UK: Deloitte Technology Predictions 2011 - Part 1

FOREWORD

Welcome to the 10th edition of Deloitte's Predictions for the technology, media & telecommunications (TMT) sector.

This annual publication presents Deloitte's view of the major trends over the next 12-18 months that are likely to have significant medium to long-term impacts for companies in TMT and other industries. For example, two of this year's trends are the evolution of battery technology, and the continuing popularity of television, both of which are likely to be relevant for companies in many sectors.

What makes Deloitte's Predictions different from others?

  • Rigorous Research: We use both primary and secondary sources, looking at both quantitative and qualitative data, including hundreds of discussions, thousands of articles and tens of thousands of survey responses.
  • Innovation: We publish only perspectives that we think are new or counter to existing consensus. This includes calling a market where most commentators expect there to be none, or identifying markets where the hype is ahead of reality.
  • Accountability: We try to provide clear Predictions endpoints, so that our accuracy can be evaluated annually.

The goal of Predictions is to catalyze discussions around important topics that may require companies or government to respond. We provide a view on what we think will happen, what will occur as a consequence, and what the implications are for various types of companies. We never presume that ours is the last word on any given topic.

Over the last 10 years, the TMT sector – and its impact on how we work, live, and are entertained – has changed markedly. In fact, there have been too many important developments to list here. But it is worth remembering that the World Wide Web is just 21 years young in 2011, that in 2001 many countries had not yet rolled out national broadband services, and that only three years ago analog cellular networks were still functioning in some of the largest mobile markets.

Another key trend over the last 10 years has been convergence: the technology, media and telecommunications sectors are now more interconnected and interdependent than ever before. With that in mind, this year's Predictions report is for the first time being published as a single report, rather than three separate ones. Deloitte's view is that developments in each sector are now so inextricably linked that TMT executives need easy access to the key trends in all three sectors.

Also for the first time, each of this year's Predictions is available as a video, a podcast and an app as well as written text.

We hope you and your colleagues find this year's Predictions for the TMT sector useful; as always, we welcome your feedback.

Whether you are new to this publication, or have been following our Predictions for years, we thank you for your interest. And to the many executives who have offered their candid input for these reports, we thank you for your time and valuable insights.

We look forward to exploring the next 10 years of TMT developments with you.

Jolyon Barker
Managing Director
Global Technology, Media & Telecommunications
Deloitte Touche Tohmatsu Limited

TECHNOLOGY

Smartphones and Tablets: More Than Half of all Computers Aren't Computers Anymore

Deloitte predicts that in 2011 more than 50 percent of computing devices sold globally will not be PCs1. While PC sales are likely to reach almost 400 million units2, Deloitte's estimate for combined sales of smartphones, tablets and non-PC netbooks is well over 400 million. Unlike the 2009 netbook phenomenon, where buyers chose machines that were essentially less powerful versions of traditional PCs, the 2011 computing market will be dominated by devices that use different processing chips and operating systems than those used for PCs over the past 30 years (see Figure 1).

This shift has prompted some analysts to proclaim that "The era of the PC is over"3. Deloitte's view is that this is not the case: traditional PCs will still be the workhorse computing platform for most of the globe in 2011. PC unit sales are expected to rise by more than 15 percent year-over-year, and the global installed base of PCs stands at over 1.5 billion units4. At the end of 2011, non-PC computers will still represent only about 25 percent of all computing devices.

However, when looking at the future of computing devices, 2011 may well mark the tipping point as we move from a world of mostly standardized PC-like devices, containing standardized chips and software, to a far more heterogeneous environment.

How varied will this new environment be? Deloitte predicts there will be at least two substantially different chip architectures5 and at least 5 different operating systems that each have more than five percent market share.

This more diverse computing world is expected to change some of the basic assumptions about the business model for computing devices.

In the PC environment, the average profitability of consumer software companies has generally been lower than for other software companies in recent years: an average net profit margin of less than 10 percent, compared with an average of 21 percent for all application software companies6. Also, consumer software companies have been growing more slowly than the overall application industry.

In the non-PC world, although app adoption is still in its infancy, the industry is forecast to enjoy 60 percent growth in 2011 to over $10 billion7. Most of this revenue is expected to come from paid-for apps, with only about 10 percent from in-app advertising8. The app industry in aggregate does not seem to be very profitable: one estimate suggests that it takes the average app developer 51 years to break even9. However, leading apps companies appear to be significantly more profitable than average. Although many are private and do not publicly disclose their net profits, M&A valuations suggest expected profitability levels much higher than the single digits of PC software companies.

Manufacturing non-PC computing devices should also be substantially more profitable than making PCs. PC Original Equipment Manufacturers (OEMs) have averaged 10 percent gross profits in recent years, with 2 percent net margins. By contrast, the leading smartphone and tablet makers generate gross profits of 40-60 percent and operating margins of 25-40 percent10.

Distribution is expected to become more profitable as well. Traditional PC distribution gross margins average about 5 percent11. Although separate figures for the entire tablet and smartphone distribution industry are not public, some distributors are reporting operating margins of 15 percent, which imply gross margins over 30 percent12.

There will also likely be expanded service opportunities. Although many of these non-PC alternatives are marketed as "easy to use", the bewildering array of hardware and app choices makes it more likely buyers will be willing to pay for help selecting the best or most industry-appropriate devices and apps – along with subsequent integration, maintenance, and support13.

Bottom Line

In 2011, buyers of computing functionality, whether in the enterprise or consumer sector, will face some interesting choices. In the past, most computer buyers purchased similarly configured machines at similar prices on similar replacement cycles. Although not quite as limited as the infamous paint options on Henry Ford's Model T – "any color so long as it's black" – the range of variation for PCs was quite narrow. But in this new era where more than half of all new computing devices sold are non-PCs, the ranges of price, performance, form factor and other variables will be at least an order of magnitude wider. Choosing will take longer, and will need to be done more carefully.

For IT departments, the cost of managing a mixed network of both PCs and non-PCs is likely to be much higher than standardizing on one or the other. Yet employees are increasingly being allowed to pick their own devices, and tens of millions have already done so – especially smartphones14. If given a choice, some employees will pick PCs, some will pick non-PCs, and some will pick both! Reconciling these two trends and determining the true total cost of ownership will present a significant learning curve.

There will also be major challenges for software and peripheral developers. In the traditional PC world, software that ran on one machine generally ran on billions of others. The same was true for peripherals, as long as they complied with standard APIs. But in the more fragmented world of 2011 and beyond, software and hardware will likely require more customization, and developers may need to pick and choose which platforms they develop for, knowing that they cannot afford to address all markets simultaneously.

Operating System Diversity: No Standard Emerges on the Smartphone or Tablet

Smartphones and the new generation of tablets have three things in common: (1) they use similar, low-powered 1GHz processors; (2) they are being used like personal computers, although they are not personal computers; and (3) Deloitte predicts that by the end of 2011 no operating system on these devices will have a dominant market share. Some will have more than a 5 percent share, but no single player will have yet become the de facto standard, as has been seen in other computing ecosystems in the past.

The emergence of a de facto standard is very important to everyone involved in the smartphone and tablet markets (i.e., "non-PC computing devices"). Technology industries with a single dominant provider of hardware or software tend to have economics very different from those with multiple providers.

Moreover, the non-PC computing market is becoming increasingly important: Deloitte predicts that in 2011 more than half of all computers sold – over 400 million units – will be devices that are not PCs15. In 2012 and beyond, non-PCs' will likely extend this lead. Being the dominant operating system (OS) provider for non-PCs would be a tremendous prize; however, a clearly dominant OS seems unlikely to emerge in 2011.

The obvious value of being the standard OS for non-PCs is one reason why a single player is unlikely to dominate. The company that popularized the PC was very adept at making both operating systems and central processing unit (CPU) chips. But when it decided to launch its new computing device, it did not source its OS or CPU internally; neither did it select other large OS or CPU manufacturers. Instead it turned to companies that were relatively small at the time16. No one expected that PCs would sell in their billions generating trillions of dollars over the next three decades17. In contrast, the potential value of the non-PC market is already obvious.

In the history of computing devices, no company has ever become the standard OS after it was clear that the value of the technology involved was likely to be tens of billions or more. The smartphone and tablet markets are already generating hundreds of billions in revenues, and are expected to keep growing rapidly: everyone knows there is "gold in them thar hills."

Equally important, existing competition in the non-PC market seems unlikely to fade any time soon. In both the smartphone and tablet markets, the top five OS companies based on market share each enjoy annual revenues in the tens of billions: have billions in cash: are growing their top and bottom lines: and are gaining ground with consumers. Even companies that are losing market share are still growing in absolute terms. None appears ready or willing to abandon the market, there is no shareholder pressure to exit, and all should have more than enough resources to develop new products and market them to mass audiences.

Mobile network providers seem as unlikely to allow a dominant OS as the OS competitors themselves. Providers appear to actively encourage OS diversity, even if they seldom state this explicitly. Whenever any operating system or device maker, in any geography or segment, approaches 50 percent market share, the carriers seem to deploy their marketing muscle, retail presence, and subsidies to push one device or OS over another. There is even a name for this strategy: carriers pick "hero" devices and push them hard. This approach can cause major swings in market share within a single quarter18.

Device manufacturers also seem to believe that a diverse OS ecosystem is in their best interest. Perhaps seeing the commoditization of some technology industries where de facto standards do exist has shown them that having different operating systems to choose from allows them to differentiate their products more effectively, strike better deals with network providers, and generally achieve higher margins.

With all of these major players fighting to prevent an industry-wide standard OS from emerging, it seems that only a nearly irresistible force could make it happen.

One possibility for such a force is the "network effect."19 As an emerging standard becomes more and more prevalent, it can rapidly reach a tipping point where the number of users on its platform relative to others gives it overwhelming momentum. Software developers embrace the platform because it has the most users, which leads to new apps that attract even more users, and so on – creating a virtuous circle that eventually locks the platform in as the de facto standard.

However, unlike other markets where network effects have created industry-wide standards, both smartphone and tablet devices are highly fragmented at the hardware level, and are likely to remain so. The variety of screen sizes, CPUs, text inputs, form factors, and other configurations means that no single OS version addresses a sufficiently large percentage of devices to create a powerful network effect.

A market that revolves around a standard OS offers the advantage of simplicity: if an application works on one device, it can be counted on to work almost everywhere and with nearly all devices. The current non-PC market is more complex and fragmented, but looks like it may be the new reality. With fewer than half of all new computing devices being PCs, and if no non-PC OS becomes dominant, it is mathematically impossible for any OS to have more than a 75 percent share of all new computing devices.

Bottom Line

Many stakeholders would be affected if a standard tablet or smartphone OS does not emerge in the near term. As noted earlier, mobile network providers, device makers, and software companies are all intimately involved and all have a keen interest in the battle. However, there are three other groups with a significant stake as well.

Application developers might need to get comfortable in a world where they must pick and choose their platforms. If a clear standard emerges, then their choice is made for them. But in the more fragmented OS world that seems likely, no app developed for a single platform can address the entire market. Developing customized apps or versions for each OS requires significant time and money (typically $5,000-500,000, depending on complexity20), so it is likely that many smaller developers will not be able to address all markets.

Media companies face a similar challenge. In general, ad-supported media are looking for the largest possible audience. In the PC market, the platform with the largest audience was clear. However, in a diverse, non-PC computing market, publishers will probably need to prioritize some audiences over others, or even exclude some entirely.

Finally, IT departments are likely to face significantly higher costs to support this new, more diverse technology environment. Administering a traditional PC computing ecosystem centered on a single OS can cost thousands of dollars per employee per year21. Supporting five times as many operating systems is unlikely to require fewer people and less money. Yet telling employees to go back to the days when they had to standardize on one OS or device seems impossible: that particular genie left the bottle long ago. Given these trends, the cost of IT support seems set to rise.

Tablets in the Enterprise: More Than Just a Toy

Deloitte predicts that in 2011 more than 25 percent of all tablet computers will be bought by enterprises, and that figure is likely to rise in 2012 and beyond. Although some commentators view tablets as underpowered media-consumption toys suitable only for consumers22, more than 10 million of the devices will likely be purchased by enterprises in 2011. Consumer demand for tablets is forecast to remain strong; however, enterprise demand is likely to grow even faster, albeit from a lower base.

Four main factors are driving tablet adoption in the enterprise market.

First, and already the most apparent, many consumers initially buy tablet computers as personal media devices, but quickly discover they are also useful for work. Employees are asking their firms to support tablets for various work tasks, including accessing the enterprise network. And some people who end up using their tablets predominantly for work are asking their employers to cover the cost of their data plans, or even the cost of the device itself.

It appears that by the end of 2011 a significant number of firms may be willing to pay for their employees' tablets and data plans. By some estimates, 70-80 percent of Fortune 500 companies will support at least one tablet variant for some portion of their workforce23; millions of prosumers will have their tablet data plans at least partially subsidized by their employer; and millions more tablets will be purchased by companies as PC alternatives24.

Second, certain industry verticals seem poised to start using tablets in fairly large numbers over the course of the year; in fact, trials are already underway. The retail, manufacturing, and healthcare industries are considered the most likely early adopters, primarily owing to the tablet's ease of use, long battery life, lack of moving parts, minimal need for training and rapid app development environment. Deloitte predicts that during 2011 up to 5 million tablets could be deployed in retail and healthcare alone.

In retail, a tablet can serve as both an easy-to-use, constantly updated catalog, as well as a point-of-sale terminal (when equipped with an optional card reader). These compelling applications make it likely that retail will be the largest enterprise tablet market in 201125. Healthcare will probably see a number of trials, but the traditional conservatism of healthcare authorities, administrators, and practitioners will likely mean that fewer than one million devices will be deployed in healthcare environments by the end of the year26.

Third, enterprise software providers are rapidly responding to Fortune 500 customer requests for tablet-specific software. Large players in ERP, ECM, CRM, and other enterprise applications are combining with desktop virtualization providers to create secure enterprise-grade apps that can seamlessly and rapidly be deployed into even the largest company's existing IT environment27. Enterprise software providers are also embracing the new technology themselves, with one company rolling out tablets to 35 percent of its employees in 201128.

Fourth, the tablet form factor itself is driving adoption in the boardroom. Unlike laptops and smartphones, both of which create an obvious physical barrier between the user and others in the room, a tablet can be placed flat on a conference table and accessed unobtrusively29.

These four growth drivers are likely to foster significant tablet diversity. Although certain form factors and operating systems dominated the market initially, the different requirements of various enterprises mean that one size will probably not fit all. Fortunately, tablets will be offered in multiple sizes in 2011. For use as catalogs in retail, a 10 inch diagonal display might be optimal; but for processes requiring portability, such as accident inspection, a smaller 7 inch device would be lighter and probably less expensive.

Some enterprises and their IT departments have strong preferences for certain operating systems (OS), and strong aversions to others. Assuming that tablets will be connected to the rest of the enterprise IT environment, it is reasonable to expect that OS market shares in enterprise tablets might closely mirror OS market shares in smartphones and PCs.

Bottom Line

For an enterprise, a key challenge will be deciding whether to support multiple types of tablets or standardize on a single type. Employees often prefer to choose their own devices; however, IT support costs rise with device diversity. Balancing the IT department's desire for a single, cost-effective solution against employees' desire for freedom of choice will likely be just as challenging with tablets as it is with smartphones.

Price is a very important issue for enterprises, especially in the current economy. Enterprises (and tablet manufacturers) will need to carefully weigh the various trade-offs. Do enterprise tablets need cameras? Do they need to have the largest possible screen? Is Wi-Fi good enough, or do they need a more expensive 3G radio – and the data plan that goes with it?

The new breed of tablets is not designed to be particularly rugged. In the past, a variety of ruggedized tablets30 were available; however they tended to be 2-3x heavier than the new tablets and 3-5x more expensive31. Although they continue to have their devoted fans, they were not mass market devices. For those who worry that the new tablets might not be tough enough for constant use in the field, it is worth remembering that workers sometimes treat ruggedized devices less carefully, which can make such devices even more prone to damage. Ultimately, the most effective "ruggedization" is to produce a machine that the workforce values and takes care not to break.

Security is already being discussed as a potentially big issue for enterprise tablets. In some ways tablets are more secure than PCs – at time of writing no tablet-specific virus has been reported, and most don't even have USB ports, eliminating a common security weak point. On the other hand, tablets are small, portable and a popular target for thieves. As a new device, tablets should probably be presumed insecure until proven otherwise.

App development will need to be monitored closely. Cost per app can range from $5,000-$500,000 (depending on complexity), so not all enterprises will be able to develop an app for every type of tablet; nor will they be able to fund a large number of custom apps for employees. Although some firms are proposing the deployment of web apps that run through a browser and therefore work on any tablet, the likely reality in 2011 is that only native apps will provide the full tablet experience and be capable of interacting with the devices' built-in cameras, radios, calendars and push capabilities32.

eGov: From Option to Obligation

In 2011 Deloitte predicts e-government (eGov) usage will reach an inflection point. Across developed countries, the proportion of businesses that use eGov services for at least one process is expected to average over 90 percent, up from 75 percent in 2010. Similarly, the proportion of citizens that use eGov in industrialized countries should rise by at least 10 percentage points. In some countries, the importance of eGov as a way to boost public sector productivity and efficiency may even prompt the appointment of a national Chief Information Officer (CIO) where one did not exist previously33.

Rising demands for government efficiency and productivity will likely provide a major push for greater adoption of existing eGov platforms and, in some countries, increasing e-government roll-out34. Use of online channels may increasingly be mandatory;35 this should boost the return on investment for e-government infrastructures. For example, according to one estimate, mandating electronic invoicing could save the equivalent of 0.8 percent of GDP annually36.

Over the last decade, governments around the world have collectively invested billions of dollars to deploy an array of e-government infrastructure, from tax returns to building permits37. However, use of these portals varies considerably. In most cases, eGov has been positioned as an additional channel for citizens and businesses to interact with the government38. Only rarely has it been mandated39.

In the past, one of the main problems with mandating eGov was the risk of excluding certain segments of society, such as those without Internet access or those who might find online self-service portals too difficult to use. However, now that most consumers and almost all businesses are active online, in some countries eGov use needs to catch up with the times, and start being positioned as the primary channel, not an optional one. For example, Figure 2 shows household Internet use compared with the use of eGov in Europe. In all countries there is a significant gap, with Internet use outpacing eGov use by an average of more than 20 percent. And in some countries, the gap is as large as 50 percent.

Use of e-government by businesses has also been limited – albeit not necessarily due to business' reluctance: in some cases online channels were simply not available. For example, in some territories it has only been possible to submit an electronic invoice since February 201041.

In other cases, the ability for agents to submit returns on behalf of their clients has been complicated by the assignment of a single sign-on and password per company, making it impossible for agents to submit accounts online for multiple clients. In many cases, the ability for government agencies to correspond by email with companies and their agents was still either "scarce" or "unavailable" at the end of 201042.

For central and local governments, eGov has tended to create additional costs, as it was often layered on top of existing communication channels. In addition, potential eGov savings were sometimes reduced through flawed internal processes that required data to be transcribed manually by one department's staff and then re-keyed manually by another department's staff just to get information flowing43.

For citizens, eGov is most likely to gain traction for services used predominantly by younger age groups, such as student loan applications and temporary driver's licenses44. But over time, use of traditional channels such as walk-in centers and call centers may be restricted to exceptional cases only: there will always be citizens who cannot afford to go online, or else are unable to use online channels. Also, governments will likely insist that digital data be usable across departments. This will require standardized processes for electronic data gathering, as well as consistent formatting standards, such as extensible business reporting language (iXBRL)45.

As for emerging countries, deployment of eGov is typically limited by two key constraints: technology rollout and literacy. For example, only 15 African countries have an Internet penetration higher than 10 percent. However, in emerging countries that have limited fixed broadband infrastructure, mobile communications could play a key role, as the latter tends to enjoy greater penetration. For example, in India in H1 2011 the mobile subscriber base is expected to be in the region of 800 million46. This compares with 11 million broadband subscribers47. In such contexts, focusing on eGov via mobile is likely to be a key way forward, particularly in the medium-term.

One Indian state, Rajasthan, has launched an eGov service that relays essential information to the public, including rural pensioners, the elderly, and disabled via mobile phone. Updates on everything from approval of pensions to information alerts are provided via this channel48.

The system also includes text to speech conversion to address the needs of those with low literacy.

Emerging countries that already have eGov portals in place are likely to expand the range of citizen online services to include ancillary services such as healthcare49. In 2011, foreign aid and investment in developing countries may also help drive eGov projects50.

Bottom Line

While mandating use of eGov is mostly about improving productivity of existing technology assets, administrations should not overlook technology's capability to improve a country's attractiveness to foreign investors and key talent. Efficient digital communication and transaction channels can position a country positively, much in the same way that leading physical infrastructure can. While many governments, particularly those in industrialized countries are likely to remain focused on cost, the medium-term strategic benefits of digital government should remain on the agenda.

In emerging countries where pressures on local and central government budgets may be less severe, administrations should use eGov solutions to enable rapid economic growth without having to create an equal or greater expansion of government infrastructure and bureaucracy51.

The fact that some segments of society are not computer-literate or lack online access should be viewed as an important but not insurmountable barrier to eGov. In fact, a principal enabler of any new process or application is accessibility, which itself is a function of good design52. If eGov applications are available in versions designed to maximize accessibility, they could actually serve as an entry point to get more people to use computers and the Internet. In some cases the entry point is likely to come via Internet connected mobile phones – each country needs to assess which technological platform is most pervasive and fit for use.

Governments should also consider whether social networks could provide one channel for communicating with citizens.

Migration to electronic filing of company reports, based on the iXBRL standards, will likely require tax collection agencies to develop new skill sets. For example, there might be less need to review documentation and make basic calculations, but greater need to analyze complex patterns of data and identify situations requiring investigation across companies.

Leaders in emerging markets should consider treating eGov and e-commerce infrastructure projects as prerequisites for economic growth, on par with roads and ports/border security. This may provide their countries with real opportunities to accelerate the pace at which they close the gap with developed economies.

To read Part 2 of Deloitte Technology Predictions - 2011 please click here

Footnotes

1. So what is a PC? Almost all laptop, desktop and netbook computers sold in 2009 and before were based on a common architecture. There were some variations in operating system, but almost all of them ran on chips that still were compatible with the original x86 architecture specified by the developer of the PC in 1981. In contrast, almost all of the non-PC devices (smartphones and tablets) that are expected to ship in 2011 will NOT use that architecture, those chips or any of the various PC operating systems. There are exceptions: in some markets some devices that look like PCs use different chips (mainly netbooks) and some tablets are expected to ship with chips and OS that are from the PC ecosystem. But the exceptions are just that, and are expected to be less than 5 percent of either market.

2. PC Sales Forecast Cut Further as Tablet Market Grows, Gartner estimates cited in an article from Channelinsider, 30 November 2010: http://www.channelinsider.com/c/a/Spotlight/PC-Sales-Forecast-Cut-Further-as-Tablet-Market-Grows-Gartner-711349/

3. IDC Predicts Cloud Services, Mobile Computing, and Social Networking to Mature and Coalesce in 2011, Creating a New Mainstream for the IT Industry, IDC, 2. December 2010: http://www.idc.com/about/viewpressrelease.jsp?containerId=prUS22593310§ionId=null&elementId=null&pageType=SYNOPSIS

4. Installed base of PCs to hit 2B units by 2014, Gartner, 5 May 2010, cited in EE Times Asia, 2 July 2008: http://www.eetasia.com/ART_8800532355_1034362_NT_0f60f95b.HTM and http://www.gartner.com/DisplayDocument?id=1364917

5. In the PC world, although there is more than one chip supplier, the two major manufacturers produce chips that are substantially similar to each other at the architectural level: x86 compatible Complex Instruction Set Computer (CISC) able to be used virtually interchangeably in most PCs with only minor modifications.

6. Yahoo! Finance, Application Software Companies: http://biz.yahoo.com/p/821conameu.html used as a screen, and excluding OS providers.

7. Mobile App Marketplace: $17.5 Billion by 2012, GetJar report dated 17 March 2010 cited in TechCrunch, 17 March 2010: http://techcrunch.com/2010/03/17/getjar-mobile-app-sales-will-overtake-cd-sales-by-2012-video/ and http://blog.getjar.com/developer/sizing-up-the-global-apps-market/

8. Gartner Says Consumers Will Spend $6.2 Billion in Mobile Application Stores in 2010, Gartner Press Release, 18 January 2010: http://www.gartner.com/it/page.jsp?id=1282413

9. Full Analysis of iPhone Economics – it is bad news. And then it gets worse, Tomi T Ahonen Blog posted on 'Communities Dominate Brands' Website, 22 June 2010: http://communities-dominate.blogs.com/brands/2010/06/full-analysis-of-iphone-economics-its-bad-news-and-then-it-gets-worse.html

10. Phone incumbents' average operating margin: 4.5%. RIM and Apple: 34%, Asymco, 13 August 2010: http://www.asymco.com/2010/08/13/phone-incumbentsaverage-operating-margin-4-5-rim-and-apple-34/

11. Tech Data Corporation Reports Fiscal 2011 Third-Quarter Results, 22 November 2010: http://phx.corporate-ir.net/phoenix.zhtml?c=115264&p=irol-newsArticle&ID=1499128&highlight

12. Glentel Q3 2010 Quarterly Report, Glentel website: http://www.glentel.com/images/financials/123/Glentel-Q3-Report-WEB-Nov-10.pdf pages 18 and 27 for retail distribution operating income.

13. Deloitte Predictions interviews conducted in November 2010 with wireless carriers in Europe and North America suggest that they see significant service revenue opportunities in the small and medium business segments for mobile and tablet app selection and maintenance.

14. The End Of The BlackBerry Elite, Forbes, 20 April 2010: http://www.forbes.com/2010/04/20/smartphone-mobile-iphone-technology-cio-network-blackberry.html

15. For more discussion on this theme, please see the prediction "End of an era: more than half of all computers aren't computers anymore", Technology, Media and Telecommunications Predictions, Deloitte Global Services Limited, January 2011

16. How the PC Really Got Started, Fast Company, 19 December 2007: http://www.fastcompany.com/articles/archive/pc_bday.html

17. "There is no reason anyone would want a computer in their home." – Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977 to the World Future Society

18. Smartphones shifting power from carriers to OEMs: Yankee Group report dated 8 June 2009 http://www.yankeegroup.com/ResearchDocument.do?id=51584

19. Network effect definition from PC Magazine Encyclopedia: http://www.pcmag.com/encyclopedia_term/0,2542,t=network+effect&i=47879,00.asp

20. How much does it cost to develop a mobile app on iPhone, Android and other platforms? Mobile Marketing Universe website, 7 September 2010: http://goldengekko.blogspot.com/2010/09/what-are-costs-of-developing-mobile-app.html

21. Gartner Says Effective Management Can Cut Total Cost of Ownership for Desktop PCs by 42 Per cent, Gartner Press release, 10 March, 2008: http://www.gartner.com/it/page.jsp?id=636308

22. Tablets are Toys (Not Mainstream Machines), ReadWrite Enterprise, 4 August 2009: http://www.readwriteweb.com/enterprise/2009/08/tablets-are-toys-notmainstream-machines.php

23. Sprint Says 4G Tablet Coming In 2011, 80% Of CIOs Want To Buy Tablets, Forbes, 9 December 2010: http://blogs.forbes.com/elizabethwoyke/2010/12/09/sprintsays-4g-tablet-coming-in-2011-80-of-cios-want-to-buy-tablets/

24. AT&T to sell the iPad to Businesses, Mashable, 15 October 2010: http://mashable.com/2010/10/15/att-ipad-businesses/

25. iPad Poised to Revolutionize Retail Industry, Advertising Age, 21 April 2010: http://adage.com/digital/article?article_id=143416

26. With the iPad, Apple may just revolutionize medicine, The Washington Post, 11 April 2010: http://www.washingtonpost.com/wp-dyn/content/article/2010/04/09/AR2010040906341.html

27. SAP NetWeaver on iPad, SAP website, 5 July 2010: http://en.sap.info/apps-ipad-citrix-office/35854/print

28. SAP To Deploy Up To 17,000 iPads In 12 Months, ZDNet, 7 September 2010: http://www.zdnet.com/blog/sybase/sap-to-deploy-up-to-17000-ipads-in-12-months/414?tag=mantle_skin;content

29. Gartner to CEOs: Seize the iPad Opportunity Now, Gartner, 4 November 2010: http://www.gartner.com/it/page.jsp?id=1462813

30. Rugged Tablet PC by MobileDemand: http://www.ruggedtabletpc.com/ as one example.

31. The 2010 Group Mobile Best Sellers Guide, GroupMobile Website; http://www.groupmobile.com/bestof.asp

32. Web Apps vs. Native Apps, GigaOm, 30 September 2010: http://gigaom.com/2010/09/30/mobilize-2010-native-mobile-apps-will-be-with-us-for-some-time/

33. New Zealand's newly appointed Government CIO starts his role on 2 February 2011. Source: Push for e-government creates CIO position, Computerworld, 23 November 2010: http://computerworld.co.nz/news.nsf/news/push-for-e-government-creates-cio-position In some countries, e.g. the U.S., this role already exists.

34. XBRL submission of company accounts and other business reporting should drive significant cost savings for governments and businesses. See: XBRL FOR TAX, BANKING, CORPORATE ACTIONS AND CAPITAL MARKETS EXPANDING GLOBALLY, http://www.xbrl.org/LatestNews/; For a view on drivers for e-government adoption in Pakistan, see: PM for adoption of modern ICT applications to improve efficiency of public sector organizations, Associated Press for Pakistan, 26 December 2009: http://www.app.com.pk/en_/index.php?option=com_content&task=view&id=92666&Itemid=2

35. For details of the UK's "digital by default" strategy, announced 22 November 2010, see: Digital by default proposed for government services, CabinetOffice UK, 25 November 2010: http://www.cabinetoffice.gov.uk/news/digital-default-proposed-government-services

36. E-Invoicing Could Help Save European Economy Millions And Support Growth – Gertrude Tumpel-Gugerell, European Central Bank, eGov Monitor, 28 April 2010: http://www.egovmonitor.com/node/36005

37. E-government is not a financial cure-all, Guardian, 6 April 2010: http://www.guardian.co.uk/commentisfree/libertycentral/2010/apr/06/smarter-government-costs-services

38. In the EU, where electronic invoice submission is an option, and one which was first effected in February 2010. Source: European Commission Receives Its First Electronic Invoice From Supplier in Feb 2010, eGov Monitor, 26 February 2010: http://www.egovmonitor.com/node/34057

39. For example in Denmark, electronic submission of invoices for jobs done for the government has been mandatory since 2005. Source: e-Invoicing in Denmark, eGov Monitor, 10 July 2006: http://www.egovmonitor.com/node/6669; Finland will mandate electronic submission of invoices to the public sector by end 2010. Source: E-Invoicing Could Help Save European Economy Millions And Support Growth – Gertrude Tumpel-Gugerell, European Central Bank, eGov Monitor, 28 April 2010: http://www.egovmonitor.com/node/36005; also see: Mandatory Requirements (E-government in New Zealand), http://www.e.govt.nz/programme/agency-checklist/mandatory-requirements

40. For further information, please see: http://epp.eurostat.ec.europa.eu/portal/eurostat/home

41. European Commission Receives Its First Electronic Invoice From Supplier in Feb 2010, eGov Monitor, 26 February 2010: http://www.egovmonitor.com/node/34057

42. ICAEW survey on HMRC service standards, ICAEW, 19 November 2010: http://www.ion.icaew.com/TaxFaculty/21018

43. For a discussion on the need for data to be exchangeable between departments, see: E-government is not a financial cure-all, Guardian, 6 April 2010: http://www.guardian.co.uk/commentisfree/libertycentral/2010/apr/06/smarter-government-costs-services

44. For a view on the UK's plans for deeper use of e-government channels, see: Government plans to put services online 'could widen the digital divide', The Telegraph, 21 November 2010: http://www.telegraph.co.uk/technology/broadband/8149609/Government-plans-to-put-services-online-could-widen-the-digital-divide.html

45. For more information on XBRL, see: http://www.xbrl.org/Home/ and www.deloitte.com/iXBRL

46. iSuppli report, 22 September 2010, cited in an article in TechWorld, 23 September 2010: http://www.techworld.com.au/article/361947/rural_markets_hold_key_india_mobile_growth/ and http://www.isuppli.com/Mobile-and-Wireless-Communications/News/Pages/India-Cell-Phone-Penetration-to-Reach-97-Percent-in-2014.aspx

47. Broadband Subscriptions in India, eMarketer, March 2010.

48. Rajasthan Government reaches Underprivileged via Mobile Phone, eGov News, 11 May 2010: http://www.egovonline.net/news-list/34-news/8227-rajasthangovernment-reaches-underprivileged-via-mobile-phone-.html

49. For example Kenya's AfriAfya, a network of Kenya's largest health NGOs, is using technology to improve community health in rural areas. In Algeria, an H1N1 flu information portal has been set up for citizens and healthcare providers. eGovernment innovations are likely to include: new means of communications, e.g. in Benin eGovernment portals now include podcasts and online forums; Ghana's government portal uses social media tools such as YouTube; Facebook contacts of key ministerial staff are available. Cape Verde has started implementing e-government by allowing e-voting, which has helped the country tally votes within minutes of poll closings and avoid conflicts about results. Gujarat introduced e-voting in 2010. Source: Gujarat introduces e-voting in civic elections, Gujarat Global News Network, 28 July 2010: http://www.gujaratglobal.com/index.php?option=com_content&task=view&id=2159&Itemid=38

50. Uganda's national data backbone and eGovernment implementation, which is in its first phase of implementation, is financed by a US$110 million loan from the Chinese government and infrastructure from China's Huawei Technologies. Source: Huawei Technologies: China's Go-To Company for African ICT Infrastructure Investments, ICTworks, 7 April 2010: http://www.ictworks.org/network/ictworks-network/359; Korea's Ministry of Knowledge Economy and the Korean Trade-investment Promotion Agency, KOTRA recently pledged to help the governments of Kenya and Tanzania by sharing its technological knowledge. Source: Africa e-government study to get underway, DatacenterDynamics, 15 November 2010: http://www.datacenterdynamics.com/ME2/dirmod.asp?sid=&nm=&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=2F41921D4E424A67A58EA3E77C6D7DDF

51. For example in Dubai, AED 1.1 billion was collected via its ePay payment gateway during the first half of 2010, a 60 percent year-on-year increase. Source: Popularity of ePay growing, says Dubai eGovernment, ITP.net, 11 August 2010: http://www.itp.net/581404-popularity-of-epay-growing-says-dubai-egovernment

52. For an example of how a new computer form facto made technology accessible to a 99 year old, see: iPad has 'changed' 99-year-old woman's life, CNET News, 22 April 2010: http://news.cnet.com/8301-13506_3-20003192-17.html and a video on 'Virginia's new iPad': http://www.youtube.com/watch?v=ndkIP7ec3O8

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