The latest figures from the Cisco Visual Networking Index are out, and make the usual exaggerated claims about video taking over the world and rapid data usage, that makes you glad that there are Cisco devices out there to handle the routing of all of that data.
Instead of doing a full analysis this quarter, we thought we’d just pull out the occasional highlight and the first is that IP video will account for 73% of all internet traffic come 2017. That’s a sobering thought.
That fact alone puts in stark contrast how the internet was built for one thing and yet will be used for another, and how much effort access network owners will have to go to, in order to ramp connectivity over the coming years and make this possible.
There will be 3.6 billion internet users by then, 12 times the amount of traffic that was generated in 2008, when it was a mere 121 Exabytes, and Asia Pacific will have over half of these users.
There will be some 19 billion network connections which shows that we will all have multiple devices, about 5, whether that’s because we have second devices or have devices talking to one another.
Nearly half of all IP traffic will originate with non-PC devices up from 26% now. PC-originated traffic will grow at a CAGR of 14%, while TVs, tablets, mobile phones, and machine-to-machine (M2M) modules will have traffic growth rates of 24%, 104%, 79%, and 82%, respectively.
Cisco seems to think that tablets shipments will be around 190 million, and we’re fairly sure that’s too low. Cisco says that 74% of tablets will be IPv6 capable, and suggests total installed tablet devices will be around 700 million by 2017. IDC put out a forecast yesterday that said that tablet shipments will grow 58.7% year over year in 2013 reaching 229.3 million units, up from 144.5 million units last year. That puts you close to 700 million units by end of 2014, and that’s without price drops. IDC expects tablet shipments to outpace the entire PC market – portables and desktops combined – by 2015. So if we add a couple of more years of growth we see that this Cisco figure is dwarfed. We’re on the side of high tablet forecasts and it shows you how tough it is using Cisco’s approach ‘ that of taking 8 or 9 other research company’s forecasts and merging them into a single report that shows video usage.
Forrester published a report last month that said that the installed base of tablets would reach 760 million a year earlier in 2016 and that shipments will grow to 375 million, which gets you over 700 million in just two years at by its calculations to 1.1 billion by 2017. This was from a base of 56 million tablets purchased worldwide in 2011, and represents an annual compound growth rate of 46%.
Since at Faultline we happen to believe that tablets will BECOME the future growth of TV, eating perhaps 100 million of large flat TV screen sales annually by then, we have to go with that Forrester estimate, if not more. If you watch a TV 5 hours a day and say just 200 million of those tablets are used for watching TV all the time, then you have 5 hours a day of 3 Mbps to 6 Mbps for 30 days a month to add to the video that Cisco thinks is going to happen. Now we know that Cisco is anti-tablet, having bought NDS, it sees millions of very large smart TV screens, growing at 230 million a year, being the target for this video, but we don’t agree, so perhaps Cisco is overdoing the video since more tablets will mean less dense, lower bandwidth video streams , but then again it could mean 4 or 5 of them per household AND a 4K TV.
It also says that Content delivery networks (CDNs) will carry more than half of Internet traffic in 2017, up from 34% in 2012. By 2017, 56% of Internet traffic will travel over Wi-Fi. Well that suggests that WiFi had better do a much better job of not dropping video packets than it has up to now and points to a fascinating future for video capable WiFi companies such as Quantenna and Celeno and the introduction of both MIMO and mesh networking.
But at the same time Cisco predicts that by 2017 there will be 10 million hotspots. Well for the traditional implementation of a hotspot this might be a reasonable number, but since there are that many Homespots already in France and given that China Telecom has already installed 3.8 million on its own, this is a stupidly low number. Surely saying how many home gateways would be in operation would be for more helpful, since they are all likely to end up being Homespots, with less reach than a Hotspot, but scaling to a couple of hundred million and having the effect of multiple tens of millions of hotspots.
As for the prediction that global WiFi speeds are set to treble by 2017, that’s explained purely by the installation of 802.11ac devices replacing aging a,b,g and n devices and hardly took any prediction.
The conclusion that by 2017 Cisco thinks that 55% of Internet video will go across WiFi just means that over the past few months, as Faultline has been obsessed with this trend, we’ve been barking up the right tree.