend interoperability between hardware provided by different vendors.

9. Investors start to abandon Web 2.0 services

Venture capitalists have obtained huge profits with Web 2.0 investments during the last few years. Cases such as Skype and YouTube show that some concepts and brands are valued high above the pure business value of the companies. However, most new Web 2.0 services do not have good prospects of profitable and organic growth. Investors have observed this trend for a long time, but still have been interested in the possibilities of new potential hit services.

As the biggest earnings have been made and there are less and less prospective buyers for major Web 2.0 services, investors’ interest toward them is not very strong. As a consequence, many services do not have enough resources for growth. At the same time, investors start to look at new prospective areas.

Web 2.0 has not been a major focus area for Finnish venture capital firms. Nevertheless, global trends are also reflected in Finland. According to analysis by Idean, Finnish ICT investments in recent years have mainly focused on B2B companies. Finnish venture capitalists have also shown a particular interest in software companies.

10. Online communities become an important marketing and sales channel

Online communities are in a good position to gather accurate and detailed information on their users. For example, a music service can discover a particular user’s musical preferences and thereby target marketing efforts specifically for this user. At the same time, the impact of traditional marketing channels is declining as the attention of consumers becomes more fragmented between various media. The Internet has taken its toll on traditional media, such as printed newspapers and television. Also, the change in television consumption further divides consumers into smaller segments.

Online communities will increasingly be utilized as marketing and sales channels. As they begin to aim for effective marketing solutions, there is likely to be an increase in cooperation between online communities and also some consolidation.

2 Responses to “10 ICT-trends for 2008”

filipe says:

Saturday, October 25, 2008

Very interesting.

Seems you got it all

Best wishes…
amsi says:

Wednesday, November 12, 2008

well done report
liked it