Innovation & Technology Convergence: The Latest ...mddb.apec.org/Documents/2012/MAG/DIA1/12_mag_dia1_007.pdf · 3/29/2012 1 Innovation & Technology Convergence: The Latest Developments

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2012/CTI2/MAG/DIA/007

Innovation & Technology Convergence: The Latest Developments in the ICT Sector

Submitted by: Institute for Information Industry

Information Technology Agreement Dialogue

Singapore29 March 2012

3/29/2012

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Innovation & Technology Convergence: The Latest Developments in the ICT Sector

ITA Dialogue, 2012

The Latest Developments in the ICT Sector

Sam Shen, Director

http://mic.iii.org.tw

Market Intelligence & Consulting Institute(MIC)

Institute for Information Industry

2012.03.29

Outlines

Current Challenge of ICT Industry

F f PC d T bl M k Forecast of PC and Tablet Markets

The Convergence Trend of ICTs industry

The Coping Strategies

The ICT Industry Outlook and Opportunity

Conclusion: The ICT Convergence and ITA

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Current challenge of ICT industry

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2011~12：The Global Turmoil Intensified

Japan Earthquake

Currency War

Trade FrictionThailand Flood

Natural Crisis

BRIC

Unemployment Debt Crisis

Emerging Markets

Stock MarketCollapse

Flood

RegionalCompetition

Globalization

Crisis

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ASEANRecession

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200

220ICT services

6.0%

ICT industry maturing, value-add varies by sector

Growth of ICT sector and total value added in the OECD area, 1995-2008Index 1995 = 100, compound annual growth rate in current exchange rates (%)

100

120

140

160

180

200

Services 4.8%Total ICT 4.7%Total business

sector 4.2%

Manufacturing2.5%

ICT Manufacturing.

1.0%

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60

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source：OECD Information Technology Outlook 2010 Highlights, Feb. 2011.

Computing wave: once every 7 years

Computing Revolution

E-mail became an d

Improvements in

Putting computing power in the hands of individuals

making it easier for users to take advantage of the power ofcomputing

Becoming a platform for services, and for publishing and sharing

information

everyday communications tool and informationbecame dramatically easier

to find and share

pprocessing power, storage, broadbandnetworks, natural user interfacesand ubiquitous

screens

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Low pricePC Internet Web2.0 PC and

Mobile DeviceGraphicUser Interface

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Global IT spending still with 2-digit grow

10%

20%

30%

250 000

300,000

350,000

400,000

Worldwide: End-User Spending on Client Computing by Region (Millions of Dollars), 2008-2014

-40%

-30%

-20%

-10%

0%

10%

2009 2010(e) 2011(f) 2012(f) 2013(f) 2014(f)

United States Canada

Latin America Western Europe

0

50,000

100,000

150,000

200,000

250,000

2008 2009 2010(e) 2011(f) 2012(f) 2013(f) 2014(f)

United States Canada

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Latin America Western Europe

Central and Eastern Europe Middle East and AfricaJapan Asia/Pacific

United States CanadaLatin America Western EuropeCentral and Eastern Europe Middle East and AfricJapan Asia/Pacific

2009 2010(e) 2011(f) 2012(f) 2013(f) 2014(f)

WW -9.6% 11.0% 11.4% 10.2% 7.7% 8.8%

US CA LA WE CCE MEA JP AP WW

2011(f) 9.4% 13.2% 15.3% 5.1% 14.1% 21.9% 7.8% 14.9% 11.4%

Source：MIC，Mar. 2012

Forecast of PC and Tablet Markets

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50%

70%

90%

350,000

400,000

450,000

500,000

Worldwide PC Market PredictionShipment Unit (k) Growth Rate (%)

2007 2008 2009 2010 2011(e) 2012(f) 2013(f) 2014(f) 2015(f) 2016(f)

PC Vol 238,847 266,358 271,188 311,111 327,816 342,280 368,685 393,574 424,114 452,794

-30%

-10%

10%

30%

50%

0

50,000

100,000

150,000

200,000

250,000

300,000

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PC Vol 238,847 266,358 271,188 311,111 327,816 342,280 368,685 393,574 424,114 452,794

DT Vol 141,355 133,521 118,301 129,130 133,839 132,481 130,504 126,420 121,231 114,760

NB Vol 97,192 121,627 125,368 152,921 171,979 191,024 220,473 249,819 285,329 320,145

NetB Vol 300 11,210 27,519 29,060 21,998 18,775 17,708 17,335 17,554 17,889

PC GR(%) 11.7% 11.5% 1.8% 14.7% 5.4% 4.4% 7.7% 6.8% 7.8% 6.8%

DT GR(%) 3.2% -5.5% -11.4% 9.2% 3.6% -1.0% -1.5% -3.1% -4.1% -5.3%

NB GR(%) 63.5% 25.1% 3.1% 22.0% 12.5% 11.1% 15.4% 13.3% 14.2% 12.2%

NetB GR(%) 3636.7% 145.5% 5.6% -24.3% -14.7% -5.7% -2.1% 1.3% 1.9%


40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

160.0%

150,000

200,000

250,000

300,000

350,000

400,000

Media Tablet takes the leadShipment Unit (k) Growth Rate(%)Worldwide Nb and Netbook PC Market

2007 2008 2009 2010 2011(e) 2012(f) 2013(f) 2014(f) 2015(f) 2016(f)

NetB Vol 300 11,210 27,519 29,060 21,998 18,775 17,708 17,335 17,554 17,889

NB Vol 97,192 121,627 125,368 152,921 171,979 191,024 220,473 249,819 285,329 320,145

NB GR(%) 63.5% 25.1% 3.1% 22.0% 12.5% 11.1% 15.4% 13.3% 14.2% 12.2%

NetB GR(%) 145.5% 5.6% -24.3% -14.7% -5.7% -2.1% 1.3% 1.9%

-40.0%

-20.0%

0.0%

20.0%

0

50,000

100,000

,

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Worldwide PC Growth (with Tablet)Shipment Unit (k) Growth Rate (%)

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The convergence trends of ICTs industry

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ConsumerBehavior

The Emerging Digital Content Ecosystem

Increasingly Complex Industry Dynamics in Media Distribution

Media & Entertain‐ment

ConsumerElectronics

DIGITALCONTENTECOSYSTEM

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Service Providers

Multiple Computing Platforms

MobileInternet

3rd GenerationData Center

CloudComputing

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Green IT SystemStorage


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The convergence trends of ICTs industry

C t tC t tConsumerConsumer

Fixed

Mobile WLAN/WiMax

CommunicationsCommunications

SmartSmartMgmt.Mgmt.

Infra

WebService

AP

OS

Search

Audio Video Data

SmartSmartBroadcasting Broadcasting

Reality Reality BroadcastingBroadcasting

InternetInternetTVTV

DTVDTVHDTVHDTV

UDTVUDTV 3DTV3DTV

HDHDDisplayDisplay

ContentContentConsumerConsumer

Broadcasting

Quad PlayQuad Play

Spread Spread ApplicationApplication

Dressing/Food

InteractiveInteractive

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Grid Grid Quantum Quantum

Autonomic Autonomic ConsciousnessConsciousness

Computing Computing

Living

MedicalFoodEducation Entertainment

Transportation

The Driver - Application Convergence

Integration of Video, Data, Voice Functions- Triple Play Service

EPG M lti Vi i TV

IP BasedService

VoiceData

Video

Wi-FiVoIP Phone

Video Phone

PC

Internet Access

Home Shopping

Home Banking Telemedicine

EPG Multi-View i-TV

VODPVR

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E-LearningVoice

Video

Datanetwork Cordless Caller ID phone

OnlineGaming

Source: MIC/III, Sep. 2011

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Network is converging too…

Web 1.0 Web 2.0 Web 3.0

InternetInternet

Internet

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User Access Content User Generate Content User Generate Web

Access by PC Access/Generate by Mobile Access/Generate by All

Device-based Business Application-based Business User-based Business

Vendor-centric Cocompetition OS-centric Cocompetition Platform-centric Cocompetition

The coping strategies

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From Device-based to User-based

1 Device Revenuex $500

Device sales win market share; service sales win wallet share

49 songs x $1.36

67 times

$5300~1 set x $30

x $0.52Service Revenue

$105

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234 times x $0.014

Next Smartphonewith 2-year Contract

Source：MIC，March. 2012

The Key: User/Customer Stickiness

Google: Web centric Apple: User centric

> 50% of Android Smartphone users stick to Android while buying a Smartphone next time…

> 85% of iPhone users stick to iPhone while buying a Smartphone next time…

> 50% of iPad users who have no iPhone will buy an iPhone as their next Smartphone!!

Google: Web-centric Apple: User-centricCloud as Computing Center Cloud for Device Transformation

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Continuous Purchase Complementary PurchaseSource：MIC，Mar. 2012

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The ICT industry outlook and opportunity

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Many killer applications on the way…

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Source：STMicroelectronics，Dec. 2011

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Another Opportunity: Cloud Computing

Cloud Service Cloud Terminal

IT Hardware Industry

IT Software & Service Industry

(Solution) (Device)

Broadband Infra(Equipment)

Cloud DC(System/Equip.)

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Communication & Telecom Industry

All of ICT Industry

• Global ICT makers’ capabilities extend from manufacturing to product concept, product design and services.

ICT’s opportunities under the trend

• As smart, convergence, mobility and personalization are key trends in the global ICT industry, global ICT makers have developed the necessary capabilities to deal with these trends and have expanded their operations accordingly.

• The System Service is an evitable bili f h ICT k i

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capability for those ICT makers in the near future.

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1. In 1996, 8 categories of ICT products covered under the ITA agreement (such as semiconductors, computers, and telecommunications equipment) had a significant impact on expanding global trade in ICT products.


2. However the initial ITA agreement did not cover a number of core ICT products such as DRAM. Moreover, technology has since spawned the creation of hundreds of innovative new information technology products, everything from GPS systems and flat panel displays to e-readers, video game consoles, and remote home and patient monitoring devices as well as an entirely new class of semiconductor chips called multi-component (MCO) semiconductors, many of which are not covered under the ITA’s tariff-eliminating regime

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eliminating regime.


3. After 15 years, it’s time to think about the expansion of ITA agreement, expand product coverage and encourage all WTO members to join the ITA Agreementall WTO members to join the ITA Agreement.

4. As product coverage for ITA expansion, we recommend that ITA expansion should include ICT manufacture equipment, semiconductor process equipment, office peripheral telecommunications and personal computer peripheral equipments, etc.

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p p q p

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Thank You Thank You

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Insight with an Asian Perspective

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