New tides

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Last week’s internet breakdown was a strange reminder of just how far away the tip of Africa is. A few malfunctions in two separate cables, Seacom and Wacs, and South Africa was thrust into the internet dark ages, circa 2004.

Most of us are active on some form of social media, use WhatsApp and other messaging apps and check our email, which alone is like digital heroin without the concomitant FOMO [fear of missing out]that social media instils in so many.

Such outages – and the the few hours Twitter was down the week before – are reminders of just how much the internet is now a part of our lives. This is the live-by–the-cloud, die-by-the-cloud world we live in where sudden connectivity crashes literally cut us off from our online worlds.

The scope of the online economy is often unseen. Online gaming, or eSports, for instance is expected to “generate global revenues of US$500m in 2016, up 25% from about $400m in 2015, and will likely have an audience of regular and occasional viewers of close to 150m people” according to predictions by Deloitte Global. This still pales in comparison with what real sports like European soccer, US football, basketball, baseball, or ice hockey earn – ranging from $4bn to $30bn, as Deloitte notes.

Meanwhile, mobile games (played on either a smartphone or tablet) “will likely become the leading games platform by software revenue, expected to generate $35bn in revenue up 20% from 2015”. PC gaming is expected have revenue of $32bn, while consoles will be $28bn. These are modest 5% and 6% increases respectively, according to the fascinating figures in the Technology, Media & Telecommunications (TMT) Predictions report.

This year, for instance, will be the first time that virtual reality (VR) will “have its first billion dollar year”. Headsets – like the Occulus Rift bought by Facebook, which recently announced it would cost $600 – and other hardware will sell $700m and the rest in content. That’s about 2.5m VR headsets and 10m games. Gaming’s overall revenue has been bigger than Hollywood for a few years now. Isn’t it time for a gaming Oscars?

But it is likely that this futuristic technology will remain too futuristic (and expensive) for many, unless you’ve experimented with Google Cardboard. This is an easy and cheap way to make a simple cardboard casing for high-end smartphones. This set up uses the high-resolution mobile screen to great effect, and is great for kids.

The most interesting figure from the 15th instalment of these TMT predictions is that the value of used smartphone traded is $17bn. As Deloitte TMT Director Sharoda Rapeti calls it “the $17bn market you may never have heard of”. An estimated 120m used smartphones will trade hands, up from the 80m second-hand phones resold in 2015 and worth $11bn. Some “10%percent of premium smartphones ($500 or higher) purchased new in 2016 will likely end up having three or more owners before being retired,” Rapeti adds.

Meanwhile, the thing we all seem to do the most of – sharing or storing photos – will grow to 2.5 trillion photos this year, a 15% increase over the year before,

Adding fuel to cellphone networks fears about declining voice revenue, Deloitte predicts the “rise of the ‘data exclusive’. About 26% of smartphone users in developed markets are expected to not make any traditional phone calls in a given week in 2016”.

Its common cause that voice calls have been replaced with WhatsApping, Facebooking, tweeting, Skyping and WeChatting; while the voice calling through these over-the-top (OTT) players has scared the networks so much they have scare-mongered Parliament into thinking this is a real problem. Driving from Fourways to Craighall in Johannesburg last week I had two long WhatsApp call with a friend living on a Greek island and another in Sydney. In both instances, over cellular networks. And free. The call quality was as clear as a traditionally switched voice call, or FaceTime and Skype which I’ve been using for years. You really couldn’t tell the difference.

Isn’t progress great.

This column first appeared on Financial Mail

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About Author

Toby Shapshak is editor-in-chief and publisher of Stuff, a Forbes contributor and a Financial Mail columnist. He has been writing about technology and the internet for 20 years and his TED Global talk on innovation in Africa has over 1,5-million views. He has written about Africa's tech and start-up ecosystem for Forbes, CNN and The Guardian in London. He was named in GQ's top 30 men in media and the Mail & Guardian newspaper's influential young South Africans. He has been featured in the New York Times. GQ said he "has become the most high-profile technology journalist in the country" while the M&G wrote: "Toby Shapshak is all things tech... he reigns supreme as the major talking head for everything and anything tech."

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