Deloitte Report: Search, Girls' Video Games, Subscription Radio Top Trends for 2006; Mobile TV, 3G Likely to be Laggards

Deloitte Report: Search, Girls' Video Games, Subscription Radio Top Trends for 2006; Mobile TV, 3G Likely to be Laggards

Deloitte Identifies Top Trends in Tech, Media and Telecom Sectors for 2006;

Also Predicts Digital Divide Will Grow

HONG KONG, April 6 /Xinhua-PRNewswire/ -- Deloitte's Technology, Media & Telecommunications (TMT) industry group predicts that, in 2006, search will displace email as the most used digital application, girls will hit the video games, and subscription radio will soar. At the same time, mobile television will disappoint, 3G adoption will be slower than expected, and the digital divide will grow.

"While the technology, telecom and media/entertainment industries are certainly converging," said Charles Yen, Leader of Deloitte China's TMT Group, "we have identified the key trends in each sector that we expect for 2006. There will be some big winners and some big losers -- and some, like always, that gain acceptance at a slower rate than their initial hype forecast."

Key trends identified in the reports include:

Technology

-- Search displaces email as the most-used application -- due to rising
functionality, higher speed connectivity, and the 20 exabytes of new
digital data expected to be created in 2006. At the same time, we're
unlikely to see major advances in search engine user interfaces,
implying even more potential value to be captured in the future.
-- Connectivity transforms devices into services -- devices from cameras
to cars will be able to be remotely upgraded and updated. Updates
will extend from personal computers and mobile phones to GPS
receivers, in-car computers, and set-top boxes, creating an
opportunity for manufacturers to improve their understanding of
customer needs, provide higher quality service and identify new
revenue opportunities.
-- The "digital divide" deepens, rather than improves -- historically,
the digital divide has been most noticeable between developed and
developing countries. This is likely to continue in 2006. Efforts
to bridge the digital divide fail to address the underlying problems,
including economic, political and social issues. Those on the
"losing" end of the divide will be increasingly disadvantaged by
their lack of access to the media, to the internet, to electronic
communications, and to information.

Telecom

-- A frustrating year for 3G -- customers' needs are being met by
existing standards; they don't understand the benefits of 3G and why
they should pay for them. 3G will add tens of millions of
subscribers, but nowhere near enough to pay back the tens of billions
of dollars invested. 2G will continue to represent most of the
growth, revenue and margin for the mobile sector.
-- Connectivity inside everything -- the telecom industry will
capitalize on maturing machine-generated communications to build
connectivity inside machines and devices, resulting in remote process
monitoring, asset tracking, traffic flow monitoring and more.
-- MVNO takes off -- telecom providers are looking for new sources of
revenue, content companies are looking for new channels, and
companies of all types want to leverage their loyal customer bases.

Media & Entertainment

-- Mobile television disappoints -- while it will be promoted as the
next big thing, and tens of millions of promotional dollars will be
spent, consumer acceptance will lag.
-- Video games seek new audiences -- in the wake of the success of new
video game platforms, the industry will strive to sustain its growth
by creating a considerably larger audience. It will reach out to
new demographics, most notably young girls.
-- Subscription radio 2.0 -- radio will follow television as its
business model evolves from being advertising-dominated to
subscription-dominated, providing added flexibility for customers
and new opportunities for providers. New delivery mechanisms, such
as internet-based services, will be launched. There are currently
over 12 million US satellite radio subscribers; this market is
expected to grow 35% through the end of the decade.

Full reports on Deloitte's predictions for the Technology, Media and Telecom industries are available at www.deloitte.com/research/tmt .

About TMT

The DTT TMT Industry Group consists of the TMT practices organised in the various member firms of DTT and includes more than 5,000 member firm partners, directors and senior managers supported by thousands of other professionals dedicated to helping their clients evaluate complex issues, develop fresh approaches to problems and implement practical solutions. There are dedicated TMT member firm practices in 45 countries and centres of excellence in the Americas, Asia Pacific and EMEA. DTT's member firms serve nearly 85 percent of the TMT companies in the global Fortune 500. Clients of DTT's member firms' TMT practices include some of the world's top software companies, computer manufacturers, wireless operators, satellite broadcasters, advertising agencies and semiconductor foundries -- as well as leaders in publishing, telecommunications and peripheral equipment manufacturing.

About Deloitte Touche Tohmatsu

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of 120,000 people worldwide, Deloitte delivers services in four professional areas-audit, tax, consulting and financial advisory services and serves more than one-half of the world's largest companies, as well as large national enterprises, public institutions, locally important clients and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas.

As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu" or other related names.

About Deloitte's China practice

Deloitte's China practice provides services through a number of legal entities and those entities are members of Deloitte Touche Tohmatsu (Swiss Verein).

We are one of the leading professional services providers in the Chinese Mainland, Hong Kong SAR and Macau SAR. We have more than 5,000 people in ten offices including Beijing, Dalian, Guangzhou, Hong Kong, Macau, Nanjing, Shanghai, Shenzhen, Suzhou and Tianjin.

As early as 1917, we opened an office in Shanghai. Backed by our global network, we deliver a full range of audit, tax, consulting and financial advisory services to national, multinational and growth enterprise clients in China.

We have considerable experience in China and have been a significant contributor to the development of China's accounting standards, taxation system and local professional accountants. We also provide services to around one-third of all companies listed on the Stock Exchange of Hong Kong.

For more information, please visit our website at www.deloitte.com/cn .

For further information, please contact:

Dickie Luk
Senior Manager
Tel: +852-2852-1243
Fax: +852-2541-3726
Email: dluk@deloitte.com.hk

Wilfred Lee
Assistant PR Manager
Tel: +852-2852-1679
Fax: +852-2541-3726
Email: wilflee@deloitte.com.hk

Web sites: http://www.deloitte.com/research/tmt
http://www.deloitte.com/cn

Source: Deloitte Touche Tohmatsu

CONTACT: Dickie Luk, +852-2852-1243, or fax, +852-2541-3726, or
dluk@deloitte.com.hk, or Wilfred Lee, +852-2852-1679, or fax, +852-2541-3726,
or wilflee@deloitte.com.hk, both of Deloitte

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