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DELOITTE PREDICTS 2022 CHIP SHORTAGE, AI REGULATION, ENTERTAINMENT CHURN, AND
SUSTAINABLE PUSH

Dean Takahashi@deantak
November 30, 2021 9:27 PM
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Deloitte has its 2022 tech predictions ready.
Image Credit: Deloitte

Join gaming leaders, alongside GamesBeat and Facebook Gaming, for their 2nd
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upcoming January 25-27, 2022. Learn more about the event. 

--------------------------------------------------------------------------------



The new year will see a continued chip shortage, an increase in regulation for
AI, a push for sustainability in smartphones, and more churn in entertainment
subscriptions, according to the annual tech predictions from accounting and
consulting firm Deloitte.

Deloitte Global said in its annual report that chips will remain in short supply
next year, and some component lead times will stretch into 2023. That’s
consistent with reports from chipmakers such as Intel and Nvidia.

1
/
9
“From Data to Knowledge”. How the Organization of Data Using LC:NC Can
Drastically Reduce the Technical Complexity of Deriving Knowledge From Data._
Read More




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TOP ARTICLES







“From Data to Knowledge”. How the Organization of Data Using LC:NC Can
Drastically Reduce the Technical Complexity of Deriving Knowledge From Data._


The company also expects increasing discussion around regulating artificial
intelligence (AI) more systematically, with several proposals being made.

Deloitte also said that 320 million consumer health and wearable wellness
devices will ship worldwide in 2022.

And more Wi-Fi 6 devices will ship in 2022 than 5G devices, to the tune of at
least 2.5 billion Wi-Fi 6 devices versus roughly 1.5 billion 5G devices.

And at least 150 million streaming video-on-demand services (SVOD) paid
subscriptions will be canceled worldwide. As games consoles reach their 50th
anniversary, the console market will generate a record $81 billion in 2022, up
10% from 2021.

The Technology, Media & Telecommunications (TMT) 2022 Predictions report
underscores how many of these trends are being driven by the global pandemic’s
economic and societal shifts, resulting in an increasingly connected and
multi-device world, fueling the world’s need for more chips, growth in
connectivity, and entertainment options.

“The pandemic increased the need to maintain connections, improve productivity
and experience entertainment, with accelerated adoption from both consumers and
businesses alike,” said Kevin Westcott, Deloitte’s U.S. TMT and global
Telecommunications, Media and Entertainment (TME) practice leader, in a
statement. “In 2022, we foresee these behaviors continuing to grow, but amid a
backdrop of challenges. Supply chain woes, increasing regulatory issues, and
changing media habits will be at the forefront of business leaders’ minds as
these challenges impact their ability to meet market demands.”


SURGE IN CHIP DEMAND BUT SUPPLY CRUNCH CONTINUES

Deloitte predicts that many types of chips will still be in short supply during
2022, but it will be less severe than it was for most of 2021, and it will not
affect all chips. The continuation of the chip shortage and its staying power
boils down to a significant surge in demand, driven by digital transformation
and accelerated by the pandemic, Deloitte said.

Unsurprisingly, venture capital investment in semiconductors is taking off to
fill that demand for new kinds of chips. Deloitte predicts that venture capital
(VC) firms globally will invest more than $6 billion in semiconductor startup
companies in 2022. That may only be 2% of the more than $300 billion overall VC
investments expected for 2022, but it’s more than three times larger than it was
every year between 2000 and 2016.


WI-FI 6 OUTSELLING 5G DEVICES

Many countries have adopted 5G over the past two years, but Wi-Fi 6 devices are
now quietly outselling 5G devices by a large margin and will likely continue to
do so for the next few years.

Deloitte predicts that more Wi-Fi 6 devices will ship in 2022 than 5G devices,
to the tune of at least 2.5 billion Wi-Fi 6 devices versus roughly 1.5 billion
5G devices. The reason: Wi-Fi 6, just as much as 5G, has a significant role to
play in the future of wireless connectivity—not just for consumers, but also for
the enterprise.

Meanwhile, Smartphones will hit an installed base of 4.5 billion units in 2022,
making it by far the world’s most popular consumer electronics device. But those
phones will generate 146 million tons of carbon dioxide or equivalent emissions
(CO2e) in 2022.

While this is less than half a percent of the 34 gigatons of total CO2e emitted
globally in 2021, it is still worth trying to reduce. There is clear evidence
the industry is making smartphones more sustainable, by reducing the need for
unplanned replacement, offering software support for smartphones for longer and
lengthier phone lifetimes, ultimately helping to reduce the environmental impact
of smartphones.


AI AND MANAGING SENSITIVE DATA

Deloitte predicts that 2022 will see a great deal of discussion around
regulating AI more systematically, with several proposals being made—although
enacting them into fully enforced regulations will not likely happen until 2023
or beyond.

Some jurisdictions may even try to ban whole subfields of AI — such as facial
recognition in public spaces, social scoring, and subliminal techniques —
entirely. In addition, driven by the increasing urgency of safeguarding data
used in AI applications, emerging privacy-enhancing technologies such as
homomorphic encryption (HE) and federated learning (FL) will also experience
dramatic growth.

Already in use by leading technology companies today, the combined market for HE
and FL will grow at double-digit rates in 2022 to more than US$250 million, and
by 2025, this market is expected to top $500 million.

“AI has tremendous promise, but we’re likely to see more scrutiny in 2022 as
regulators look to better
understand the privacy and data security implications of emerging AI
applications, and implement strategies to protect consumers,” said Paul
Silverglate, Deloitte’s U.S. technology sector leader, in a statement. “Tech
companies find themselves at a convergence point where they can no longer leave
ethical issues like this to fate. What’s needed is a holistic approach to
address ethical responsibility; companies that take this approach, especially in
newer areas like AI, can expect greater acceptance, more trust, and increased
revenue.”


AS THE WORLD CHURNS: THE STREAMING WARS GO GLOBAL

As leading streaming providers expand globally, while national media companies
spin up their own domestic streaming services, the amplified competition, is
creating abundant consumer choice — and accelerating churn.

In 2022, Deloitte predicts that at least 150 million streaming video-on-demand
services (SVOD) paid subscriptions will be canceled worldwide, with churn rates
of up to 30% per market.

That’s the bad news. The better news is that, overall, more subscriptions will
be added than canceled, the average number of subscriptions per person will
rise, and, in markets with the highest churn, many of those canceling may
resubscribe to a service that they had previously left. These are all signs of a
competitive and maturing SVOD market. As SVOD matures, growth across global
regions that may have different cost sensitivities will likely require different
business model innovation and pathways to profitability.

“One thing we’ve learned during the past year is that consumers want
entertainment choices, in content, in cost and in their ability to connect
socially through their experiences,” said Jana Arbanas, Deloitte’s U.S. Telecom,
Media and Entertainment (TM&E) sector leader, in a statement. “As more global
players enter these already competitive markets around the world, entertainment
companies will be challenged to constantly innovate, be nimble in their actions
and respond quickly to market changes in order to capture the minds and wallets
of increasingly savvy consumers.”

On another subject, Deloitte predicted continued focus on diversity, equity, and
inclusion: Although the largest players in the technology industry are closing
the gender gap and will reach 33% overall female representation in the workforce
in 2022, women in technical roles continue to lag by 8% and the pandemic has
caused increased churn with 57% of women in TMT expecting to change employers
within two years and a startling 22% considering leaving the workforce citing
workload increases impacting
wellbeing.

And sports nonfungible tokens (NFTs) have kicked sports memorabilia into the
digital age. Deloitte predicts that blockchain-based NFTs for sports media will
generate more than $2 billion in transactions in 2022, about double the figure
for 2021.

By the end of 2022, we expect that 4 to 5 million sports fans globally will have
purchased or been gifted an NFT sports collectible. Interest in sports NFTs is
likely to be spurred by activity in the wider NFT market, including digital art,
the top five most valuable sales of which had generated over $100 million by
August 2021.


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