Apple’s hardware progress at this year’s Special Event was more impressive than the software announcements at WWDC in June, though not at the level seen during the bumper launch of the iPhone 6
Improvements in camera technology and custom chips are preparing the iPhone for more drastic design changes and new location-based service categories in the future
Next year, faster development of both software and hardware is required to defend iPhone margins or user base growth, let alone both
The UK retail market for digital movies has shown steady growth, but has not offset the decline in physical sales. While iTunes remains the UK market leader, Sky is clearly driving the growth with its Buy & Keep offering, backed up with the reassurance of physical product.
However, a move away from the collector mentality alongside the growth of a subscription mentality will affect long term prospects. This is not helped by the consumer proposition for digital retail, which remains disjointed, lacks inter-device operability and a clear consumer benefit.
Without co-ordinated efforts and investment from the studios, content owners and retailers to resolve these issues, we believe the opportunity for digital video retail in the UK is limited. Even with that, the EST market may never be as profitable as the DVD home video market.
The Bank’s monetary stimulus will help restore confidence and smooth the economy’s post-referendum transition
If the Bank is right, the economy will avoid a recession and bounce back in Q2 2017
An advertising recession in 2017 still looks likely until the consumer gets his wind back and a growth path emerges
FY 2016 has been an excellent year, with all three Sky markets showing improved performance as Sky delivered 7% revenue growth (5% after adjusting for 2016 being a 53-week year) and 12% increase in operating profit
The success reflects Sky’s commitment to product and service innovation and diversification in an increasingly fragmented marketplace combined with tight control of back office costs and focus on synergies
As a measure of its success, Sky has set new cost synergy targets of £400 million annual run-rate by FY 2020 and is aiming for continuing middle to high single digit growth in revenues, which should let it comfortably absorb the rising costs of Premier League and Bundesliga live televised rights under the next contracts
Google’s recent product updates and developer conference announcements aim for as many users on as many platforms and devices as possible – a return to strategic form
The company has a dual approach: using Android as a mobile trend-setter while also devising new ways for users and developers on other platforms to use Google services
The reach provided by these initiatives will help Google’s machine learning algorithms to better understand and predict user intent – the cornerstone of the company’s ad business
Adverse market trends are finally touching the iPhone, the mainstay of Apple’s business, which looks healthy in the short term but is facing substantial threats further out
In response, Apple has changed its iPhone pricing, is warming up to developers and seeks to address long-standing problems with its first-party service offerings
While some of the holes in Apple’s service suite are now being patched, the company is still playing catch-up to rivals Google and Amazon in areas like smart assistants, maps and the connected home
UK digital advertising will grow beyond £10 billion by 2018 by our estimates, representing more than half of all advertising spend and delivering the most advanced large advertising market in the world on a per capita basis.
Nevertheless, we see critical issues in digital marketing that are frequently acknowledged, but hard to fix.
At the heart of our hypothesis is the view that the marketing industry – brands, agencies and media – has focused on technology and efficiencies at the expense of consumer experience and distinctiveness.
The award of the match packages in the 2017-21 domestic football rights auction in Germany is probably optimal for Sky (within the “no single buyer” constraint): it will broadcast about eight out of nine weekly fixtures including the top picks, while Eurosport’s package is complementary to Sky’s rather than substitutional
Sky will, however, pay a hefty price, with the new contract costing 80% more than the current one – although the new Bundesliga rights value is not out of line with other Continental leagues
We expect Sky’s German operations to briefly break even in fiscal 2017 before falling back into losses with a return to profit if other costs are kept under control. Management has made a bold statement of self-confidence: building scale is the priority
The decline in print display advertising in national newspapers accelerated to -16% in 2015, while growth in digital advertising is slowing, and will be unable to offset revenue decline for the foreseeable future.
We believe this decline is structural and irreversible, continuing at a sharper pace than before despite the recovery in the UK economy in 2013-2015, and very different from the cyclical decline of 2009.
Publishers must convince brands and agencies that in the mobile era their superior content environments have added value. If scale newsrooms are to survive, costs must be reduced through collaboration and outsourcing.