Vinyl sales to generate $1bn globally in 2017 according to Deloitte TMT predictions

Vinyl Sales to Generate $1bn Globally in 2017 According to Deloitte TMT Predictions

Alastair Luke Corporate

  • Vinyl sales will generate $1bn globally for the first time this century;
  • There will be more than 10 million cyberattacks in 2017, with one terabit/s attack per month on average;
  • More than a billion devices, predominantly smartphones, will incorporate fingerprint readers in 2017. There will be over 10 trillion uses of fingerprint scanners this year;
  • Sales of tablets in 2017 will be fewer than 165 million units globally, down 10% from the previous year and down 30% from 2014’s peak of 230 million units.

The resurgence of vinyl records, a rise in the severity of cyberattacks and fingerprint scanners becoming the norm on smart phones are some of the key technology, media and telecommunications trends predicted for 2017 in a new report published today by business advisory firm Deloitte.

The news comes following the launch of the sixteenth edition of TMT Predictions 2017 the annual publication from the technology, media and telecommunications (TMT) practice at Deloitte, which outlines its predictions for the sector in the year ahead.

Other trends identified in the global report are Deloitte’s expectation that sales of tablet devices will peak in 2017, TV advertising revenues will remain resilient to digital disruption and significant strides will be made towards the creation of a 5G mobile network during the year.

The vinyl frontier: the billion-dollar nostalgic niche

Vinyl sales to generate $1bn globally in 2017 according to Deloitte TMT predictions

Pictured at Deloitte’s Belfast Technology Studio is Deloitte technology partner Dr Danny McConnell.

According to Deloitte, 2017 will see total vinyl sales generate $1 billion (£800m) globally for the first time this century. New and used discs will generate over 90 percent of total revenues, with the remainder made up by turntables and accessories.

New vinyl revenues and units are likely to enjoy a seventh consecutive year of double-digit growth in 2017, with about 40 million new discs sold, generating $800-$900 million (£650-£730m) and an average revenue per unit at a little over $20 (£16). Vinyl’s continued resurgence will likely account for up to 18 percent of all physical music revenues in 2017 and about six percent of forecast global music revenues of $15 billion (£12bn).

Dr Danny McConnell, technology partner at Deloitte in Belfast, comments: “Vinyl’s resurgence more than 40 years after peak sales in the late-1970s is something of a phenomenon. The ubiquity of music streaming services means that music has never been more accessible, portable and readily available for consumer. Yet, despite that, consumers are choosing to buy something tangible and nostalgic and at a price point that provides record companies with significant revenues. Vinyl has a future in music however music’s future, both from a revenue and consumption perspective, is all about digital.”

Cyberattacks enter the Terabit Era

Deloitte also predicts that in 2017 Distributed Denial-of-Service (DDoS) attacks, a form of cyberattack, will become larger in scale, harder to mitigate, and more frequent. Deloitte expects there will be on average a terabit/s (Tbit/s) attack per month and over 10 million attacks in total during the year. The average attack size will be between 1.25 and 1.5 gigabits per second (Gbit/s) of junk data being sent. An unmitigated Gbit/s attack (one whose impact was not contained), would be sufficient to take many organisations offline.

Dr McConnell comments: “This escalation in the DDoS threat is largely due to the growing number of vulnerable IoT devices and online availability of IOT-focused malware (both of which allow relatively unskilled attackers to hijack IoT devices and use them to launch attacks), as well as access to ever higher bandwidth speeds.

“Businesses of all sizes should acknowledge the growing DDOS threat and consider how best to handle attacks of these magnitudes.”

Prints charming: biometric security reaches the billions

According to Deloitte, the active base of fingerprint reader-equipped devices will top one billion for the first time in early 2017. Each sensor will be used, on average, 30 times a day, resulting in more than 10 trillion aggregate uses globally.

The predictions show that approximately 40% of all smartphones in developed countries will incorporate a fingerprint reader by the end of the year, up from 30% as of mid-2016. At least 80% of users with a fingerprint reader-equipped smartphone will use this sensor regularly; this compares to 69% of users in mid-2016.

Dr McConnell comments: “Billions of smartphones and tablets are expected to be capable of processing and collecting multiple types of biometric inputs, including face recognition, voice pattern and iris scan in 2017, but usage of fingerprints will lead the way. The rapid pace of adoption of this technology will likely be met with additional applications that could use fingerprint readers to provide fast and secure authentication. As fingerprint security becomes more common, consumers will find it easier – and will be more willing to pay for goods and services using their smartphones.”

Have we passed peak tablet?

Deloitte predicts that global sales of tablets in 2017 will be fewer than 165 million units, down by approximately 10% from the 182 million units sold in 2016. The fall, whilst modest, suggests that demand for the tablet – once regarded as the ‘Goldilocks’ device, being just the right size – has peaked, particularly after shipping more than 200 million units annually in 2013, 2014 and 2015.

Furthermore, Deloitte predicts that the most recent level of shipments suggests that household adoption of these devices may also be plateauing, and at a substantially lower level than for other consumer electronic devices.

In terms of UK market penetration, 63% of adults have access to a tablet, while smartphone penetration is at 81%, and 95% have access to a desktop or laptop computer. More than a quarter (27%) of consumers are likely to buy a new smartphone in the next 12 months, and 24% intend to buy a new computer this year. By contrast, the figure for tablets was only 15%.

The notion of a slowdown in tablet adoption is further enforced by the fact that the lifetime of tablet devices is seemingly extending. According to Deloitte’s analysis of UK data, only 38% of tablets were bought in 2015 or 2016. More than half were pre-2015 models and more than a quarter more than three years old.

Dr McConnell added: “In terms of the preferred devices for various activities, there are three consumer devices that are leading tablets by a large margin: TVs, smartphones, and computers. It seems unlikely that the tablet will ever displace these devices, although it will remain more ubiquitous than other recent devices, such as smart watches and fitness bands.

“With smartphones becoming larger and more powerful, and our research showing that millennials typically prefer laptops to tablets, it seems that the tablet may be getting harder to swallow for consumers.”