Deloitte: Don’t Ignore the ‘Mass Niche’ Market
By Mark Hilbig
“Even a minority of a significantly large market can be a really big thing,” according to Duncan Stewart, Deloitte Canada’s head of Technology, Media and Telecom (TMT) research. We heard many such sage one-liners at the global launch of his TMT Predictions 2014 report last week. And when Deloitte predicts tech trends, people listen. In this case, Stewart was referring to his concept of the ‘mass niche’ – the idea that smaller markets last year (like wearable devices and phablets) are quickly becoming large enough to drive significant revenue for tech firms. Read on for more.
On January 14th at Toronto’s Metro Convention Centre, some of the biggest names in technology arrived to hear what Deloitte had to say. Giants like Facebook, Google, Rogers and Telus were in attendance, and I also noticed reps from the City of Toronto, Province of Ontario, and even a few start-up firms from local tech incubator the Digital Media Zone (DMZ) at Ryerson University. It was a packed house with both suits and techies listening to the latest technology predictions, and what the game-changers will be in 2014 and beyond.
The mass niche: Phablets and wearables
The day started early with a continental breakfast at 7.30am, followed by an informal networking session. Then it was time for the ever-engaging Duncan Stewart to take the stage. He discussed phablets, the new cross between smartphones and tablets that everyone loves to hate. In spite of this initial consumer rejection, Stewart predicted that sales of the Samsung Galaxy Note 3 and other phablet offerings will double in 2014 and soon make up a $125 billion category! That’s a huge chunk of the global smartphone market. The main growth will come from Asia where the larger screen allows easier texting in Chinese and Korean. But of course, phablet size will be limited by the size of trouser pockets and the ability to text one-handed….which I already find tricky.
As someone who loves innovation and the newest gadgets, I was particularly interested in the idea of a developing mass niche market, as mentioned above. Accounting for 80% of total sales, these items aimed at a smaller market bring in big bucks for their developers because of the premiums they command. Wearables like Google Glass are a perfect example – a relatively small number of consumers for the product, and yet a market projected to exceed $3 billion in 2014.
Forget cord-cutting; ‘cord-stacking’ is the new mantra
Cord-stackers’ is what Stewart labels viewers who have multiple pay-TV subscriptions. By the end of 2014, he projects that over 50 million Canadian homes will subscribe to at least one or more pay-tv services while keeping their basic cable or satellite package. That being said, I find it interesting that the explosion of smartphones and online television still hasn’t made a dent in the average amount of time Canadians spend in front of a television. Clearly, we like watching our hockey live!
Overall, the TMT Predictions launch was a very thought-provoking presentation, especially as Deloitte has been highly successful at nailing tech forecasts each year. In 2013 for example, they were spot-on in over 80% of their predictions! But more importantly, events like this are catalysts for divergent thinking among market leaders. At The Immersion Lab, divergent thinking is a critical component that makes our In-Market Action Learning® methodology so effective in shifting leaders’ approaches to complex business challenges. So it was particularly gratifying to hear Duncan Stewart and his team share observations that many of us had not previously considered. A big thank-you to them for a wonderful morning, and I look forward to seeing how the TMT Predictions will pan out this year.