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2014 Outlook for the global TMT sector - Global Thematic Research

2014 Outlook for the global TMT sector - Global Thematic Research

Summary

Connected devices: The smartphone growth cycle is now levelling out. As the industry matures, cheaper Chinese models emerge and margins get squeezed, we expect to see profit warnings for the two most profitable players – Samsung and Apple. The Internet of Things will be the exciting, new product cycle that will dominates 2014. Wearable computing devices such as Samsung’s Galaxy Gear Smart Watch or Google Glass as well as connected cars and fridges are part of this technology cycle.

Consumer electronics: Smartphone operating systems will fragment. Asian players like Samsung, Baidu, Alibaba, LG and Huawei will expand their own software ecosystems, challenging Apple’s dominance.

Cyber security software: We interviewed executives in the insurance industry to find out how well multi-national company boards are handling cyber security issues. We concluded that there is huge under-investment in cyber security and that boards will be forced to address this deficiency in 2014.

Internet (e-commerce): Maps and mobile payments will be the new battlegrounds in the war for supremacy of the mobile internet in 2014. Navigational software is important because knowing where someone is going and which direction he is heading is key to selling him something. Google is the global leader in maps and Baidu the leader in China. TomTom – one of the last independent navigational software companies left standing – is a screaming takeover target. In mobile payments, Square and Alibaba are likely to float in 2014.

In this report, we will look at how individual TMT sectors will perform in 2014.

Scope

This report is part of our ecosystem of thematic investment research reports, supported by our “thematic engine”.
About our Thematic Research Ecosystem
GlobalData has developed a unique thematic methodology for valuing technology, media and telecom companies based on their relative strength in the big investment themes that are impacting their industry. Whilst most investment research is underpinned by backwards looking company valuation models, GlobalData’s thematic methodology identifies which companies are best placed to succeed in a future filled with multiple disruptive threats. To do this, GlobalData tracks the performance of the top 600 technology, media and telecom stocks against the 50 most important themes driving their earnings, generating 30,000 thematic scores. The algorithms in GlobalData’s “thematic engine” help to clearly identify the winners and losers within the TMT sector. Our 600 TMT stocks are categorised into 18 sectors. Each sector scorecard has a thematic screen, a risk screen and a valuation screen. Our thematic research ecosystem has a three-tiered reporting structure: single theme, multi-theme and sector scorecard. This report is a Single Theme report, offering in-depth research into a specific theme. It identifies winners and losers based on technology leadership, market position and other factors.

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Our thematic investment research product, supported by our thematic engine, is aimed at senior (C-Suite) executives in the corporate world as well as institutional investors.

• Corporations: Helps CEOs in all industries understand the disruptive threats to their competitive landscape
• Investors: Helps fund managers focus their time on the most interesting investment opportunities in global TMT.

Our unique differentiator, compared to all our rival thematic research houses, is that our thematic engine has a proven track record of predicting winners and losers.