Senior Consultant, IDATE DigiWorld
Within the latest edition of its half-yearly updated observatory for superfast-broadband access, IDATE – world leading FTTx intelligence provider – announces the impressive milestone of 300 million subscriptions at mid-June 2015, for world consolidated. Furthermore, superfast technologies(1) represented nearly 38% of broadband access subscriptions at mid-2015, 8 points more than one year before.
FTTH/B is still the leading superfast broadband solution, far ahead of FTTx/D3.0, followed by VDSL
• FTTH/B represented 61% of FTTx subscriptions at mid-2015. Growth of FTTH/B subscriptions will continue until 2019, but at a lower pace than during 2014, year of real success in China.
• FTTx/D3.0 represented at June 2015, 27% of FTTx subscriptions. After two years of significant growth, proportion of FTTx/D3.0 on Superfast Broadband is stable
• VDSL, for its part, lagged behind, representing 12% of subscriptions at mid-2015 compared to 13% in June 2014
The regional breakdown is very heterogeneous
• No huge changes in the geographical predominance of APAC on the FTTH/B market.
• FTTH/B is also the main deployed technology in MENA. It was the case also in LATAM, but now it is meeting stronger competition from VDSL technologies in the region (Brazilian market).
• FTTx/D3.0 is still dominant in North America and is generally growing more rapidly than other technologies.
• There is considerable space for VDSL in Europe where incumbents still wish to optimise their copper networks.
(1) For the definition of superfast platforms we consider three main architectures: FTTH/B, VDSL and FTTx/D3.0 deployed by cable operators
The growth rate of FTTH/B subscriptions should continue to increase at an annual average rate of 10% until 2019
• The growth in the total number of FTTH/B subscribers will gradually decrease from 37% in 2014 to 6% in 2019: this is linked to the progressive maturity of the markets.
• By 2019, the share of FTTH/B subscriptions will represent 32% of total broadband market worldwide (to be compared to 22% at end 2014).
• FTTH/B is now deployed in all major regions in the world, at different levels: FTTH/B represents a great opportunity for countries where broadband is not widespread (Latin America, Africa and some countries in Asia-Pacific).
The take-up rate of FTTH/B worldwide will grow gradually from 32% at end-2015 to 34% by end-2019
Whilst regional disparities will persist, the ranking of leading regions will change:
• Eastern Europe will see its take-up rate grow from 30% to 41% from end-2015 to end-2019, much higher than in Western Europe, from 26% to 40% during the same period.
• In North America, the take-up rate will rise from 41% to 46% at end 2019.
• In Asia-Pacific, the take-up rate will grow thanks to the dynamism of China and new markets such as Indonesia, Kazakhstan and Vietnam.
• In Latin America, the adoption rate will be steady as FTTH/B is at is early stage and players will focus more on expanding coverage.
IDATE publishes a half-yearly updated FTTx observatory, gathering qualitative and quantitative data of 70 countries and +150 players – see details online
Project Manager, IDATE DigiWorld
What belongs together, grows together
Converging markets provide a bright future in terms of market growth. Take Enterprise Cloud Computing, for instance: we sized the market – IaaS, PaaS and SaaS revenues altogether – at EUR 80.2bn in 2015, in 2020 we forecast that this number will more than double: EUR 192.4bn with SaaS still as strongest revenue segment, but IaaS coming close behind.
Why convergence matters
• The convergence of telecom and IT B2B markets consists in the development of services by IT players on telecom markets, and by telecom players on IT markets. It comes mainly from the development of the Internet, of Internet access for consumers and businesses, and of services over IP. Because of this, some telecom and IT services can be provided transparently by networks. Technologies such as voice-over-IP or cloud computing have thus emerged in recent years relying on broadband access, and commoditised IT systems. Our latest study has a focus –for IT markets– on cloud computing, big data, security (including management solutions known as Bring Your Own Device (BYOD) and IT consulting. For telecom markets, we focused on unified communications (including collaborative tools) and M2M (on the service stack only). These markets are those where both IT players and telecom players are providing services. However, not all these players are positioned on converging markets. Furthermore, businesses have invested heavily in IT systems and services and can be expected to continue to invest as their business issues can be answered by telecom and IT services. Among business needs, analytics and big data seems to be the most important, along with reducing costs and overheads as the first strategic business priority.
How telecom and IT services meet current business needs
* NB: Security does not fit the selected business needs in this table, but it does answer a major need for better security, in a context of important cybersecurity threats.
Source: IDATE, Telecom & IT Convergence, November 2015
• IT players are keeping a majority of market share on all converging markets: this is estimated by IDATE as between 60 and 75% on telecom converging markets, and between 90 and 99% on IT converging markets, where the IT players’ market share remain very important. In volume, the most important converging market is that of IT consulting services, reaching more than 700 billion EUR in 2015, with 95% market share held by IT players. Even if the overall convergence is leading to telcos and IT players competing on specific markets, their targets remain different. This distinction explains the asymmetry of market share between telcos and IT players on these markets. Large IT players mainly address large accounts, providing highly customised solutions and usually no ‘off-the-shelf’ or ‘turn-key’ solutions. Their solutions are especially designed to meet the needs of large accounts, each of which has a different IT systems configuration. For instance, on the cloud computing market, IT players mainly provide private-cloud services as well as hybrid cloud as it involves customised private-cloud services. Smaller IT players, and especially the pure ones, can address both large accounts and small and medium-sized enterprises (SMEs) as they can provide turn-key solutions, which is type usually chosen by SMEs.
• Telecom players (mainly telcos) have a role to play on all converging markets, but with other customer targets than IT players. Telcos have earned a strong degree of trust from their customers, both large accounts as well as SMEs. This long-term relationship allows them to provide and to sell additional services, complementary to their traditional communication services. Telcos therefore provide bundled services that include communication services (mobile and fixed), cloud storage, office suite in Software-as-a-Service (SaaS) (cloud) and a basic security suite (firewall, anti-virus and VPN). These services are especially appreciated by SMEs as they are looking for low-cost turn-key solutions. Telcos do not develop all of these bundled services, usually just reselling some of them, such as cloud SaaS products or security products. These bundled offers are, however, almost the only ones on the market: telcos thus have here a strong competitive position for this kind of business. In terms of investments, telcos mainly provide these services over their own infrastructure (without investing strongly in new capex), or resell products. In terms of revenues, these additional products do generate a measurable amount – estimated at between 5 and 10% of overall telco revenues.
Growth potential for telcos in the SaaS and IaaS markets
Source: IDATE, Telecom & IT Convergence, November 2015
Get more valuable insights about convergence enablers and business needs in our recently published market report
Published in DigiWorld Economic Journal DWEJ No. 100
Interview with Philippe AGHION
College de France, London School of Economics
Conducted by Gilbert CETTE & Yves GASSOT
C&S: Is more competition always favourable to boost innovation? Many representatives of the telecom industry are arguing that the innovation and investment in this sector is badly impacted by the intensity of competition, do you share this analysis?
Philippe AGHION: My work with Richard Blundell and co-authors shows that competition boosts innovation for firms that are close to the technological frontier (this is the escape competition effect) whereas it may discourage innovation in firms far below the technological frontier (this is the discouragement effect). Overall, the effect of competition on innovation is an inverted-U: innovation increases with competition at low levels of competition and it decreases with competition at high initial levels of competition.
Productivity has slowed down in the U.S. and in the main developed countries since the mid 2000s. How do you explain this slow-down when we consider the dramatic momentum we know in the digital economy? Are you optimistic about a new productivity surge in the near future?
Part of the slowdown in the U.S. may be due to the fact the fact that the ICT wave has partly run out of steam. But I also believe that innovation is not properly taken into account when measuring productivity growth, and this is particularly true in sectors that experience a high degree of firm turnover and where innovations are made by newcomers in the market. In the long run I am optimistic for at least two reasons. First, the ICT revolution has improved the technology for producing new ideas. Second, with the advent of globalization, the returns to innovation have greatly increased.
Are ICTs the main driver for innovation allowing for a productivity surge in the future?
I think that with the 3D printing and the clouds, the ICT sector still has glorious days ahead. But I also anticipate breakthroughs in other sectors, for example in the renewable energy and in the health/biotech sector.
Is according to you innovation a factor of inequality increase?
My recent work shows that innovation contributes to increasing the fraction of income earned by the top richest 1% or 0.1%. By this inequality is temporary as innovation rents are eroded by imitation and disappear when current innovations are eventually replaced by newer innovations (the Schumpeterian process of “creative destruction”). Moreover, my co-authors and I show that innovation does not increase overall inequality and that it enhances social mobility (again as a result of creative destruction).
Philippe AGHION is a Professor at the College de France and at the London School of Economics, and a fellow of the Econometric Society and of the American Academy of Arts and Sciences. His research focuses on the economics of growth. With Peter HOWITT, he pioneered the so-called Schumpeterian Growth paradigm which was subsequently used to analyze the design of growth policies and the role of the state in the growth process. Much of this work is summarized in their joint book Endogenous Growth Theory (MIT Press, 1998) and The Economics of Growth (MIT Press, 2009), in his book with Rachel GRIFFITH on Competition and Growth (MIT Press, 2006), and in his survey "What Do We Learn from Schumpeterian Growth Theory" (joint with U. AKCIGIT & P. HOWITT). In 2001, Philippe Aghion received the Yrjo Jahnsson Award of the best European economist under age 45, and in 2009 he received the John Von Neumann Award.
More information on DigiWorld Economic Journal No. 100 "Digital innovation vs. secular stagnation?" on our website :
CEO, IDATE DigiWorld
And what if Jean-Marie Messier was ahead of his time? This is a question that many market observers are asking themselves after the deals that took place in 2015. To wit: the largest telco in the United States taking control of the second largest pay-TV provider, while Verizon entered the mobile video market, Vivendi became Telecom Italia’s majority shareholder, the head of Altice and SFR acquired media and football rights, following in the footsteps of BT which had spent over a billion euros in February to secure the exclusive rights to Premier league matches for three years…
Disintermediation of programme access?
Beyond economists’ theoretical and already ancient arguments over the limitations of vertical integration strategies, we need to recognise a new and deeply rooted trend that appears to be going in the opposite direction of a return to convergence. In this era of increasingly ubiquitous high-speed and superfast access, increasingly effective competition between access providers, and of scrupulous attention being paid to net neutrality, even though applications and Internet users are extremely polarised between a handful of platforms, there is no telling whether telcos’ and cablecos’ assets have been strengthened in a way that will allow them to become the main providers of TV products. The trend is more towards globalisation and disintermediation.
It is only a slight exaggeration to say that, with a server and a few technical service providers, anyone can monetise their media rights internationally. Hollywood may have dominated the industry, but the major studios still needed cable networks and largely national TV channels around the world to distribute their wares. Today, they see what Netflix, Amazon and YouTube are doing, and Facebook’s ambitions in the realm of video, and are diving headlong into testing and investing in direct distribution strategies. So it is media rights that matter most and, behind that, being big enough to acquire these rights or be able to self-produce, and amortise the cost thanks to tens of millions of consumers. Telcos’ boldest and most ambitious media strategies must therefore be consistent with their size, or with expectations of their sector’s international consolidation.
Investing in programmes: will it drive telco consolidation?
If this summary argument sketches out the, in many ways new, backdrop to the relationship between container and content, it of course does not mean that all of telcos’ or cablecos’ TV initiatives are bound to fail, even for the smaller ones. They have a legitimate role to play in building an ecosystem around triple and quadruple play bundles, as a way to strengthen customer loyalty. Here, technological developments make it less costly to create a pay-TV plan that combines access to TV channels, and well-crafted indexing and marketing of OTT services. But none of this makes fixed and mobile high-speed access providers the natural choice for main providers of TV programming, and the ones that rights owners will turn to (and pay a hefty fee). The largest telcos can invest heavily in acquiring rights and even exclusive rights, with the hope that these investments will pay off. In many instances, these will be marketing investments, with the aim of increasing their share of the high-speed access market, and now accelerating the pace of customers’ upgrading to superfast (fibre, 4G/5G) plans. We should mention in passing that this belief does not cancel out the belief that mergers between telcos and (even more scattered) TV networks, and partnerships between the two, can be part of an industry-wide strategy that prevents Europe from being the mere victim of a new era of TV industry globalisation. Adhering to this analysis would lead us to conclude that perhaps Jean-Marie Messier was right… albeit too soon.
From a more general standpoint, the challenge for telecom carriers still lies in making profitable investments in the new generation networks that our economies need. From this perspective, video in particular and, beyond that, the whole range of cloud applications and services, are all very positive factors. Not only because they offer opportunities to diversify – operators can of course invest in OTT services or seek to monetise their data – but also and especially because they increase the value of having access to these networks, and open up arenas of differentiation by creating competition that is not based solely on prices.
This opinion piece was published in Les Echos on 11 January 2016
CEO, IDATE DigiWorld
What topics are likely to make headlines in 2016?
Looking at recent trends, and after having sadly dismissed topics such as – in no particular order – the onset of virtual reality, G-Fast and Docsis 3.1, 5G standardisation, IoT, AI, the introduction of E-SIM, verticals’ digital transformation… four topics in particular come to mind:
This encompasses an explosion in data traffic on all devices, fuelled by video traffic, the proliferation of video products and new pricing formats from cellular operators – in the vein of Verizon’s Go90 and T-Mobile’s Binge On – associated enhancements to LTE platforms (LTE-A/B/U), Netflix’s global strategy as it marches towards the 100 million subscriber mark by the end of 2016, the race to 4K and HDR TV, debates in Europe over harmonising copyrights, geoblocking limitations…
The increase in a wide range of dangers in digital ecosystems has given birth to a market that is expected to grow twice as fast as the IT market as a whole. By the end of the year, Europe is due to have passed a new data protection directive. Will it provide a new foundation for renegotiating the Safe Harbour agreement and making progress with the Transatlantic Trade and Investment Partnership (TTIP)? Will the ad-blocking phenomenon be made obsolete by the expected virtues of programmatic advertising?
In Europe, we will wonder just how far the consolidation trend can go as we question the hoped-for synergies, the attitude of the anti-trust authorities, the potential impact on prices, on fixed-mobile convergence, on ultrafast fixed and mobile network rollouts, etc.
Meanwhile, in the United States, we don’t yet know whether:
• A price war will break out in the mobile market?
• Cable’s dominance of the superfast access market could be threatened?
• A fixed-mobile convergence trend will take hold as it has in Europe?
These represent as much opportunity for innovation as threats to the banks which are involved in their own digital transformation, along with hopes for the creation of a large-scale mobile banking ecosystems with a strong competition between banks, Internet platforms, and telcos, plus concepts that are creating a lot of buzz such as crypto-currency, and more precisely, blockchain technology.
Here’s wishing you a very happy 2016 with IDATE DigiWorld, and we look forward to seeing you at DigiWorld Future and the DigiWorldSummit !
> Read also an opinion from Yves Gassot published in Les Echos «Media-Telecoms: convergence redux? »
Head of Media & Digital Content Business Unit, IDATE DigiWorld
Without any surprise OTT Video represents the top traffic on both fixed and mobile networks – telcos have been investing in infrastructures without payback for traffic. In our recent study we highlight the positioning of several key players from the telecom industry and stress out the pros and cons from two-sided business models
Initially, incumbent telcos launched video services for raising customer levels and ARPU gains. They were indeed keen to capture a share of the TV market. They then added features to enhance their value proposition, facing the competition of incumbent TV players and the threat of the over-the-top (OTT) world. Time shifting, multiscreen viewing, live streaming and video on demand, both transaction-based (TVOD) and subscription-based (SVOD), have been progressively adopted by telcos.
Examples of telcos broadcast broadband TV
Source: IDATE, in Telco Video Strategies, December 2015
The market at present is a two-sided one where incumbent telcos are targeting both high- and low-income households.
As a first step, this concretises new investments in premium video content, including some initial steps in UHDTV. This again is a must for incumbent telcos, in order to:
• Cross-sell: launch attractive video offerings to promote the sale of multiplay (triple- or quad-play) subscriptions
• Upsell: use video as a driver to gain higher-income subscribers and to migrate broadband subscribers to FTTH
Secondly, the will to address lower-income households and the ‘new generation’ of cord-cutters and
cord-nevers is leading incumbent telcos to deepen their segmentation of video services, with
• Skinny-TV bundles, generally providing a basic of TV channels bundled with Internet access for an entry-level subscription price
• SVOD services (including third-party, thanks to platform openness) in order to provide the ‘best of’ breed of services and more individual subscription options
Moreover, the development of programmatic advertising, based on their consumer data, is in development and could be a driver for revenues.
The search for operational flexibility and efficiency has also be permanent for incumbent telcos, in different ways:
• In order to shorten their ‘Time to video market’, operators should leverage hybrid TV broadcast-broadband solutions through DTT and satellite, to enter new markets, first with OTT-only TV delivery
• Telco CDN is must-have for telcos, to better manage OTT video traffic on their network than a revenue generator
• Cloud, centralised, solutions should develop step by step in order to easily integrate the unification of consumer interfaces, to create ‘super head-end’ for the rationalisation of OTT services and perhaps to develop future-proof solutions for their video service within, or eventually outside, their network and programmatic advertising services, to launch cloud-PVR services…
• Trade-offs can also occur around video hardware at home, including STB-less, skinny STBs or TV dongles around such issues as the ‘operator as an app’ model, including a balance between Smart TV sets and stand-alone streaming boxes.
At the end of the day, facing the competition of Internet giants, the benchmark will be the best possible user experience, to be gained through attractions such as very high-speed networks, flexible and user-friendly service platforms, innovation in services and top-quality content.
Change in IPTV’s share of TV households worldwide, 2012-2016 (million TV households)
Source: IDATE, in Telco Video Strategies, December 2015
Find out more details regarding market framework and players positioning for Telco Video Strategies in our dedicated market report
Director of Studies, IDATE DigiWorld
In developed countries, the broadband market’s evolution is being shaped by the transition to superfast broadband (SFB) and by fixed-mobile convergence. Telcos have to react – especially on the verge of continuous consolidation in the communications industry. In 2015 merger & acquisitions already shook up markets profoundly.
In both fixed and mobile access markets, the trend is one of increasing speeds, and especially the transition to superfast access (>30 Mbps) thanks to NGA network rollouts. But each is progressing at its own pace.
In the mobile sector, LTE rollouts are progressing rapidly, and subscription rates in Western countries are already high. It is safe to say that 80% of residents in Japan, South Korea, North America and the biggest European markets will be covered by LTE networks by the start of 2016, as will roughly 60% of the people in China. In addition to rapidly reaching 90+% coverage in the most advanced markets, LTE will steadily enable increasingly fast connection speeds: in excess of 30 Mbps thanks to frequency aggregation, more base stations in urban areas and the use of small cells combined with wide channels in high frequency bands. Starting in 2020, these developments will fold into 5G rollouts which are expected to deliver Gigabit-class datarates.
A comparison of fixed and mobile coverage in some of Europe’s largest markets (30 Mbps in LTE and FTTH/B), 2012-2020
Source: IDATE, LTE vs. fibre, December 2015
• Progress is slower in increasing fixed network coverage rates. It is also more complicated since it involves a mix of technologies that is specific to each national market. Schematically speaking:
- VDSL technology, which uses the legacy copper network’s local loop at least partially, makes it possible to achieve speeds of >30 Mbps, and even in excess of 50 Mbps, thanks in particular to developments such as vectoring and bonding;
- DOCSIS technologies, for cable companies that reuse the last mile of TV broadcasting networks’ coaxial cable. The vast majority of them are already selling plans with a speed of more than 100 Mbps and Gigabit-speed plans are soon to follow;
- FTTH technology which requires massive investments and a good deal of time to deploy fibre to customer premises. These systems deliver a headline speed of 100 Mbps and will be upgraded steadily to Gigabit-speed access.
• In advanced markets, fixed and mobile NGA rollouts will go hand in hand, even if preliminary observations and forecasts give superfast mobile a slight edge in terms of pace. The current situation is giving rise to fixed-mobile convergence strategies, which are clearly illustrated in Europe through the recent spate of merger and acquisition deals.
The impetus behind the convergence trend can be found in the resulting advantages:
bundles and cross-selling synergies in customer accounts, online and brick-and-mortar shops, applications and video content;
integrated approach to fixed and mobile infrastructure: sharing backboning, though Wi-Fi which is now an effective bridge between fixed and mobile and, more and more, the savings generated on backhauling with the increasing use of small cells in densely populated areas, and through sharing SDN/NFV software infrastructures. Eventually, mobile services will represent a significant percentage of fixed network revenue, while the latter will provide short-range wireless access.
• The countries where fixed-mobile convergence is the furthest along are Spain and France, where more than 40% of subscribers use the same operator for their fixed and mobile services. But there is also a general trend in Europe of markets being gradually structured around integrated fixed-mobile operators, as the result of an ongoing series of mergers and acquisitions.
• The trend is less prevalent in the United States due to the fragmentation of wireline telcos, cable companies and mobile operators which often have only regional or local footprints. But US cable companies are investing in Wi-Fi and showing an interest in mobile services (Comcast) while AT&T, by taking control of DirecTV, is integrating fixed and mobile products at the national level.
• As a small percentage of areas in advanced countries will probably still remain uncovered by operators’ FTTH/B networks in 2020, wireless access and especially LTE will likely be sold as a substitute, alongside satellite access plans and in some instances with hybrid LTE/DSL routers. This configuration is already being tested by several operators in the United States and in Europe. Added to this is the swath of customers in urban areas who have only a mobile subscription, even for their Internet access. The availability of additional spectrum resources, and notably in the 700 MHz band, often attached to obligations to cover more sparsely populated areas, should also facilitate this approach.
• In emerging economies and especially in Africa, Internet access – which today is still confined to a fraction of the population – will be delivered primarily through the expansion of 3G and the deployment of LTE networks. But the needs of businesses and city demographics will progressively generate investments in wireline fibre networks, and set off a fixed-mobile convergence trend.
Find out more on Fixed-Mobile Converges and the latest trends and figures for LTE and FTTx in our dedicated market report
Senior Consultant, IDATE DigiWorld
A Eur 30 billion worldwide market driven by automotive, consumer electronics & utilities
This IDATE DigiWorld report, published along a worldwide database, analyses the overriding trends and changes taking place in the M2M market around the globe. It explores the driving forces behind the market's growth and transformation, including an examination of major market trends, plus volume and value forecasts up to 2019 by geographical area and 25 countries.
Over the next few years, the M2M market will clearly be driven by three key verticals: automotive, consumer electronics and utilities.
• In recent years, the market has been driven by a few major verticals like Fleet management, Industrial asset management and Security. But the overall market in volume remains small, with potential for each market in tens of millions.
• In the upcoming years, there will be new major verticals (including Automotive, Connected consumer electronics and Utilities). Potential volume is definitely higher by expanding towards consumer objects (billions) rather than industrial objects only. Moreover, regulations will stimulate automotive in Europe and utilities though public policies in some regions worldwide. However, while they will theoretically drive the market, certain barriers could obstruct growth in these sectors. In the short term, some applications in these key verticals are recurrently delayed (as with the eCall regulation in Europe which is now expected to be rolled out from October 2018) and have a potential impact on the traditional M2M market. Moreover, the utilities market is seen as less attractive with business opportunity being somewhat limited for Telcos (concentrator will only be cellular connected). UK is a key exception as a cellular concentrator will be installed in almost all households (in two main regions out of the three).
• In the future, the market will be focused on emerging segments like healthcare with remote patient monitoring and smart homes.
The M2M market is still growing very fast
In 2014, the number of active M2M modules (all technologies included) reached 1.2 billion units. They will top over 4.1 billion by 2019 with a 29% CAGR.
• In 2015, the cellular market is expected to represent 290 million modules worldwide for a total market of 30 billion EUR. The annual growth of the M2M market is around 10% in value and 26% in volume, compared with 2014. Most revenues will come from software and IT services.
• Asia-Pacific will dominate Europe and North America in volume only. Europe will still lead in value, followed by Asia-Pacific. Since 2012, China has led the M2M world and has overtaken the USA in terms of cellular modules installed.
M2M players seeking business opportunities beyond their core expertise
M2M offers them attractive opportunities for Telcos, as, despite low and declining ARPU, projects offer high lifetime value, reduced churn rate and average deals representing thousands of SIM cards. Connectivity alone should represent more than 20% of total SIM cards for European telcos. Telcos are also trying to consolidate and reinforce their position on connectivity by looking at partnerships with LPWA providers, allowing them to address emerging applications.
Representing two thirds of the market, IT services are key in M2M and all players along the value chain are therefore attempting to position themselves by grabbing a piece of this lucrative market. Main players are looking at new services based on the cloud and Big Data (though analytics mainly), allowing them new business opportunities.
Finally, module providers are also challenged to break even in a market where unit prices are falling. In addition to services, they also attempt to offer connectivity services helping them provide end-to-end offering (MVNO acquisitions by Sierra and Neul purchased by Huawei).
Find out more details regarding market M2M in our dedicated market report
Emerging technologies expert, IDATE DigiWorld
3D printing market revenues will skyrocket from 3bn in 2013 to 21bn USD in 2020, representing an annual growth of 31.6%
Three-dimensional (3D) printing, included in the broader term of ‘Additive Manufacture’ (AM), refers to the various processes used in the manufacture of products which comprise the depositing or fusing of materials layer by layer. The 3D-printing process can, though, date back to the 1980s, when additive manufacturing (AM) was practised for rapid prototyping in industrial applications.
Today, 3D printing (3DP) has already been used across a wide range of verticals, spanning out from aerospace, automotive and medical industries to the consumer market. Rapid prototyping and tooling remain the most common applications, and SLS and FDM are still the dominant technologies for 3DP.
Regarding the landscape of 3D-printing ecosystems, 3D-printing systems are the largest value contributor, accounting for nearly 50% of total value and it will remain the same for the next five to ten years. 3D Systems and Stratasys, as market leaders, have a greater value chain integration and vertical coverage in an attempt to reinforce their leading position in the value chain.
Value chain positioning of manufacturers in 3D printing market
Source: IDATE in 3D Printing, December 2015
Since the process is still highly fragmented, software, marketplaces and service platforms, despite relatively lower value share, are very essential players to orchestrate the activities of designers, makers, distributors and customers across the whole value chain. Strengthened partnerships among those players has thus been observed: Autodesk and Dassault Systèmes, as software leaders, are working with, for example, Sculpteo and 3D Hubs to build a smoother 3D-printing experience.
On the market side, 3DP has been experiencing a strong uptrend since 2009 when key FDM patents expired - it took the AM industry only five years (2009-2014) to produce its second billion USD in revenue. The worldwide revenue, which comprises the printers, materials, software and associated services, is expected to grow at a CAGR of 31.6% on average between 2013 and 2020, from 3.07 billion USD in 2013 to 21 billion USD by 2020.
The industrial and enterprise markets (B2B) are the major targets for 3DP. On-demand manufacturing has become a ‘standard service’ for many established manufacturers, given its potential to disrupt the traditionally centralised production for industrial and enterprise customers. Meanwhile, IDATE sees the hybrid processes that additive manufacturing fits into existing production lines as being of high priority and having a high potential.
Consumer 3DP, where proliferating start-ups are active, is a reality today via service platforms. However, the opportunities in consumer 3DP (B2B2C, B2C) have no settled business norms yet - as more companies aggressively enter the playground; the rules of competition are constantly being re-written. Players would do well to consider their value chain coverage and business model for the next step, as well as their investment in printing capability.
Overall prices will continue to go down and standardisation and IP protection are underway, The pursuit of improved printing performance, ease of use, well-orchestrated processes and expanded global availability remain the centre of gravity for 3DP industry. However, IDATE expects that, the paradigm shift of 3D printing for mass manufacture of final parts is very unlikely to take place within the next decade – and neither is personal at-home printing – before there are breakthroughs in material availability, printing speeds and productivity levels.
Find out more on the outlook for additive manufacturing & 3D printing in our dedicated market report
IDATE Insights : Philippe BAUDOUIN, Head of digital plan practice
5th edition of the Smart City Forum. This year with a focus on territorial strategy, and a second focus on the predictive analysis for the development of Smart Cities.
- First challenge on climate change, especially with the COP21 conference organized in France.
Smart City could allow making savings in terms of gas emission, equivalent to India production.
- 5 years ago, Smart City was a hot topic for very few cities. In 2014, 50% of 100’000+ cities were involved in Smart City development. Besides, the Caisse des Dépôts launched an initiative to help smaller cities to develop Smart City initiatives as well.
- Various approaches of the smart city : the block, the vertical, the citizen, …
Round-table: From experiments to strategic visions: how cities are becoming smart cities?
- Norbert FRIANT, Responsable Service Aménagement et Usages du Numérique, Rennes Métropole
- Benjamin FAVRIAU, Chef de projet Smart City, Mairie de Paris
- Hélène ROUSSEL, Développement filière d’excellence, Montpellier Méditerranée Métropole
Flash-back regarding what have been done regarding smart cities in your city ?
Montpellier is working on smart city for 5 years, and is currently in the end of a learning phase. Legislative tools and synchronization are complex to develop such initiatives. In 2010, Montpellier has been involved in the label “Eco Cité” allowing the city to start a reflexion with IBM and local labs on Smart City. 4 fields investigated : mobility, floods prevention, risk management. Currently at the end of the trial phase.
Rennes has the moto “living smart” since 1983. The city is very involved in data use and management, thinking early of open data, big data. Worked with Dassault to develop projects around data and worked with Montpellier to co-create data-based services.
Paris started an initiative for Smart and Sustainable City since last elections. The idea was to provide tools to the city to achieve its main goal regarding mobility, wastes, … The city is therefore currently developing new tools around data, and try to federate an ecosystem around data.
The position of the local administration regarding the development of Smart City
In Rennes, the role of the city and the “Metropole” is to be a data “régie”. The aim is to gather data, and manage initiatives around data, stimulate an ecosystem, and provide a “citizen fabric”. One of the issues for a data-based application is to create an audience.
In Paris, the city managed to release data for now. The idea is to open a reflexion on data to all partners that could be interested in the use of data. The city try to develop a territorial sense to federate players around data.
In Montpellier, the city was involved on open data. The “metropole” was involved on its side on data already used. Montpellier is therefore between both initiatives.
There is beside a challenge on the Internet of Things and connected objects, and how to use and federate data generated by these objects placed on the city. Telcos are involved, software editors as well. In Rennes, they work with the development of open technical bricks. The role of the city is to stimulate the local ecosystem around smart city. Rennes worked with research labs around Lora and the Lora alliance.
It can be the charge of cities to define a de-facto standard, at the national level.
About the link between Smart City and the French tech ecosystem
In Montpellier, the dynamic have been lunched concretely in 2015, especially with the Big Data Challenge. The Smart City is an enabler of the French Tech initiative and ecosystem, and the development of start-up community.
Paris worked with Numa (start-up incubator), to develop applications around Big Data.
Rennes also worked on data-based applications, around geo-tourism, developing new services, tested by local citizens.
There is also a culture of “free of charge” services that is killing start-ups, living more or less on public subventions rather than on a sustainable business model. The other players that are correctly living on smart city are large players including SNCF, Google, Cisco, IBM. Some of them do not release their data and are blocking the development of big data, especially start-ups.
Rennes and Montpellier answered to a call for projects in 2014 and have been chosen : they have launched jointly 10 challenges on Big Data. 4 companies from Rennes and 4 from Montpellier are involved in these Challenges.
Keynote : Gabrielle GAUTHEY, Head of Investments, Caisse des Dépôts
The smart city can take profit from the legacy city. The smart city is involved in the territorial transition, in the climate transition, the digital transition and the demographic transition.
How can we see the intelligence of a city (for the Caisse des Dépôts) :
- More fluid
- More sustainable
- More sober
- More resilient
- More inclusive (social integration)
Some original example of mobility / smart city solutions provided in France :
- Nantes developed a “pay-as-you-use” model for transport, bus, tram and train.
- Lille developed the concept of shifting time mobility: you are paid to shift your working time to take the bus out of the peak hour.
Infrastructure is key for the development of Smart Cities, especially to gather and store the data.
There are also needs for fixed mutualized telecom networks that are neutral and provided by the city. “It is necessary to have an open infrastructure to avoid silos and to release innovation”.
Governance is necessary to manage initiatives (by the city especially), and the citizens have to be involved in the development of these initiatives and applications.
Roundtable - Are predictive technologies the next stage in the smart city’s development?
Moderated by : Albert ASSERAF, Directeur général stratégie, Etudes et Marketing France, J.C. Decaux
- Jean COLDEFY, Directeur, Service Mobilité Urbaine du Grand Lyon, Optimod Lyon
- Philippe SAJHAU, Vice President Smarter Cities France, IBM
- François STEPHAN, Directeur de Programme « Systèmes de Systèmes », SystemX
- Michel LIGNON, EMEA Telecom Sales Director, Ruckus Wireless
Presentation of round table members’ involvement in predictive analysis for Smart City:
SystemX: Research labs placed in the Paris-Saclay innovation cluster. Work especially on smart territories, and especially on predictive data analysis. To work on transportation systems, it is necessary to modelling transport networks in order to understand the how it works. It leads to understand how people flows are moving, by investigating at stations, analyzing location-based data from mobile operators, or location-based tweets.
IBM – Smarter Cities: Analytics is only one step among others on the “smart” aspect of the city. In 2020, there will be 1.7 Mbyte generated each second for each person around the world. It is therefore necessary to use these data to generate value, in order to improve living conditions in the city. IBM worked with the Chinese government to anticipate pollution levels 72 hours upstream. The territory have to stay at the center of the smart city initiative, and at the core of the governance.
Optimod – Lyon: technology is a mean and not a way to make investment. The main goal remains related to the city: mobility, environment, … Optimod deals with transportation in Lyon. The idea is to answer issues regarding environment: reducing gas emission, reducing transport costs (including cars and public transport). The first option is to change behaviors regarding cars, the other option is to change infrastructures. Digital can help changing things waiting for disruptive options in terms of transportation. Optimod works on predictive analysis especially for traffic lights optimization. Companies like Uber do not generate value, rather destroy value at the scale of the city. It is important to keep the value within the city and to preserve the economic ecosystem.
Ruckus Wireless: Californian company working on smart city communication infrastructures. Some developing countries are more advanced than developed countries in terms of Smart City initiative. In the US, Ruckus worked in San Francisco, Los Angeles and San Jose: developed services with real-time parking places available. Also analyzed data from SingTel in Singapore to know how long people are waiting for trains, by analyzing wifi connections density on the platform. In NYC, provide Wifi interactive hot-spots, to replace the existing phone booths, providing especially free calls over-wifi on these hot spots.