New Patterns of Consumption, New Patterns of Use? Paul Gray, Principal Analyst April 2017
2 Contents Quick roundup of television UHD: beyond the television screen Intelligence: at the edge of the network? Trust
Area (millions m²) Shipment (millions) 3 TV shipments mature; area growing rapidly Display area in TV (million m 2 ) by region 180 300 160 140 250 Middle East and Africa Latin America 120 100 80 200 150 Asia Pacific China Eastern Europe Western Europe 60 40 20 100 50 North America Japan Shipments 0 Source: IHS 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 0 2017 IHS
$750 $1,250 $1,750 $2,250 $2,750 $3,250 $3,750 $4,250 $4,750 $5,500 $6,500 $7,500 $8,500 $9,500 $50,000 Premium large screen display trends: TV Bigger, more pixels, better pixels cheaper Bigger: size growth by 1 per year Higher resolution: 4K and now 8K appearing Brighter (for high dynamic range): from 300cd/m 2 (standard) to 1000cd/m 2 peak Deeper colours: DCI-P3 gamut, towards Rec.2020 30% 25% 20% 15% 10% 5% 0% 55"+ TV prices, by size and technology Prices: still falling. LCD TV UHD 55 LCD TV UHD 58 LCD TV UHD 60 LCD TV UHD 65 LCD TV UHD 70 LCD TV UHD 75 OLED TV UHD 55 OLED TV UHD 65
5 OLED: attractive alternative to sheer size? Significant number of European consumers choose OLED over a larger LCD Most brands now using OLED as a premium offering Pricing positioned at comparable 10 larger LCD Many premium consumers choosing OLED over LCD especially in Europe 65 OLED out-shipping 75 LCD Endgame on screen sizes? TV share: 55" OLED, 65" LCD, 65" OLED, 75"LCD 90% 80% 70% 60% 50% 40% 55" OLED 65" LCD 65" OLED 75" LCD 30% 20% 10% 0% Japan North America Western Europe Source: IHS 2017 IHS
Weight (kg) Volume (litres / 000cc) 6 Flat panel TVs don t scale well beyond 65 Cannot rely on size alone to support the market Flat panel TVs do not scale well beyond 65 : Extra metalwork for rigidity LCD TV packed weight and box volume v size 120 1600 Very much larger box for protection: corner drop. Increasingly difficult to transport 100 80 Weight / kg Volume / l 1400 1200 1000 Shipping costs grow exponentially 60 40 20 800 600 400 200 Reference data: Samsung Q8C series, excluding 88 0 0 30 50 70 90 Source: IHS Screen size (inches) 2017 IHS
7 UHD: beyond the television screen
8 UHD Content reinforces new consumption patterns Why was Reed Hastings at MWC? Streaming services first to launch UHD content > Marketing strategy to support premium content positioning. Equally encouraging mobile usage. UHD featuring like Dolby Vision now on phones: LG G6 (pictured) Blurring boundaries between TV and mobile viewing: it s all long-form video! Source: LGE
UHD movie title availability best from OTT streamers UHD title availability by service and delivery method 250 Physical Both EST & VoD EST Only SVOD VoD 200 150 100 50 0 50 100 150 200 250 0 Amazon DirecTV M-Go Netflix Ultraflix Vudu
Film most suitable for UHD, but SVoD giants UHD TV content critical to their businesses UHD Title availability 160 140 120 100 80 Amazon v. Netflix, by Genre Documentary Events Film Sports TV series Film 60 TV series 40 Events Documentary Sports 20 0 Amazon Netflix
11 Intelligence: at the edge of the network?
12 5G Low latency and low power most interesting You cannot buffer perception! Fast, ultra-reliable networks allow mobile technologies to address critical systems. Ability to use far-flung computing and hardware resources > Amazon Web Services an early example Productivity growth moves away from simple access to investable capital?
13 A new era of interactivity Buttons and sliders Pointing devices Touch and Gesture Network-based intelligence
14 Alexa, what is the forecast? Smartness transitioning from the device to the network. Alexa, Bixby, Cortana, Google Assistant, Siri starting new era of interactivity. > Power of the network reinforces the device. New gatekeepers emerging, network effect heavily rewarded Rewards to scale: better learning gives better performance. > Strategic for Google: will make all its services smarter, not just its phones. Opening of AI to developers triggers wave of new integrations: > Cars, white goods, other CE devices. Source: Samsung
Shipment (millions) 15 Smart Speakers lead the charge Prices will drop rapidly plenty of scope for subsidy model. Alexa has lead from perfect timing, competition will intensify from other platforms and devices. Google will accelerate as developers gain momentum Device makers largely agnostic, support for multiple platforms likely. Smart speaker forecast by platform 30 Other / Proprietary 25 Apple Siri Google Assistant Amazon Alexa 20 Sonos 15 10 Smart speaker installed base over 59 million units in 2020, from 6 million in 2016 5 0 2014 2015 2016 2017 2018 2019 2020 Source: IHS 2017 IHS
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17 Where does privacy fit in a hierarchy of company needs? Privacy Brand Sustainable business model Profitable Product doesn t harm customers
18 Where does privacy fit in a hierarchy of company needs? Or is it here? Privacy Brand Sustainable business model Profitable Product doesn t harm customers
19 Thank you! Questions? Paul Gray, paul.gray@ihsmarkit.com +44 7810 854646